Social charges on pension

[sweeper]

I have just received our 2008 Social charges advice. It is our first and I am confused. I understood that these charges would only be based on unearned income and that pensions would be exempt. I hold an E121 and moh is treated as dependant. They have charged 0.5% on moh's occupational pension, is this correct or did I make an error on the form?

[NormanH]

Is it taxed at source in the UK?

[sweeper]

At the moment it is being taxed at source but we declared it gross as we have completed the double taxation form and will be reclaiming the UK tax. I would have thought that it would be treated the same as the old age pension and ignored for social charges. I did enclose a copy of the E121 with the return.

[NormanH]

It sounds as if you have been charged the CRDS, which is at 0,5 %

French pensioners pay this on their pensions.

Other people will know more about whether you have been wrongly charged.

[parsnips]

Hi,

    It seems from what the OP says that this is being wrongly taxed. If he has a UK state pension (he says he has an E121), then all his pensions are exempt from french social charges . If he lets me have his email address (by PM) I can send him a model letter to reclaim.

[cooperlola]

Next time, if you followed the advice on the tax return FAQ:

"Finally, if your French healthcare cover is courtesy of an E-form, then you are exempt from social charges (contributions sociales) on your UK company and old age pensions.  So, on the 2047 section VIII  REVENUS DE SOURCE ÉTRANGÈRE SOUMIS EN FRANCE À L’IMPÔT SUR LE REVENU ET IMPOSABLES À LA CONTRIBUTION POUR LE REMBOURSEMENT DE LA DETTE SOCIALE (C.R.D.S.) - just write in 'Titulaire de formulaire E121 (or whichever E-form you have), donc je ne suis pas a la charge de l'assurance maladie' and leave the amount box blank. "

this shouldn't happen again (with any luck!.[:)])

[sweeper]

I have checked my tax return and I did enter the amounts in the correct boxes. The only thing I didn't do was write the declaration concerning the holding of E121 but, I did enclose acopy of it. The penny has now dropped and having rummaged through my files find that the two E forms are slightly differnt and I may have copied the wrong one. Parsnips has now, very kindly, supplied me with a sample letter and I shall be sending it off to them.

[sweeper]

A result to report! I was unable to get the letter off to the Tax people very promptly as I had to go to UK. Just got back and taking my courage in both hands and brushing up my best joined-up French, visited the Hotel des Impots in Melle. Showed the lady the E121 with moh detailed as dependant and she promptly printed out a correction form to take to the Treasury when I make the payment. Many thanks to all, for all the help and I hope that others will be able to benefit by my experience.

[Nell]

'Titulaire de formulaire E121 (or whichever E-form you have), donc je ne suis pas a la charge de l'assurance maladie' and leave the amount box blank

I write  this on our tax form, OH has E121 and I am his dependant, but we still pay social charges on my pension (I am still under 60). should I not be paying this tax on my pension?? Now that would be nice....

[cooperlola]

Nell, the point is that as a dependent of an E121 holder, it's the UK which pays for your healthcare thus, yes, you should also be exempt, imo and should use the same wording.

[sweeper]

Nell. It certainly sounds like you are in the same situation as my husband and should not pay CRDS on your pension. I would take it up with them and 'bonne chance'.

[Dave&Olive]

The recent issue of the assessments to French Social Charges for 2008 income seems to be causing enormous grief to many who are failing to have the local tax office allow them relief from these charges on their pension incomes.

Firstly, though, let us remind ourselves of the rule : relief from social charges is only applicable to pension income, and, furthermore, it is only available if at least you, your spouse or pacsed partner are in receipt of the State Old Age pension.

Why ?

Because the receipt of the UK State Old Age pension in the UK exempts the UK taxpayer from paying UK National Insurance during retirement and, therefore, effectively, gives the UK taxpayer the right to free health cover.

Under EU rules, this UK free right to healthcare in the original home country is extended to those moving abroad within the EU. Accordingly, those receiving a UK State Old Age pension can request the exemption form - the E121 - to ensure that they suffer no cost for belonging to the French health system as, in effect, the cost of belonging to the French system is paid for by the British under Franco-British reciprocal arrangements.

However, while the E121 is only a right of exemption from paying to belong to the French state health system, it is not a right of membership.

Also, while belonging to the French health system is an immigration requirement, belonging to the French health system does not imply that one has to necessarily pay for it personally.
Indeed, the E106 form also gives free access to the French health system, but this certificate does not provide any exemption from the social charges.

So, on the basis that you have inserted your pension income - including the State Old Age pension - in section VIII of the pink 2047 tax form, and then transferred this total to the blue 2042 form, section 8 on page 4, box TL, your pension income should not be assessed to any of the social charges - including the CRDS.

But, some zealous tax offices are still assessing people to the CRDS. Is this correct? Not necessarily.

The confusion arises because of the section heading on the pink 2047 form itself on the one hand, and the law and the actual contents of the notes referring to this section on the other – since they differ. But the critical issue is - are you receiving free benefits from the social security system?

• If the answer is yes, for example, through some form of aid, then yes, the CRDS is due on
your pension income.

• However, if you receive no aid from the French social security system (which you don’t if the healthcare membership costs are paid for by the UK through your E121 entitlement), then no, you are notliable to the CRDS on your pension income.

Apart from the law itself, the proof of non-liability is mentioned in the Fisc’s own Notice pack to the 2047 form itself, and specifically in Note 17 on page 8.

While it is difficult to translate the phrase succinctly and retaining all the nuances, this note states, quite clearly, at the end of the first paragraph, that the CRDS is levied on those who are a liability to the French social security system - but a liability in the sense of receiving “something for nothing”.

Clearly, if you have an E121 to fund the cost of state healthcare membership, this is not the case: therefore, there is no liability to the CRDS if you have the E121 (and thus the State Old Age pension) and are not benefitting in another manner from the French Social Security system.

So what do you do if the tax office does nevertheless charge you to the CRDS ?
The best thing to do is to write to the tax office, confirming that you are in receipt of the UK Old Age State Pension, and are entitled to free access to the French healthcare system through benefitting from the E121 certificate.

The first time you do this, it is also wise to enclose a copy of the State Old Age pension entitlement letter (the one that is issued early each year confirming how much state pension you will receive) for the tax year being assessed, and also a copy of the E121 Certificate itself.

While you should compose your own letter, the following text, in French, is part of what you might wish to include in such a letter with regards to explaining the situation to the tax office, and obtaining a revised assessment:

Nous vous écrivons concernant l’avis d’imposition aux contributions sociales, et plus spécifiquement le CRDS sur les revenus de pensions en provenance de l’étranger pour l’année 2008.
Nos revenus de pensions de retraite de source étrangère sont exonérés de toutes les charges sociales car nous ne sommes aucunement dépendants de la sécurité sociale française, étant en possession du certificat européen E121. Notre cotisation à l’assurance maladie est payée sous un régime forfaitaire par le gouvernement britannique. Ceci est du au fait que nous avons des pensions de retraite d’état (preuve ci-jointe).
J’attire ainsi votre attention sur votre note n° 17 de la Notice associée au formulaire 2047. Vous trouverez ci-joint une copie du certificat européen E121 qui exonère le contribuable de payer les frais de l’assurance maladie en France, puisque comme mentionné ci-dessus, ceux-ci sont payés par dérogation européenne.
Ainsi, et comme il est précisé dans votre note n° 17, nous ne sommes pas “à la charge, à quelque titre que ce soit, d’un régime obligatoire de sécurité sociale français”.
Etant donné la clarté de cet article, nous vous saurions gré de bien vouloir revoir votre avis d’imposition aux contributions sociales, et vous en remercie par avance.

From experience this has always resulted in the situation being corrected satisfactorily without further ado, but, if not, then your best recourse would be to seek professional advice. In subsequent years, it is worthwhile providing a little reminder to the tax office when submitting your tax declaration, by inserting after the relevant section heading on both the blue 2042 and the pink 2047 of pension income – “Pas de CRDS - E121 ”. If however, you are assessed to this social charge on your pension income, then you should write along the lines as outlined above.

[parsnips]

Hi,

       In their comprehensive posting (which is giving me a sense of deja -vu) Dave & Olive unfortunately repeat the confusing advice given by the "Annett Consultancy" and repeated by the tax correspondent of the "Connexion", that state pension holders (with E121) should enter their pensions at VII of 2047 and TL of 2042 ---WHY????  these sections are for income that is SUBJECT to CRDS, and we are being told to enter income that is specifically EXEMPT from CRDS. For a foyer having at least one UK state pension, ALL pensions should be entered ONLY on page 1 of 2047 and ONLY on page 3 of 2042 in the appropriate "pension" line and boxes AS and BS. If declaring for the first time put a note alongside the entry "frais de santé couvert par E121" and enclose a copy.   They also , as does the "Connexion" and (more understandably perhaps)the "Annett Consultancy", advise those who are nevertheless taxed in error to"seek professional advice"--totally ignoring the excellent "Moderateur Fiscal" system for redress against tax errors. I myself have several times obtained full refunds for friends using this FREE system.  As the amount usually over paid is not much more than 100€ the cost of "professional advice" is likely to exceed the amount recovered.

  

[Dave&Olive]

[quote user="parsnips"]

Hi,
       In their comprehensive posting (which is giving me a sense of deja -vu) Dave & Olive unfortunately repeat the confusing advice given by the "Annett Consultancy" and repeated by the tax correspondent of the "Connexion", that state pension holders (with E121) should enter their pensions at VII of 2047 and TL of 2042 ---WHY????  these sections are for income that is SUBJECT to CRDS, and we are being told to enter income that is specifically EXEMPT from CRDS. For a foyer having at least one UK state pension, ALL pensions should be entered ONLY on page 1 of 2047 and ONLY on page 3 of 2042 in the appropriate "pension" line and boxes AS and BS. If declaring for the first time put a note alongside the entry "frais de santé couvert par E121" and enclose a copy.   They also , as does the "Connexion" and (more understandably perhaps)the "Annett Consultancy", advise those who are nevertheless taxed in error to"seek professional advice"--totally ignoring the excellent "Moderateur Fiscal" system for redress against tax errors. I myself have several times obtained full refunds for friends using this FREE system.  As the amount usually over paid is not much more than 100€ the cost of "professional advice" is likely to exceed the amount recovered.
  
[/quote]

              I just copied and pasted this from Connexion web site  !!! they wrong again then ??

                          Dave

[Sunday Driver]

Phew, Dave.....for one awful moment I though it was all your own work...[:-))]

Yes, it's all wrong again.

 

[Belle]

Sorry if I am getting abit muddled with all this talk of to pay or not to pay social charges, could some-one please just pat me on the head and say, yes you are fine, or not. I recieve my state pension (being over 60) my OH doesn't yet as he isn't 65, we don't pay tax, or tax habitation, but we do pay social charges, is this right. Thanks alot.

[parsnips]

[quote user="Belle"]Sorry if I am getting abit muddled with all this talk of to pay or not to pay social charges, could some-one please just pat me on the head and say, yes you are fine, or not. I recieve my state pension (being over 60) my OH doesn't yet as he isn't 65, we don't pay tax, or tax habitation, but we do pay social charges, is this right. Thanks alot.[/quote]

Hi,

      If you are paying charges on"revenus de capitaux mobiliers" (look on the "contributions sociales" demand) that is on bank interest etc. and is correct--if there is a line saying "revenus étrangers" and a rate of 0.5% only , this is on your pensions and is not correct, as if one of a couple has UK state pension, all their pension income is exempt. If this is the case send me your email address and I will send you a model letter to claim repayment.

[minnie]

Please can I clarify "if one of a couple has state pension, all their pension income is exempt". Do you mean that even if the other of the couple isn't of state pension age even their ordinary work pension income is exempt from social charges?

[chirpy]

[8-)]WELL WE ARE ALL GETTING SLIGHTLY CONFUSED -PERHAPS A SENIOR MOMENT OR TWO. a new message to Parsnips and all.

I receive a government state pension ,a company one and an anuity which I was forced to transfer from a pension fund when I was made redundant.

I have been paying social taxes i.e.CSG,CRDS AND PREL.SOC ET CONT.SOLIDARITE for 8 years .

From previous posts am I CORRECT TO BELIEVE THAT I SHOULD NOT BE PAYING OR SHOULD NOT HAVE PAID THESE ON ALL MY PENSIONS .?

I am going to go with a  translater to meet the tax office and finally sort it out -I hope as in a weeks time I HAVE TO PAY THIS YEARS DEMAND .

If you are starting to claim re-assessment before the due date of 15thnovember 2009 then will I BE ABLE TO HOLD OFF THIS PAYMENT AND RE-ASSESS THE PREVIOUS 3 YEARS???

THANKS AGAIN.

[sweeper]

With regard to 'will I be able to hold off this payment?' the lady in the Tax office gave me a signed form detailing the claimed error and told me when I go to the Treasury to pay, then I show this form and pay the difference. Hope this helps.

[parsnips]

[quote user="minnie"]Please can I clarify "if one of a couple has state pension, all their pension income is exempt". Do you mean that even if the other of the couple isn't of state pension age even their ordinary work pension income is exempt from social charges?[/quote]

Hi,

   Yes, that's correct, in France it is the "foyer" or household that is the taxable entity, not the individual.

[parsnips]

[quote user="Ab"]

[8-)]WELL WE ARE ALL GETTING SLIGHTLY CONFUSED -PERHAPS A SENIOR MOMENT OR TWO. a new message to Parsnips and all.

I receive a government state pension ,a company one and an anuity which I was forced to transfer from a pension fund when I was made redundant.

I have been paying social taxes i.e.CSG,CRDS AND PREL.SOC ET CONT.SOLIDARITE for 8 years .

From previous posts am I CORRECT TO BELIEVE THAT I SHOULD NOT BE PAYING OR SHOULD NOT HAVE PAID THESE ON ALL MY PENSIONS .?

I am going to go with a  translater to meet the tax office and finally sort it out -I hope as in a weeks time I HAVE TO PAY THIS YEARS DEMAND .

If you are starting to claim re-assessment before the due date of 15thnovember 2009 then will I BE ABLE TO HOLD OFF THIS PAYMENT AND RE-ASSESS THE PREVIOUS 3 YEARS???

THANKS AGAIN.

[/quote]

Hi,

    You are correct that for all the years you have been receiving a UK state pension,and PROVIDED YOU HAVE HAD AN E121 FOR HEALTH CARE, you should have been paying NO social charges at all on your PENSIONS.    You should be able to claim back the charges wrongly taken for at least the last 3 years, and in my opinion, provided you have always declared the pensions correctly ,you are entitled to claim back for ALL previous years ,as the tax was taken ILLEGALLY,and there is provision for this.

     If the tax office do not accept this argument you should DEMAND that they give you a WRITTEN REFUSAL, and you can then take your case to the "CONCILIATEUR FISCAL" for your department , a free procedure ,and one that I have found very fair. If that fails you can take it to the "TRIBUNAL ADMINISTRATIF"--also free.

     It is possible to get a delay of payment but usually this is for amounts over 4 000€, but no harm in asking.

     I have always found it wise to deal with the tax office by writing and emailing, as you can frame your questions carefully, and get a written reply that you can use in any dispute.

      Good Luck-let us know how you get on.

[kitty]

I turned 60 in September and have been granted an E121 covering myself and my husband (55years old).

Come next May when we have to complete our tax form, how do we deal with the fact that we have had the E121 for only 3 months and therefore do not owe social charges for the last 3 months of 2009?

Thanks in advance for your advice.

Kitty

[parsnips]

[quote user="kitty"]

I turned 60 in September and have been granted an E121 covering myself and my husband (55years old).

Come next May when we have to complete our tax form, how do we deal with the fact that we have had the E121 for only 3 months and therefore do not owe social charges for the last 3 months of 2009?

Thanks in advance for your advice.

Kitty

[/quote]

Hi,

    If,as I assume , you started to receive your state pension at the same time you got your E121, then there will be no problem with your state pension. I think you may be referring to your husband's non-state pension(s)?  Have you declared before ,and paid CRDS on his pensions? If so, you could put a note on the 2047 and 2042 alongside your declaration saying that as from Sept. he has been covered by E121,and so is not liable for CRDS as from that month's pension (which you could show as two amounts -up to Sept, and after Sept).

   If you have not declared before I would just put on a note that you are covered by E121 and leave it at that.

[kitty]

Many thanks Parsnips.

I was referring to both my private pension and my husband's private pension. We have declared for years and paid CRDS of course (we took early retirement on reduced pensions).

Thanks again for your assistance

Kitty