allanb Posted March 16, 2009 Share Posted March 16, 2009 About a year ago there was some discussion of the fact that in certain circumstances a married woman, receiving a UK state pension by virtue of her husband's pension entitlement, could choose to pay voluntary contributions and obtain a higher pension in her own right, both the contributions and the pension adjustment being retroactive.My wife called the Pension Service to ask about this and was told that they were "inundated" with enquiries, so I presume that there were a lot of women who could possibly benefit from this. Anyway, she filed her application and in due course (September) received the pension arrears, plus a bit of interest, minus the total contributions.We are resident in France and my question is about income tax. I don't think there's any doubt that the pension and the interest are both taxable in France. Two of the relevant years were before we became resident in France, but since the money was received in 2008 and hadn't been taxed anywhere else, I don't suppose we can exclude it.But I wonder whether the contributions are deductible. I can't find anything in the rules, one way or the other; but they were certainly payments that had to be made in order to receive the income, so maybe they could legitimately be reported as charges, i.e. deductions from it.Does anyone know the answer or have an opinion? Link to comment Share on other sites More sharing options...
Albert the InfoGipsy Posted March 16, 2009 Share Posted March 16, 2009 allanb,Unless I'm misreading your post the amount your wife received already had the contributions knocked off, so the "charge" has already been taken into account." ... received the pension arrears, plus a bit of interest, minus the total contributions."Have I missed something? Link to comment Share on other sites More sharing options...
allanb Posted March 16, 2009 Author Share Posted March 16, 2009 No, you're not misreading it.Suppose she received £74, representing pension arrears £100, plus interest £10, minus contributions £36.She certainly has taxable pension £100 and taxable interest £10. The question is, can she deduct the £36 ? Link to comment Share on other sites More sharing options...
Ron Avery Posted March 16, 2009 Share Posted March 16, 2009 Allan, on the basis that pension contributions are deductible before tax in the UK where the contributions were paid , I would declare the "net" income of £74.I posted somewhere else that my O/H despite paying a B rate stamp for a number of years after marrying, was advised to ask for a pension forecast, she was initially told that she was due nothing at age 60, so on advice, she appealed and had to give all her work history this time. It then turned out because of her A rate contributions whilst single and having had two children, she received a pension starting from her 60th birthday. It's not very much but it had an invaluable E 121 sent with it, so its worth asking the question about pensiuon entitlement if you ever paid an A rate stamp at any time and/or had children whilst working. Link to comment Share on other sites More sharing options...
Albert the InfoGipsy Posted March 16, 2009 Share Posted March 16, 2009 allanb,As I read it the amount that went into her account was £74. In that case I'd declare that on your return. In the unlikely event of its being questioned it will be on her bank statement. If what you mean is that she paid her arrears contribution and then got £110 a few weeks later I'd still say you have a case for declaring £74 but it would take a bit more paperwork to prove. Link to comment Share on other sites More sharing options...
Gardengirl Posted March 16, 2009 Share Posted March 16, 2009 Hijacking the topic here, but still on women claiming pensions - plus men!I've just enquired about buying extra years of pension; it turned out that I can't do this, as I'm fully paid up for the years that can be bought, and it's too late for the years I missed when raising our family.However, some women or men reading this might be able to, and if it's sorted in the next couple of weeks, buying extra years can be at the current rate - the cost goes up at the start of the next tax year. Buying extra years applies whether you are still working or are retired.If you are missing some recent years of NI contributions, these can be bought at a fairly low rate, giving you years of extra pension payments. I rang the Pensions Advisory Service, who were most helpful, and based on what I could tell them they thought I could buy some years. Tel no: 0845 601 2923; they are v busy just now, but I only had to hang on for a few minutes. They gave me a NI tel number to ring : 0845 302 1479. This number was also answered v quickly! So if you call this number armed with NI number, plus the usual security stuff, they can call up your file and tell you if you can buy any years to ensure a bigger pension. I read about it in Saturday's Telegraph, in the finance section; sorry, don't know how to link. Sorry if this number can't be called from France. Hope someone out there can benefit from this. Good luck, Jo Link to comment Share on other sites More sharing options...
allanb Posted March 17, 2009 Author Share Posted March 17, 2009 [quote user="Ron Avery"]On the basis that pension contributions are deductible before tax in the UK where the contributions were paid, I would declare the "net" income of £74.[/quote]I think that's a fairly convincing argument. Thanks to Ron and Albert for their comments.This may not be a very important point, but I think both of you are suggesting not only that the contributions are deductible, but that it would be better to declare one net amount (the £74 in my example) rather than to declare the gross income and show the contributions separately as a deduction. I'm not sure this would actually make any difference - the Pension Service was simply doing us a favour by accepting the contributions as an offset, rather than asking for payment in advance. In any case there's no problem about documentation, since all the facts are set out very clearly in the letter we received. But I agree that showing just the net amount is simpler.You will be glad to know that the real amount involved is enough for me to take my wife out for dinner on the tax deduction. (She will probably say that technically she will be taking me out.) Link to comment Share on other sites More sharing options...
parsnips Posted March 17, 2009 Share Posted March 17, 2009 Hi, I have been told that voluntary NI contributions can be claimed as a deduction on form 2042 at box DD "deductions diverses", I have not done this myself, but I have, over several years, successfully claimed at DD for contributions to the CMU. The "expert" on a well-known english speaking newspaper has argued that this is not correct, but the facts and the authoritative french legal magazine "Le Particulier" contradict his view. For both NI and CMU you should quote on the 2042 ,"CMU" or "cotisationsd'assurance veillesse" ,and the reference (CGI,art.156-II,4°,10°,et11°) and enclose- for CMU the attestation sent to you at the end of the year showing your payments, and for NI some similar proof. I don't guarantee that your tax office will allow these deductions, but you risk nothing by trying. Link to comment Share on other sites More sharing options...
Hereford Posted March 17, 2009 Share Posted March 17, 2009 I can well believe French CMU deductions are allowable in France but UK national insurance!! In the UK the whole of the pension arrears would have been taxable as national insurance is not a "pension contribution" for tax purposes contrary to what was stated in an earlier posting.Mrs H.. Link to comment Share on other sites More sharing options...
AnOther Posted March 17, 2009 Share Posted March 17, 2009 Don't forget that the cost of buying back years goes up by 50% in April.Just the other day sent off a cheque for about £2.4k to top 'er indoors up, ouch [:'(] Link to comment Share on other sites More sharing options...
Gardengirl Posted March 17, 2009 Share Posted March 17, 2009 Very much ouch! Your wife must be going to get millions in her pension!I was quoted about £445 per year to buy NI past years by the Pensions Advisory Service, which would then pay out about £1200 per year pension. As I said earlier, I didn't have any gaps in payments when I enquired, but if any of you out there have NI payment gaps it's very well worth looking in to.Jo Link to comment Share on other sites More sharing options...
parsnips Posted March 17, 2009 Share Posted March 17, 2009 [quote user="Hereford"]I can well believe French CMU deductions are allowable in France but UK national insurance!! In the UK the whole of the pension arrears would have been taxable as national insurance is not a "pension contribution" for tax purposes contrary to what was stated in an earlier posting.Mrs H..[/quote]Hi, As I said, someone told me they got this allowed--it's worth a try. Link to comment Share on other sites More sharing options...
gosub Posted March 18, 2009 Share Posted March 18, 2009 [quote user="gardengirl "]Very much ouch! Your wife must be going to get millions in her pension!I was quoted about £445 per year to buy NI past years by the Pensions Advisory Service, which would then pay out about £1200 per year pension. As I said earlier, I didn't have any gaps in payments when I enquired, but if any of you out there have NI payment gaps it's very well worth looking in to.Jo [/quote]On the same subject, don't forget if you had children or were a carer and gave up work to care for them from 1978 onwards; you may be able to claim Home Responsibilities Protection (HRP) and get credits for your retirement pension.[:D] Link to comment Share on other sites More sharing options...
AnOther Posted March 18, 2009 Share Posted March 18, 2009 Topical article in the weekend Telegraph Link to comment Share on other sites More sharing options...
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