Wealth Tax

[dp]

Hi

I wonder if anyone knows whether the value of a UK SIPP needs to be included in the Wealth Tax computation ?

Regards

David

 

[Will]

My understanding (not that I am in a position to know) is that if French fiscally resident, then all of your worldwide assets, including pension plans etc, have to be declared. If you do not meet French tax residency qualifications (words chosen carefully because you can, under double taxation agreements, fulfil the qualifications but still pay taxes elsewhere) then just your France-based assets count towards wealth tax.

Clear as mud, isn't it?

 

[Benjamin]

The question to ask yourself is who owns the SIPP?

Once you answer that, your question answers itself notwithstanding Will's, possible, exception. Of course once you purchase an annuity you have effectively sold the SIPP and accepted a regular (pension) income in it's place so you no longer own the capital sum.

With company pensions it's  different since before you are in receipt of a pension the fund is only promising to pay you at some point in the future so you cannot be held to own a chunk of your company's pension fund.

If your SIPP fund is of a sufficient size (say £100k plus) then you might want to take professional advice on Income Drawdown as a way of accessing an income from your fund without purchasing an annuity.

[dp]

If I could access unlimited funds then I would consider myself the owner of the SIPP. However you cannot do this and you can only draw out a sum each year equivalent to the current annuity rates.

You have said once you purchase an annuity you have effectively sold the SIPP and accepted a regular (pension) income in it's place so you no longer own the capital sum but the SIPP is only a regular pension income with the difference being that I can specify where the whole fund is invested.

Are you in anyway experienced and/or qualified in this field, as your answer just serves to confuse ?

Regards

David

 

[LesLauriers]

The answers you have received are very similar to the ones I gave you. I like Benjamin believe that a SIPP could well be subject to wealth tax as it does not appear to fulfill the French qualification of being a company or government pension.

That said I go back to my original suggestion that you spend a few hundred £'s and obtain a qualified answer from someone like PKF Guernsey, at least then you will know which way to jump.

It may for example be better to buy an annuity at this time or conversely it may be better to pay the ISF bill, only you will be able to calculate the alternatives but at least you will be able to plan with confidence.

A forum such as this is not the best place to obtain the quality of advice you are looking for on such a complex question and I would suggest that your average fonctionaire at the impots would be completely lost as there is no comparable product to a Sipp in France.

[LesLauriers]

One further thought.

You have the ability to bequeath the contents of your SIPP when you die, something you cannot do with a company or government pension.

I would suggest that if you can bequeath it - you own it.

Annuities are treated as "rente viagère" in France not as pensions, the do not get the 10% deduction that pensions get but can be subject to allowances of up to 70% depending upon age - however they are subject to 11% social charges.

[Will]

I agree - this is the sort of question that needs to be answered by somebody professionally qualified, who is accountable for the accuracy of their advice, and with comprehensive knowledge of both British pension arrangements and French tax law. In other words, advice that needs to be paid for.

[dp]

Thanks very much for all your replies.

The reason for my post was that I hoped that someone with specific experience of this matter may be able to answer my question without me paying the £1200 - £1400 that PFK have quoted for this info.

I thought that this type of sharing information was one of the objects of these forums.  

I have never asked for anyone who doesn't have specific knowledge to reply to my post and I always find it a little bizarre why anyone would a) comment on a question which they know nothing about  and/or b) take the time and trouble to preach to someone that they need to pay for specific technical info.

Regards

David

 

[LesLauriers]

"I thought that this type of sharing information was one of the objects of these forums."

A lot of people have knowledge and experience which they have freely shared with you however you have taken exception to the replys given.

Perhaps it's a case of "if you don't like the answers then you shouldn't ask the question".  Or perhaps you just got out of bed on the wrong side this morning!

Anyway the good news, is that once you have paid PKF their £1400, you will be in a position to advise the rest of us.

We will wait to hear from you.

[Will]

Because
a. some of us may have a lot of experience of French taxation matters though no personal experience of the wealth tax (rather different from knowing nothing), and we think in order to avoid misunderstandings that it's better to make it clear that we have no direct experience; and
b. we have seen, both at first hand, and in what has happened to people we know, the dangers of following information given on the internet by those who cannot be held to account rather than going to those with the knowledge and qualifications (who, in my experience, stand to save you more than their fee).

LesLauriers in particular has always given good and valid advice on these subjects and I am sure he can find somewhere else where the advice will be more appreciated. Especially as those in a position to consider the weath tax should be in a position to pay the going rate.

 

[dp]

Hello

I have certainly not taken exception to anything.

I am extremely grateful for any help and I understand that there are lots of people who have knowledge and experience indeed this was the type of person I was trying, unfortunately without success, to reach.

I do apologise if my last rely was taken wrongly but I do find that if people try to give answers on a subject which they know nothing about then it just serves to confuse the issue - it would be like me giving advice in the Gardening section !

Regards

David

 

[dp]

My last reply was to LesLauriers.

In reply to Will :

a. some of us may have a lot of experience of French taxation matters though no personal experience of the wealth tax

Then why do you reply to a thread specifically on Wealth Tax - as I previosly said 'bizarre'.

LesLauriers in particular has always given good and valid advice on these subjects and I am sure he can find somewhere else where the advice will be more appreciated. Especially as those in a position to consider the weath tax should be in a position to pay the going rate.

I have never disputed this and I am sure he is a thoroughly knowlegeable and all round nice chap but the thread was on 'ealth Tax' which seems to be outside his knowlede base. As for being in a position to pay the going rate, not that its any of your business, but I was using the forum as a first port of call which is what I thought it was for.

Regards

David

 

 

[Nick Trollope]

[quote user="dp"]

I have never disputed this and I am sure he is a thoroughly knowlegeable and all round nice chap but the thread was on 'ealth Tax' which seems to be outside his knowlede base. As for being in a position to pay the going rate, not that its any of your business, but I was using the forum as a first port of call which is what I thought it was for.

 

[/quote]

Then you'd be wrong. This is a discussion forum. If you don't want to discuss, then at least have the good grace not to snipe at people who have no other interest than to help you, in whatever way they can.

Furthermore and in my unqualified opinion, LL is quite right. So you are wrong on that issue, too.

You are in the lucky situation of being able to afford professional advice, so I suggest that you do just that and, if you feel that you can contribute something to the forum, you could let us all know what the advice was.

 

[LesLauriers]

[quote user="dp"]

'ealth Tax' which seems to be outside his knowlede base.

[/quote]

I believe that I have a reasonable knowledge of the subject, having completed returns for the last 5 years. However, I do not have a Sipp and the question on Sipps is one that has never arisen before, albeit one that I have given some passing thought to.

You will appreciate that the number of Sipp holders retiring to France in advance of having their financial affairs in order is low and I suspect that the vast majority of Impot staff would not have been able to offer as much advice as you have been given here and on Total France.

If it helps here is another quote from Sykes Anderson which is from an article on Sipps and France:

"What else?

Go through all the usual angles you would do in England, remembering that SIPPs

and trust law do not exist in France so the automatic tax and other advantages

you get in the UK do not necessarily apply. You need to think about matters such

as (inter alia) taxation of income, capital gains, inheritance tax, VAT, wealth

tax and the UK-France Double Tax Treaty."

However if you want a definitive copper bottomed answer here it is - Yes the Sipp is taken into account for ISF.

Me? I wouldn't take anything as important as this as gospel I would want it in writing from a credible source which is why I paid PKF for advice prior to arrival and found them to be good value for money.

Do let us know how you get on, taxation and tax advantageous investing are such interesting topics when it's raining outside!

[dp]

[quote user="nicktrollope"][quote user="dp"]

I have never disputed this and I am sure he is a thoroughly knowlegeable and all round nice chap but the thread was on 'ealth Tax' which seems to be outside his knowlede base. As for being in a position to pay the going rate, not that its any of your business, but I was using the forum as a first port of call which is what I thought it was for.

 

[/quote]

Then you'd be wrong. This is a discussion forum. If you don't want to discuss, then at least have the good grace not to snipe at people who have no other interest than to help you, in whatever way they can.

Furthermore and in my unqualified opinion, LL is quite right. So you are wrong on that issue, too.

You are in the lucky situation of being able to afford professional advice, so I suggest that you do just that and, if you feel that you can contribute something to the forum, you could let us all know what the advice was.

 

[/quote]

 

So it's not an advice forum - OK I stand corrected. I presumed that as the vast majority of posts are looking for some advice from someone who has been in a similar position that my question would hopefully reach one of these people. Instead it reached certain people who wanted to give advice on a subject they knew nothing about - as I have said before 'bizarre'. 'Bizarre', you know, is not a very strong word and really shouldn't incur this sort of hostile reaction.

I am sort of getting a feeling that maybe there is an underlying feeling of 'Sour Grapes' from certain posters when talking about Wealth Tax - that's a little sad.

I think I have started to understand your concept of contributing - maybe I'll find a forum on Brain Surgery or Nuclear Physics and make the same sort of contributions that were made to my question.

Bye

David 

 

[dp]

[quote user="LesLauriers"][quote user="dp"]

'ealth Tax' which seems to be outside his knowlede base.

[/quote]

I believe that I have a reasonable knowledge of the subject, having completed returns for the last 5 years. However, I do not have a Sipp and the question on Sipps is one that has never arisen before, albeit one that I have given some passing thought to.

You will appreciate that the number of Sipp holders retiring to France in advance of having their financial affairs in order is low and I suspect that the vast majority of Impot staff would not have been able to offer as much advice as you have been given here and on Total France.

If it helps here is another quote from Sykes Anderson which is from an article on Sipps and France:

"What else?
Go through all the usual angles you would do in England, remembering that SIPPs and trust law do not exist in France so the automatic tax and other advantages you get in the UK do not necessarily apply. You need to think about matters such as (inter alia) taxation of income, capital gains, inheritance tax, VAT, wealth tax and the UK-France Double Tax Treaty."

However if you want a definitive copper bottomed answer here it is - Yes the Sipp is taken into account for ISF.

Me? I wouldn't take anything as important as this as gospel I would want it in writing from a credible source which is why I paid PKF for advice prior to arrival and found them to be good value for money.

Do let us know how you get on, taxation and tax advantageous investing are such interesting topics when it's raining outside!

[/quote]

Hello

I sent my last post at the same time you posted this so sorry for the crossover.

Thank you for your comments.

Regards

David

[Benjamin]

[quote user="dp"]

If I could access unlimited funds then I would consider myself the owner of the SIPP. However you cannot do this and you can only draw out a sum each year equivalent to the current annuity rates.

You have said once you purchase an annuity you have effectively sold the SIPP and accepted a regular (pension) income in it's place so you no longer own the capital sum but the SIPP is only a regular pension income with the difference being that I can specify where the whole fund is invested.

Are you in anyway experienced and/or qualified in this field, as your answer just serves to confuse ?

Regards

David

 

[/quote]

In my original reply to you I said "then you might want to take professional advice" something that appears to have been suggested to you in an earlier related posting.

You seem to be confused between SIPPs and Income Drawdown as you are now saying that you are taking a regular pension income.

Could I suggest that you might like to look at Wikipedia and search under SIPP and you also go to www.pru.co.uk/retire/annuities_04/income_draw/ which is a Prudential UK site explaining Income Drawdown and if you then still want answers you come back and re-specify the original question as you seem confused with all this terminology.

[Will]

I don't see how not having been in a position to pay wealth tax oneself should prevent anybody from trying to provide helpful information. One can still know a lot about taxation, particularly the double taxation agreement between France and Britain, which in my opinion is highly relevant in determining where you pay your taxes, including wealth tax, and as such is likely to determine what is actually assessed for tax. I know that David does not want my opinion, but in case anybody else may be wondering the same thing I agree that a SIPP is likely to count towards wealth tax is you meet French residence qualifications though, if you are resident elsewhere - and even if you are, you can still be liable for wealth tax on property and investments held in France - in my opinion a SIPP is not likely to count. But one should take good professional advice. It is still a good question, though, because personal pension funds of this type are quite outside the French idea of retirement plans. And, most importantly, an accountant may be able to find a way of 'ring fencing' the fund to escape being assessed in France.

[dp]

[quote user="Benjamin"][quote user="dp"]

If I could access unlimited funds then I would consider myself the owner of the SIPP. However you cannot do this and you can only draw out a sum each year equivalent to the current annuity rates.

You have said once you purchase an annuity you have effectively sold the SIPP and accepted a regular (pension) income in it's place so you no longer own the capital sum but the SIPP is only a regular pension income with the difference being that I can specify where the whole fund is invested.

Are you in anyway experienced and/or qualified in this field, as your answer just serves to confuse ?

Regards

David

 

[/quote]

In my original reply to you I said "then you might want to take professional advice" something that appears to have been suggested to you in an earlier related posting.

You seem to be confused between SIPPs and Income Drawdown as you are now saying that you are taking a regular pension income.

Could I suggest that you might like to look at Wikipedia and search under SIPP and you also go to www.pru.co.uk/retire/annuities_04/income_draw/ which is a Prudential UK site explaining Income Drawdown and if you then still want answers you come back and re-specify the original question as you seem confused with all this terminology.



[/quote]

Trust me I'm not confused and if you are going to make such a statement please get your facts right first.

I have a SIPP in Income Drawdown - this is a standard term within the Pensions Industry. 

Please, please do not make a statement of someone being confused when really you don't have a clue yourself. 

 

 

 

[dp]

[quote user="Will"]I don't see how not having been in a position to pay wealth tax oneself should prevent anybody from trying to provide helpful information. One can still know a lot about taxation, particularly the double taxation agreement between France and Britain, which in my opinion is highly relevant in determining where you pay your taxes, including wealth tax, and as such is likely to determine what is actually assessed for tax. I know that David does not want my opinion, but in case anybody else may be wondering the same thing I agree that a SIPP is likely to count towards wealth tax is you meet French residence qualifications though, if you are resident elsewhere - and even if you are, you can still be liable for wealth tax on property and investments held in France - in my opinion a SIPP is not likely to count. But one should take good professional advice. It is still a good question, though, because personal pension funds of this type are quite outside the French idea of retirement plans. And, most importantly, an accountant may be able to find a way of 'ring fencing' the fund to escape being assessed in France.[/quote]

Will it's not that I don't want your advice but I asked a very specific question and really it could, in my humble opinion, be best answered by someone with the relevant specific experience.

I certainly did not come on this forum to cause offence but, bloomin-eck people are very quick on the draw here.

Thanks again for your contribution.

Regards

David

 

[Benjamin]

Are you saying that you can only hold a SIPP if it's within an Income Drawdown scheme or am I misinterpreting what you mean?

[Pickles]

[quote user="Benjamin"]Are you saying that you can only hold a SIPP if it's within an Income Drawdown scheme or am I misinterpreting what you mean?

[/quote]

No, he isn't., and yes, you probably are, I'm afraid.

The basic way that SIPPs work IIRC splits into 3 phases:

1) you save money into them, to which HMRC refunds the appropriate tax paid when you earned that money. Dependent on the SIPP provider, you then have a choice of funds or other vehicles in which to invest.

2) When you choose to "retire", you can then take some money out as a lump sum and/or take out smaller sums which are effectively a pension, but with the capital still invested in whatever funds you prefer. This is what is known as Income Drawdown.

3) (I stand to be corrected here but ...) By the time you hit 75, I believe that you are required to have purchased an annuity with what remains of the money in your SIPP, with the annuity then providing your income.

Pickles

[dp]

[quote user="Benjamin"]Are you saying that you can only hold a SIPP if it's within an Income Drawdown scheme or am I misinterpreting what you mean?



[/quote]

Nope I'm not saying that, merely responding to the fact that you said I was confused. 

I know perfectly well what sort of policy I hold but I wouldn't dream of offering any advice on the myriad of different permutations there may be for a SIPP. I know you might find that concept a bit hard to grasp but stick with it you'll get there.

  

[Benjamin]

[quote user="Pickles"][quote user="Benjamin"]Are you saying that you can only hold a SIPP if it's within an Income Drawdown scheme or am I misinterpreting what you mean?

[/quote]

No, he isn't., and yes, you probably are, I'm afraid.

The basic way that SIPPs work IIRC splits into 3 phases:

1) you save money into them, to which HMRC refunds the appropriate tax paid when you earned that money. Dependent on the SIPP provider, you then have a choice of funds or other vehicles in which to invest.

2) When you choose to "retire", you can then take some money out as a lump sum and/or take out smaller sums which are effectively a pension, but with the capital still invested in whatever funds you prefer. This is what is known as Income Drawdown.

3) (I stand to be corrected here but ...) By the time you hit 75, I believe that you are required to have purchased an annuity with what remains of the money in your SIPP, with the annuity then providing your income.

Pickles

[/quote]

Exactly!

I am in situation1) that you describe above i e I am not in an Income Drawdown and do not have to be at any time in the future. I can simply chose to purchase an annuity at any time.

Mrs Benjamin is in situation 2) as you describe above.

Mrs Benjamin will eventually, if she decides not to purchase an annuity in the meantime, have to purchase one under current pensions legislation when she reaches 75 years.

[dp]

[quote user="Pickles"][quote user="Benjamin"]Are you saying that you can only hold a SIPP if it's within an Income Drawdown scheme or am I misinterpreting what you mean?
[/quote]

No, he isn't., and yes, you probably are, I'm afraid.

The basic way that SIPPs work IIRC splits into 3 phases:
1) you save money into them, to which HMRC refunds the appropriate tax paid when you earned that money. Dependent on the SIPP provider, you then have a choice of funds or other vehicles in which to invest.
2) When you choose to "retire", you can then take some money out as a lump sum and/or take out smaller sums which are effectively a pension, but with the capital still invested in whatever funds you prefer. This is what is known as Income Drawdown.
3) (I stand to be corrected here but ...) By the time you hit 75, I believe that you are required to have purchased an annuity with what remains of the money in your SIPP, with the annuity then providing your income.

Pickles
[/quote]

Crikey - someone who knows what he's on about.

On point 3, I am not sure of the actual age, but yes under current legislation you have to purchase an annuity with what is in your SIPP basket.

You can't answer my original question can you ?

Regards

David