Wealth Tax

[dp]

[quote user="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.



[/quote]

I like this EXACTLY as though it was your idea in the first place.

 

[Benjamin]

[quote user="dp"]

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

Regards

David

 

[/quote]

I think you were the first person to introduce the notion of confusion into this thread.

[dp]

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

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

Regards

David

 

[/quote]

I think you were the first person to introduce the notion of confusion into this thread.



[/quote]

Please read the threads - I said that your answer served to confuse the issue I did not make a personal remark about you being confused.

 

[Pickles]

[quote user="dp"]

You can't answer my original question can you ?

[/quote]

Sorry, but my knowledge of the French system is not comprehensive enough to give you a definitive answer, I'm afraid. From what I do know, I would expect to discover that a SIPP in income drawdown is counted as part of your fortune for ISF purposes (whereas an annuity or company pension would not count), as Will & Benjamin indicated above, because the French Fisc tends to take very rigid stances on what it counts as a pension fund (or anything else for that matter), and is not inclined to be flexible to cope with products that do not conform to its idea of what a pension should be. If you have other investments as well as the SIPP and are going to become French resident then I understand that it is worth your while investigating the purchase of "assurance vie" contracts BEFORE you move, as these receive preferential tax treatment in France AND if done in advance of your move would give you a preferential tax treatment unavailable to you afterwards. The really clever part would be if there were a mechanism for the (for instance) assurance vie contracts to be purchased under the SIPP wrapper - but that is almost certainly impossible.

Off-topic I know, but I seem to recall seeing in Sarko's mandatory disclosure of his wealth that he owned no property (having just sold his flat in Neuilly) but had a couple of million € in assurance-vie contracts. If it's good enough for him ...

Pickles

[Gluestick]

[quote] Off-topic I know, but I seem to recall seeing in Sarko's mandatory disclosure of his wealth that he owned no property (having just sold his flat in Neuilly) but had a couple of million € in assurance-vie contracts. If it's good enough for him ...

Pickles
[/quote]

With French inheritance tax being what it is: and wealth tax being what it is: and since le petit Nicolas has been a politician since the age of 22 (Councillor, Neilly-Sur-Seine, Paris) and since applying oneself to politics gives little time for much else............ and since he was a Deputy in the National Assembly in 1988; and since professional politicans are not well paid...................................

How did he amass 2,000,000 Euros of disposable wealth?  [8-)]

One merely wonders..................

 

 

[dp]

[quote user="Pickles"][quote user="dp"]

You can't answer my original question can you ?

[/quote]

Sorry, but my knowledge of the French system is not comprehensive enough to give you a definitive answer, I'm afraid. From what I do know, I would expect to discover that a SIPP in income drawdown is counted as part of your fortune for ISF purposes (whereas an annuity or company pension would not count), as Will & Benjamin indicated above, because the French Fisc tends to take very rigid stances on what it counts as a pension fund (or anything else for that matter), and is not inclined to be flexible to cope with products that do not conform to its idea of what a pension should be. If you have other investments as well as the SIPP and are going to become French resident then I understand that it is worth your while investigating the purchase of "assurance vie" contracts BEFORE you move, as these receive preferential tax treatment in France AND if done in advance of your move would give you a preferential tax treatment unavailable to you afterwards. The really clever part would be if there were a mechanism for the (for instance) assurance vie contracts to be purchased under the SIPP wrapper - but that is almost certainly impossible.

Off-topic I know, but I seem to recall seeing in Sarko's mandatory disclosure of his wealth that he owned no property (having just sold his flat in Neuilly) but had a couple of million € in assurance-vie contracts. If it's good enough for him ...

Pickles
[/quote]

Hi

I have received a response from my SIPP provider who tells me that the SIPP which I have, is, from an asset point of view, identical to a company pension. They said that in a company pension the employer owns the assets and the employee would be a benificiary of them. In my SIPP the trustees own the assets and I am the beneficiary. In their opinion, if it is true that you do not need to declare a Company Pension, then I should not need to declare the SIPP.

Regards

David

 

 

 

[Gluestick]

[quote user="dp"]

I have received a response from my SIPP provider who tells me that the SIPP which I have, is, from an asset point of view, identical to a company pension. They said that in a company pension the employer owns the assets and the employee would be a benificiary of them. In my SIPP the trustees own the assets and I am the beneficiary. In their opinion, if it is true that you do not need to declare a Company Pension, then I should not need to declare the SIPP.

Regards

David [/quote]

French law is wholly different from English law: French law does not recognise trusts for example.

The reason that a company pension is different from a personal pension, is that a limited company is an entity of its own volition.

Trustees do not own any asset under English law: they exercise trusteeship and care and control; ergo the trustees of a SIPP or any other financial mechanism designed to shield and shelter assets cannot own any of the assets sheltered.

If the trustees "owned" any assets then they personally would be liable for income and capital taxes both throughout the life of the trust and upon disolution and/or liquidation.They clearly aren't thus they cannot!

Clearly, the lifetime interest of the trust is vested in yourself from the settlor (you) and the whole interest devolves in you once a certain event (retirement) triggers changes in the trust terms; i.e. it moves from a recipient of assets into a distributor of assets to you, the only beneficiary. Thus it is a beneficial trust.

Once the residual capital value (after any cash drawdown) is commuted into an annuity, then the trust ceases and is wound up. Thus the assets are "With Reservations" thus you exercise some level of ownership.

English trust law and taxation thereof all changed two years ago, so be careful!

Personally, I would take considered counsel from tax lawyers with appropriate cross-border expertise.

 

[LesLauriers]

From an article by Sykes Anderson on FrenchEntrée.com,

"Q: Could French wealth tax apply to my pension fund if I become French resident?

A: Yes. It can apply to pension funds and care needs to be taken here especially with larger funds."

[freddy]

Having discussed this elsewhere another factor that is likely to be taken into account by the french tax authorities is whether your employer has historically contributed to it or if has just been your contributions. If the former it is easier to argue it is a pension as french would understand it.

This would imply that the correct anwer to your question is maybe.

But these varied opinions are really why you must take professional advice as it could make a huge difference - if you use the right advisor he may well be able to argue precident with the tax authorities that you simply wouldn't stand a chance on.

[chessfou]

[quote]another factor that is likely to be taken into account by the french

tax authorities is whether your employer has historically contributed

to it or if has just been your contributions. If the former it is

easier to argue it is a pension as french would understand it.[freddy][/quote]

Although the French (effectively) have plenty of "self-employed" artisans.