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Advice On Social Charges Please


Grecian
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Could anybody please indicate to me as to what the French social charges of 11%, are payable on please.

 If myself and my wife make the move over, we would basically be living on her ill-health company pension, incapacity benefit, my early retirement company pension, and any income derived from our savings.

 Will the two pension incomes be liable to the social charges?

Is incapacity benefit liable?

Also if/when we make retirement age, will our UK state pension be liable?

 I have been trawling through this excellent website, and trying to find information on tax free or tax advantageous vehicles. I thought I was getting somewhere with PEAs, but now I am reading about Assurance Vies, now I have to be really thick here, but are these two animals one of the same, or two different entities?

 What are the implications of our old friend social charges, either on one or both of them please?

Just to confuse me further I have stumbled upon Livret A, Codevi and LEPs, same old boring question I’m afraid, are these three liable to social charges?

Well I hope anybody reading this isn’t as confused as I am, any help would be much appreciated.

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I thought when you asked this question last time we cleared up that CSG/CRDS/PS, which is what I take it you are referring to, were not payable on pensions for which your entitlement was built up outside France (thanks to an EU ruling that effectively stopped France imposing this tax on foreign pensions).

So we just need somebody to say whether or not CSG etc is payable on PEA, Assurance Vie, Livret A, Codevi or LEPs.

(does your name Grecian indicate that you are an Old Blue?)

 

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Company pensions are exempt from social charges for the duration of your E106, thereafter they are subject to CRDS at 0.5%.  Once you reach retirement age and qualify for a form E121, your company pensions and your old age state pensions are exempt for life.

Savings interest, PEAs and Assurance Vies are subject to CSG/CRDS/PS at 11%. 

Codevi, Livret A and LEPs are exempt from social charges.

 

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Will/Sunday Driver many thanks for the replies, I have now got my head around all things French, regarding social charges.

Regarding the Codevi, Livret A and LEPs, what is the best interest rate achievable at the moment on these investments?

Will in answer to your question regarding my user name 'Grecian', nothing Blue about it I'm afraid. It refers to the nickname of my home town football club, Exeter City, who are known as 'The Grecians', although I do not live there anymore, I now reside in East Yorkshire.

 

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Assurance Vie and PEA are entirely different species.

Assurance Vie - financial products.

PEA comes in two flavours - (a) financial product in tax wrapper; (b) plain vanilla tax wrapper.

PS. Just because financial products are marketed to make a profit for the insurance co. or bank producing them does not automatically mean that the purchaser will lose money (sometimes there is a little left over).

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Sunday Driver,

Correct me if I am wrong but I was under the impression that you had to pay all three social charges (CSG,CRDS & PS) on UK company pensions if you did not have an E106 or E121, not just CRDS at 0.5%.

Regards,

Glyn

 

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What SD has posted is correct.  You pay CRDS at 0.5% through your income tax payment if you are not a holder of an E 106 or E121.

You pay CSG and PS at 11% (whether you have an E form or not)  on unearned income like rent and savings interest as a separately "invoiced"  payment based on your declared un - earned income, this does not include pensions.

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[quote user="Ron Avery"]

You pay CSG and PS at 11% (whether you have an E form or not)  on unearned income like rent and savings interest as a separately "invoiced"  payment based on your declared un - earned income, this does not include pensions.

[/quote]

I am sure you are aware already Ron but for the benefit of others a "Pension" paid from a purchased annuity is subject to 11% social charges after substantial allowances.

I suspect that many people would call an annuity payment their pension payment.

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leslauriers,

Is the following, then, a reasonable summary and can you please fill in the missing bits for 3a-3b-3c?

(1) State pension - exempt

(2) company pension:

(2a) during E106 - exempt

(2b) between E106 and E121 - subject to 0.5% CRDS

(2c) during E121 - exempt

(3) personal pension (a.k.a. private pension) in drawdown?

(3a) ?

(3b) ?

(3c) ?

(3d) purchased annuity - subject to 11% (subject to caveats & allowances)
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[quote user="chessfou"]leslauriers,

Is the following, then, a reasonable summary and can you please fill in the missing bits for 3a-3b-3c?

(1) State pension - exempt

(2) company pension:

(2a) during E106 - exempt

(2b) between E106 and E121 - subject to 0.5% CRDS

(2c) during E121 - exempt

(3) personal pension (a.k.a. private pension) in drawdown?

(3a) ?

(3b) ?

(3c) ?

(3d) purchased annuity - subject to 11% (subject to caveats & allowances)[/quote]

Interesting question that I don't know the definitive answer to, in the eyes of the French a personal pension pot may be considered as savings and any drawdown savings income.

 If the personal pension is used to purchase an annuity then it is subject to social charges, however if it is used as a source of income then it depends upon how the French tax man would look at it.

The only comment I have found is "the treatment of the pension is determined by whether or not the pension received is in consideration of payments made by the taxpayer".

In which case it could potentially be treated as savings income at worst or as an annuity at best.

Any thoughts from SD, Ron or Will please.

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