Assurance Vie and CMU

[Glyn]

Does anyone know how any contributions for the CMU would be calculated on any interest earned or income received from an Assurance Vie product.

Thanks,

Glyn

 

 

[LesLauriers]

CMU contributions are based upon your RFR (Revenu fiscal de référence) figure from your tax return. So only the taxable component of a withdrawal would be subject to CMU (plus of course social charges and income tax).

[Glyn]

leslauriers,

 

I thought you may have the answer as you seem to be the expert on Assurance Vie's[;-)]

 

So using the following example

 

If a married individual makes a withdrawal of €50,000 within 4 years, and the growth from inception is, say, 20% over that period, the taxable element of the withdrawal is €10,000. This is then taxed at 46% (35% tax, 11% social security). Resulting in a tax of €4600. CMU contributions would be 8% of the taxable element (€10,000) resulting in €800.

 

How is the withdrawal decalared on the tax form? In the above example would just the €10,000 be entered?

 

Thanks for your help,

 

Glyn

[LesLauriers]

Your AV provider will send you a form following the end of year in which you make the withdrawall and this will show both the amount to enter on your tax return and also which box to enter it in.

In the example you have given you may choose to pay tax at the forfait rate of 35% or  at your highest rate, which unless you are single and earning a lot is liable to be less than 35%.

You have to tell your provider how you wish to be taxed when you make the withdrawal.

[Cassis]

This also applies to interest on Livret savings like ING Epargne Orange - you choose how you want to be taxed for the year (before the 31st December of the year in question) and they send you a statement telling you the amount to declare and where on your tax form.

[Bastet]

[quote user="Leslauriers"]CMU contributions are based upon your RFR (Revenu fiscal de référence) figure from your tax return.[/quote]

This is what I thought and duely declared, as in previous years.  Several weeks ago, I find a gentleman from CPAM on my doorstep with our dossier, enquiring as to how we could possibly exist on such a meagre income. When I told him we had other tax free income, which isn't taken into account when the RFR is calculated, he informed me that they must be informed of every cent that comes into the household, whether it's taxable or not.     He showed me the parts on the form where you have to declare ALL other incomes. He went off having taken notes of (the tax-free) interest from our savings accounts, and we were later informed of our contributions.  He has made the rounds to several other local households, many of us Brits who have made the same error.

[LesLauriers]

[quote user="Bastet"]

[quote user="Leslauriers"]CMU contributions are based upon your RFR (Revenu fiscal de référence) figure from your tax return.[/quote]

This is what I thought and duely declared, as in previous years.  Several weeks ago, I find a gentleman from CPAM on my doorstep with our dossier, enquiring as to how we could possibly exist on such a meagre income. When I told him we had other tax free income, which isn't taken into account when the RFR is calculated, he informed me that they must be informed of every cent that comes into the household, whether it's taxable or not.     He showed me the parts on the form where you have to declare ALL other incomes. He went off having taken notes of (the tax-free) interest from our savings accounts, and we were later informed of our contributions.  He has made the rounds to several other local households, many of us Brits who have made the same error.

[/quote]

Could you be specific please - which tax free accounts exactly?

[Cassis]

Can you get interest bearing accounts (not PEA ) that are tax free in France?

[LesLauriers]

Yes.

Livret A from La Poste or Caisse D'Epargne pays 2.75% max deposit 15300€ per member of the family.

Codevi from La Poste and most Banks pays 2.75% max deposit 4600€ (due to increase  to 6000€) adults only.

LEP from La Poste/ Banks pays 3.75% max deposit 7700€ only available if your tax demand is less than 709€.

Livret Jeune pays 4% max deposit 1600€ 12 to 25 year olds only.

None of these accounts are reported on your income tax return but are reported on CAF and wealth tax returns. From the previous posters note it may be that CPAM also wish these to be reported and therefore chargeable but that is contrary to the info on the Ameli site. These accounts do not attract social charges.

Assurance Vie's allow interest to grow tax and social charge free but are subject to all taxes when withdrawn but you can withdraw 4600€ per person tax and social charge free after 8 years.

[Bastet]

[quote user="Leslauriers"] From the previous posters note it may be that CPAM also wish these to be reported and therefore chargeable but that is contrary to the info on the Ameli site. [/quote]

As it happens, we are disputing the amount of contribution demanded.

Could you please direct me to the info on the Ameli site to which you are referring?    I have had a look but my French isn't up to detailed searches. Thanks very much.

[Sunday Driver]

You'll find it [url=http://www.ameli.fr/211/DOC/705/fiche.html?page=2]here[/url].  Here's a translation:

You do not have a contribution to pay if the revenu fiscal de référence of your tax foyer is less than 7 083 € ; persons receiving RMI and those benefiting from CMU complémentaire are also exempt from contributions.

You have a contribution to pay if the revenu fiscal de référence of your tax foyer is greater than 7 083 € ; in this case, the contribution payable is equal to 8 % of the amount of your revenu fiscal which exceeds this platform.

Declaration of resources
At the time of your request for basic CMU, you must fill a declaration of resources and attach the following supporting documents:
- Last tax advice (taxed or not taxed);
- Pay slip;
- Payment advice from ASSEDIC;
- Advice from CNAV and the supplementary pension organization from the tax declaration;
- Notification of payment of a disabilty pension;
- Your CIF allocation number;
- Documents as proof of income earned from abroad.

I have just received my CMU application form today.  Apart from the usual name, address, etc under financial resources, it asks for my RFR.  It states that if I provide this, then I need complete no further details of my income - just sign the form and return it with a copy of my last year's tax advice.  However, there's also an additional form which looks like the resource declaration mentioned above. 

The Ameli website was updated on 2 October 2006 and I believe, from memory, that the bit about the resource declaration (particularly the foreign income part) might not have been there before, so they may be intending to amend the terms.  I plan to pop into my CPAM next week to discuss the forms, so we'll see what happens.

 

 

[LesLauriers]

SD - I asked Bastet for the specifics of the interest free account as I wanted to know wether the CPAM representative was implying that :

A. The legislation had changed from declaring your RFR to declaring your RFR plus interest on Livret As, Codevis, LEPs or Livret Jeunes.

or

B. Bastet had failed to declare interest from a UK tax free savings vehicle, such as an ISA or Tessa or a maturing endowment perhaps. Any of which should of course have been declared on a tax return and already be included in the RFR and therefore the CPAM representative was right to present a revised demand.

This could be narrowed down if Bastet would provide the details of the interest free accounts in question.

If the legislation has changed then it is a relatively small beer increase due to the limitations on tax free investments and the interest paid thereon - probably less than 94€ for a couple with the maximum investment next year.

Going back to the original thread of the posting, an Assurance Vie is not "tax free" but is "tax advantageous" and therefore should have no impact in these circumstances, the op's original calculations being correct.

Unless of course you find out differently next week!!!

The first person I saw insisted that the required payment was 8% of worldwide capital and I could do little to dissuade her of this so I made sure that I avoided her on my next visit!

[suein56]

[quote user="Leslauriers"].
The first person I saw insisted that the required payment was 8% of worldwide capital and I could do little to dissuade her of this so I made sure that I avoided her on my next visit!
[/quote]

Crikey, I don't blame you - it's all down to interpretation of the rules and that interpretation would have made us practically penniless in a very few years!

Sue  [blink]

 

[Bastet]

[quote user="Leslauriers"]SD - I asked Bastet for the specifics of the interest free account as I wanted to know wether the CPAM representative was implying that :

A. The legislation had changed from declaring your RFR to declaring your RFR plus interest on Livret As, Codevis, LEPs or Livret Jeunes. or
B. Bastet had failed to declare interest from a UK tax free savings vehicle, such as an ISA or Tessa or a maturing endowment perhaps. Any of which should of course have been declared on a tax return and already be included in the RFR and therefore the CPAM representative was right to present a revised demand.

This could be narrowed down if Bastet would provide the details of the interest free accounts in question.

If the legislation has changed then it is a relatively small beer increase due to the limitations on tax free investments and the interest paid thereon - probably less than 94€ for a couple with the maximum investment next year.
[/quote]

The accounts to which I was refering, and of which the CPAM chap took note, were our only savings accounts - all French - PEP, Livret Bleus, Livret Codevi, LEP, and he looked at, but I don't know what notes he made about, Prévi Options & Prévi Retraite. We each have one of each.   Hope that clarifies....

We have met an accountant who says he will sort it out - we'll be using their services anyway from next year for MOH's new business and when I said I thought we'd been overcharged, and provided him with copies of everything, he agreed.   I'm waiting to hear what they've heard back from CPAM.