Tax on UK ill health occupational pension.

[virged]

I am moving to France to work in August 06 - job, accomodation, etc all lined up. However, I receive an ill health pension from one of my previous employers due to an industrial accident at work, and some of it (but not all, due to enhancements) is taxable here in the UK. My question is, does anyone have any similar experience or knowledge of what the situation is in France with this? I will continue to be paid in the UK, basically a small sum each month for the rest of my life, and I assume I will continue to pay tax on it too. Will this cause any problems in France, will I have to pay any tax or social payments to France too? Will it effect my tax code (if such a thing exists) in France?

Please not that this is an occupational pension, I don't get any state benefits.

Also, what is the best way of getting this money regularly transferred to France? I will have to keep an account in the UK, but I have read that technically you should'nt have one in the UK if you are not a resident - although as I said I think I will be a UK tax payer. Is the best method through regular transfer via one of the brokerage companies? I have a couple of France bank accounts already; Credit Agricole and - no, the name of the other one escapes me, but I think it's local to the Loire Dept (42).

Help much appreciated, thanks in anticipation...........

[ali-cat]

Sorry for not trying to reply to this query sooner - but I'm not 100% sure if this is right.  I'm hoping it is - but if not, I'm hoping that someone will reply & let us both know!!

We recently had a discussion with advisors (Siddals) about our situation moving abroad.  My husband and I are both receiving medical retirement pensions from the Civil Service;  receive incapacity benefit; and would hope to receive some income from savings invested.  I have to admit that the information was coming to us thick and fast so I hope we picked this up correctly.  In our circumstances the Incapacity Benefit we receive (tax free) will use up our tax free allowance under the French system.  Our Civil Service pensions,  like all government pensions, will be taxed by the UK revenue at the standard rate (it may be that the rate would have been more favourable under the French tax bands?).  Due to the Double Taxation Treaty no further taxes will be due on the Civil Service pensions under the French system.  Any further income from investments however will be taxed under the French system probably within the 5.5% and 14% tax bands.

In your circumstances, if your pension is required to be taxed in the UK,  this is likely to continue and the Double Tax Treaty applies.

As for transfering funds - we have found that currency conversion through the banks is very expensive (exchange rates are derisory).  Foreign currency exchange brokers deal in very large volume and therefore can afford to work on very small margins hence their rates are very close to the standard exchange rates.  Not only can you transfer lump sums but you can arrange to have regular payments converted and transferred.  We also understand that you can 'buy ahead' even on regular income to take advantage of favourable exchange rates (or hedge against unfavourable rates).  One thing you (and we) would need to check is the possiblity of any charges from the receiving bank.

Hope this helps and apologies if any of the information is incorrect.  We were very happy with the service provided by the advisors who to their credit didn't try to sell us any unsuitable products. 

 

 

[cheminot]

I assume yours is not a civil service pension. That being so when you move to France it will be taxed in France as part of your overall income. Before you go you should contact the inland revenue and get a form P85 which will enable you to get your pension and any other UK income free of tax. They will of course notify the french tax authorities as well.

Your income tax bill will probably be less than the UK but there are health and social taxes to be considered as well.

A rough guide to this can be found on; www.frenchentree.com/france-tax-advice.

As regards transferring the money, probably the best way is to do a direct debit from your British bank account through a specialist currency transfer company to a French account. There are plenty of these about and you can check which one best suits you. They inevitably give a better exchange rate than the banks.

Hope this helps

cheminot

 

[Bassman]

[quote user="aliards"]

Sorry for not trying to reply to this query sooner - but I'm not 100% sure if this is right.  I'm hoping it is - but if not, I'm hoping that someone will reply & let us both know!!

We recently had a discussion with advisors (Siddals) about our situation moving abroad.  My husband and I are both receiving medical retirement pensions from the Civil Service;  receive incapacity benefit; and would hope to receive some income from savings invested.  I have to admit that the information was coming to us thick and fast so I hope we picked this up correctly.  In our circumstances the Incapacity Benefit we receive (tax free) will use up our tax free allowance under the French system.  Our Civil Service pensions,  like all government pensions, will be taxed by the UK revenue at the standard rate (it may be that the rate would have been more favourable under the French tax bands?).  Due to the Double Taxation Treaty no further taxes will be due on the Civil Service pensions under the French system.  Any further income from investments however will be taxed under the French system probably within the 5.5% and 14% tax bands.

In your circumstances, if your pension is required to be taxed in the UK,  this is likely to continue and the Double Tax Treaty applies.

As for transfering funds - we have found that currency conversion through the banks is very expensive (exchange rates are derisory).  Foreign currency exchange brokers deal in very large volume and therefore can afford to work on very small margins hence their rates are very close to the standard exchange rates.  Not only can you transfer lump sums but you can arrange to have regular payments converted and transferred.  We also understand that you can 'buy ahead' even on regular income to take advantage of favourable exchange rates (or hedge against unfavourable rates).  One thing you (and we) would need to check is the possiblity of any charges from the receiving bank.

Hope this helps and apologies if any of the information is incorrect.  We were very happy with the service provided by the advisors who to their credit didn't try to sell us any unsuitable products. 

 

 

[/quote]

 

Very useful thanks Ali [:)] as I am in exactly the same position receiving medical retirement pension from the Civil Service and  receive incapacity benefit and was wondering about that when we eventually move over full time [;-)]

[ali-cat]

Bassman,

If you haven't got the forms & details for transfering ICB etc. give me a shout & I'll let  try to help with anything else I can.

Ali.

[Bassman]

[quote user="aliards"]

Bassman,

If you haven't got the forms & details for transfering ICB etc. give me a shout & I'll let  try to help with anything else I can.

Ali.

[/quote]

 

Cheers Ali , It won't be for a few years yet  [:'(] not until Patti can retire.... unless we win the lottery (bit tricky as we don't do it [:-))])

[Beryl]

I have sent you a PM Virged