French Income Tax on 30k euros

[oldgit72]

I could probably find some sort of answer to this question by research but......if anyone can give an answer from personal experience, I would be grateful.

On an single income from a company pension of 20k euros pa and with a joint investment income of around 10k euros per annum, what would the approximate french tax bill/social security bill be for a married couple in their 50's?

Any replies appreciated. Thanks.

 

[goose]

think in the region of 48% tax.........

[Quillan]

A conflicting answer I am afraid.

A personal friend receives a simular amount by pension and they are around 58 years old. The pension is taxed in the Uk but 'delivered' to their French bank acount. They get a P60 every year from the inland revenue which they send a copy with their French tax form, they pay no tax in France. The P60 is also used for CPAM and they pay (after just completing this years CPAM form) just over 2,000€ for their health cover plus another 1,000€ for their top up insurance.

With your investment income it depends on your local French tax office and their interpretation of the regulations. I get the tax on the interest/dividends that I pay in the UK refunded in France and then taxed under the French system. I end up paying little or no tax on them under the French system. When we have discussed this before others on the foum get treeted iether thet same or completly differently. On my most recent French tax return they ignored my dividens completly even though I sent the tax slips in as normal.

Personally I have moved all my money to France now, I get a terrible rate of interest compaired to the UK but I am far better off from a tax point of view. This means for me personally that it balances out and at least I don't have the added expense of shufling money around and I have it all in one place.

[Mutts]

One of the advantages in France is that total income is used to calculate tax for the household and a married couple would constitute two "parts" (each qualifying for a tax free allowance).

So as a rule of thumb:

Gross income 30K = each part is taxed on 15K

0% under 4262

6.83% to 8382 = 281

19.14% to 14753 = 1219

28.26% on balanace = 70

Total tax = 1570 per "part"

Social charges = 10% income  (pensions and annuities are taxable after this deduction)

There are different rates for purchased annuities where only a percentage is subject to tax (dependant on the age at which the annuity was purchased); and deductions for pensions paid by former employers (10% and a further 20% subject to minimums/maximums).

PS - rates above are for 2003

[Teamedup]

About 10% for a couple's income tax if it is purely taxed in France.

Don't know about the SS charges or mutalist charges either.

 

Mutts, they don't split income like that. I don't work and my husband's salary is indicated under his name and then the calculations are done. It is further along the form that the 'parts' are taken into account. It would be very nice of us if we could split it and both get allowances, but we can't, it would also get our hefty tax bill down considerably.

[LesLauriers]

Using 2006 rates, assuming E106 in place, 1469€ in tax, 1100€ social charges on investment income.

Between E106 and E 121 an extra 1682€ basic health cover (plus mutuelle if desired) and (roughly) 1349€ social charges on pensions, of which 722€ can be offset against the following years return.

So a potential worst case of 5600€, the 2006 calculators are not available yet, so calculation is based on current info available.

[oldgit72]

Thanks everyone foir the responses. At around 5-6k euros tax and social/health charges that seems to be not unreasonable.  Regarding the position between E106 and E121, the charge for basic health cover would, I assume be the minumum required for a couple and that one would need to top this up either with additional private cover or with additional charges at point of use? Also, do the social charges cease once state retirement age is reached and does one accrue a French state pension as a result of contributions made into the system in addition to the UK state pension?

 

Thanks again

[P]

Our enquiries on a similar amount of pension and a slightly higher investment return have indicated that there would be very little tax on the pension and, by using an assurance vie the tax on investments would also be low.

There seems to be a couple of abatements on the pension and it is then split between the number in the household and the tax worked out on the total taxable figure divided by 2 (if there is just two of you). This obviously places it in a lower tax band and the tax is then multiplied by 2.

Overall the tax situation was far more advantageous than it would be in the UK[:D]

[LesLauriers]

[quote user="oldgit72"]

Thanks everyone foir the responses. At around 5-6k euros tax and social/health charges that seems to be not unreasonable.  Regarding the position between E106 and E121, the charge for basic health cover would, I assume be the minumum required for a couple and that one would need to top this up either with additional private cover or with additional charges at point of use?

Correct.

Also, do the social charges cease once state retirement age is reached

Only on Pension.

and does one accrue a French state pension as a result of contributions made into the system in addition to the UK state pension?

No.

 

[/quote]

[LesLauriers]

[quote user="P"]

Our enquiries on a similar amount of pension and a slightly higher investment return have indicated that there would be very little tax on the pension and, by using an assurance vie the tax on investments would also be low.

The percentage growth is applied to the amount withdrawn to arrive at the taxable figure which can then have tax and social charges applied at fixed or actual rates whichever is most beneficial. After 8 years you can withdraw 4600€ per person each year, tax and social charge free. This is generally much more tax efficient than non AV investments and of course the inheritance benefits are exceptional.

There seems to be a couple of abatements on the pension

The second abatement of 20% ends on Jan 1st 2006.

and it is then split between the number in the household and the tax worked out on the total taxable figure divided by 2 (if there is just two of you). This obviously places it in a lower tax band and the tax is then multiplied by 2.

Correct, this is taken into account in the figures I indicated.

Overall the tax situation was far more advantageous than it would be in the UK[:D]

This is generally the case on modest or medium incomes, higher incomes are more heavily taxed in France, especially for single persons.

[/quote]

[Debra]

.

[paw862]

If it is a Government Pension then you do not pay social charges only the health charges.

Paw

[Quillan]

To be honest I think the best thing you can do is go and see your local tax office. You will read lots of advice here but in the end it's really down to your local tax office and how they interpret the rules. My personal experience of the tax office was that the guy did not really know what he was talking about. He had a big book, about the size of a telephone directory. You asked him a question and he looked it up and gave you an answer. If the question was not in the book he phoned somebody, if he still didn't get a answer then he assumed you didn't pay tax on the item you had enquired about. It seemed to me that it depends on how much effort the guy puts in to finding out. If he said yes and you paid then it was incorrect it creates grief for him to get the money back. So rather than say yes they say no if they can't find out the answer. I guess like civil servants the world over it's anything for the easy life.

I still stick to my original statement in that if you do go you will be plesantly suprised. As for social charges etc they will follow on once you have delcaired for tax. It's then easy, you enter your name and address, attach a copy of your tax return and they work it out. Some people I know pay a couple of thousand and others pay none. But why this is I do not know.

[LesLauriers]

Quillan, is right, it is always worth a visit to your local tax office as the rules seem to be interpreted differently by different tax offices. You may find that, even within the same tax office, the rules depend upon to whom you speak and how close it is to lunch time! That said I have always found the tax offices to be helpful.

The figures I have given are for an occupational pension, as described by the original poster, I do not have a goverment pension so I cannot comment.

Debra, yes, the Social Charges are seperate to the "Health" charges.

[Teamedup]

oldgit72, unless you work or make voluntary contributions to the french pension system then you won't be paying in to it. Paying social security is only contributing towards health care and nothing else. Pensions are under another thing entirely. However, if you do work,then yes, you will be paying towards a french pension.

[oldgit72]

Leslauriers, just looked at the IT figure again and question whether the 1469 euros would be 'per part'  ie x2?

[LesLauriers]

No, you said that there were two of you, so the calculation was based on that and 1469€ is the total for the household.