Question on Pension lump sum payment

[nomoss]

Early this year I accepted an offer of a lump sum from a company in place of a very small annual pension, which equates to about €2,000 on the day it was paid.

I notice from this year's return that this seems to be taxable as a Pension de retraite versée en capital on the 2047, and boxes 1AT, 1BT on the 2042, taxed at a flat rate of 7,5%.

My question is, will the full amount of this lump sum be added to our taxable income for next year, and therefore increase our RFR by a similar amount?

This could push our RFR dangerously close to the limit for some exonerations, depending on the Sterling exchange rate this year.

[pomme]

I think it will be reduced by 10%.

But there is another option, the quotient which allows you to pay the tax on an exceptional amount over four years

see https://www.impots.gouv.fr/portail/particulier/pensions-de-retraite

[nomoss]

Many thanks, pomme.

I was about to look more thoroughly on the impots site, instead of fixing the new gate, but you have saved me the trouble. [:D]

However, a problem seems to be that there is no corresponding box 0XX to put the lump sum into on the 2047.

If I put it in "PENSIONS DE RETRAITE VERSÉES EN CAPITAL", I am told to put it into, or it will be automatically transferred to, box 1AT on the 2042, which will not give the result I want.

[pomme]

It is on p4 of the printed 2042 after 8UU

revenus exceptionnels ou différés à imposer suivant le système du quotient

[nomoss]

[quote user="pomme"]It is on p4 of the printed 2042 after 8UU

revenus exceptionnels ou différés à imposer suivant le système du quotient[/quote]

Thanks, but I pointed out that it is not on the 2047

[suein56]

Deleted

[pomme]

[quote user="nomoss"][quote user="pomme"]It is on p4 of the printed 2042 after 8UU

revenus exceptionnels ou différés à imposer suivant le système du quotient[/quote]

Thanks, but I pointed out that it is not on the 2047

[/quote]

nomoss: Why did you bother to say it wasn't on 2047 if you knew it was on 2042?

And if you had looked and knew it was on 2042, why didn't you just say you found it there and wondered whether to use it?

I think I'll try remember not to try to help you in the future.

[nomoss]

I assumed we both knew box 0XX is on the 2042 because your link

says so.

I tried to point out that there is no corresponding box on the

2047, and if one uses the only box which is available on there, the instructions for

this are to put the amount into the wrong box on the 2042.

I apologise for upsetting you.

 Please feel free to ignore any questions I ask in the future. I usually manage quite well on my own[:D]

[nomoss]

Could anyone else please tell me, without being so rude,

that if I wish my small pension lump sum from the UK to be taxed under the

“system de quotient”, I should enter its value in the box on form 2047 labelled

“Pension de retraite versée en capital”, and transfer it to box 0XX on form

2042?

 

I am unsure about this, as form 2047 indicates that amounts

entered in that box on 2047 should be transferred to box 1AT, which would

result in a different treatment of the income.

 

I am reluctant to not exactly follow the instructions on the

forms, as several years ago I transferred a figure to the wrong box, but it was

transferred to the correct box by whoever checked the return.

 

This resulted in my being taxed twice on the same amount, which

I did resolve by email, but I’d like to get it right the first time.

 

Is it possible that there is no box corresponding to box 0XX

on the 2047 because the “system de quotient” is not available for foreign

income?

 

Please excuse me if I seem dumb, but I am an engineer, not

an accountant.

 

[Hereford]

I put an amount (a couple of years ago when I "cashed in" a very small pension pot) in a box on 2042 that says taxed at 7.5%.  Worked a treat, in Uk part would have been tax free, the rest taxed normally but even though I paid 7.5% on it all is was less overall.

I will get my file out and tell you the box numbers used on 2047 and 2042 this afternoon.

I followed the advice of a "then poster" who had done it previously.

Don't remember anything about system de quotient?? Perhaps your lump sum is different?

Mrs H.

[suein56]

nomoss wrote : Could anyone else please tell me ..

In this circumstance perhaps you could send a pm request to Parsnips, who remains the fount of all knowledge as far as French income tax is concerned .. and this inspite of the Fisc's determined efforts to confuse us by changing rules and regs every year.

If not then perhaps a telephone call to your tax office - if it's a fairly big one, as ours is, as they really do know the whys and wherefores.

I have had very helpful advice by phone about a capital gain situation that was tying me in knots.

[nomoss]

Thanks Mrs H.

The system de quotient allows only 25% of the sum to be added to one's taxable income for the year in which a lump sum is received, in order not to increase it disproportionately for a one-off payment., which could affect allowances based on income.

This would be useful for me, as adding the whole amount, or even 90% of it after the normal allowance, to my RFR, could result in an increase in my local taxes of more than the lump sum.

Although only 25% is added to income, the tax and prélèvements sociaux due on this amount are multiplied by four, so the taxman doesn't lose out!

[nomoss]

Thanks Sue.

I am just in the process of sending an email with the query via my espace on the impots site[:D]

[Hereford]

Hi

Having read your reply I can now see your point about adding it to your RFR.

I put the amount (< 5K) in boxes 2BT (as second declarant) on both pink and blue forms. Tax at 7.5% worked correctly but you are right that the whole was added to our RFR.

Hope you can get the answer you want from Les Impots.

Mrs H.

[nomoss]

Thanks Mrs H

I'll post on here when I get their reply.

[Lizzie Mac]

Hi Nomoss, I find myself in a similar situation and wondered if you'd had a reply from the tax folks?  Thanks.

[nomoss]

Hi Lizzie Mac. I have sent you a PM, as I don't feel inclined to post any more information on this forum.

[Lizzie Mac]

Thank you.  I don't know where to find my PMs, can you give me some guidance please?

[nomoss]

Click on "France Forum" below the Search forum box near the top of the page.

Then, below the blue banner "Forum Groups", click on "Private Messages".

As far as I know, the forum system no longer sends emails advising that you have PMs, so you have to check now and then to see any new ones. That is also the reason I had to tell you on the forum that I sent a PM.

EDIT: Actually, I have not even received advice of your post above, almost an hour since you posted[:(]