Taking company pension early - info needed

[frenchdc]

Hi to all,

I am thinking about taking my UK company pension early. I am resident in France ( 57 years old ) and I want to know what my liability will be for tax, health and social charges on my monthly pension as well as the liability on taking a lump sum please. Any help greatly appreciated

[andyh4]

Your pension income is subject to income tax, health and social charges (unless you have an S1 issued from a country other than France - in which case you would be due for income tax only).

Your lump sum is also subject to income tax, but you have to option of declaring it separately at a 7.5% tax rate, rather than adding it on to your income for the year. Whether this is beneficial or not will depend on the amounts involved in your total income and the size of the lump sum.

It makes no difference to the French authorities whether you take this early or wait until your allotted pension age. However it may be that by waiting you will be issued with an S1 from the UK and this would then reduce the charges on your income.

[frenchdc]

thanks for reply.

No s1 I'm afraid but I was hoping to obtain percentages and thresholds involved so that I can calculate some actual figures please.

[parsnips]

[quote user="frenchdc"]Hi to all,

I am thinking about taking my UK company pension early. I am resident in France ( 57 years old ) and I want to know what my liability will be for tax, health and social charges on my monthly pension as well as the liability on taking a lump sum please. Any help greatly appreciated[/quote]

Hi,

      Any lump sum can be just added to your income on form 2042 box 1AS "pensions etc..." and it will be added to your taxable income and taxed at your marginal rate , or if you think that would be more than 7.5% you can declare at 2042 box 1AT  and have it taxed at flat rate 7.5%.    The pension (unless you have full private health insurance should be declared in the appropriate line  of section VIII on form 2047, for social charges.

    Your monthly pension must be declared at 2042 box  1AS and   2047 sec VIII.

[andyh4]

frenchdc wrote:

I was hoping to obtain percentages and thresholds involved so that I can calculate some actual figures please.

Thresholds depend on how many related people there are in the household and whether adolescents/young adults are in education. Basically the income tax is based on a tax free quantity (married couple is around €19k) and then goes up in stages - a bit like the UK system except that taxation is based on households and not individuals.

If you do a search on here I am sure you will find links to the current thresholds to allow an accurate calculation.