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Can they do this?


plod

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I suppose they can. In the past, as a British resident obliged by the nature of my employment when I worked in the UK to pay my taxes on my pension there, I declared in France but paid no tax here. This year I find I am paying income tax, not a huge amount but the principle seems wrong viz paying tax in the UK and again over here. I am not referring to the "prelevements sociaux" but impot sur le revenu. This happened to anybody else; has something changed that I missed?
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In France it will depend on your situation too won't it. You will always make up to the most tax you should pay between both countries.

Just watching french tv, I have seen that lots of people have had far bigger tax bills this year.

Have they deducted the amount already paid in the UK?? If so, then that is what is left to pay in France. You can work it out, by doing one of their 'calculez votre impot' and deducting the amount that you have already paid.

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Are you talking about a UK government service pension?  If so then it is not taxable in France but they tax it and then credit the amount of French tax.  If you declared in the same way as last year then there should be no change.  Would need a bit more explanation to advise properly.

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It is a government pension. There is a column headed "Credit d'impot sur rev etranger". There is an amount in this column preceded by a minus sign. It appears that this is the amount on which I am paying tax at 0,22 per cent. Am I paying my tax twice?
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Without seeing your detailed tax calculation then I cannot be sure.  But my guess is no, you are not.  It sounds like you have been awarded a credit equal to the amount of French tax charged on your UK govt pension, which is how it is supposed to be.  The net result is that you don't pay tax in France on this income but it is taken into account increasing the marginal rates of tax that you pay on income that is taxable in France.  It should have worked like that last year though.

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[quote user="plod"]It is a government pension. There is a column headed "Credit d'impot sur rev etranger". There is an amount in this column preceded by a minus sign. It appears that this is the amount on which I am paying tax at 0,22 per cent. Am I paying my tax twice?[/quote]

Hi,

 If you have any other income that you declare here, the  tax changes may have just brought you into the taxable range.  Your government pension , while not taxed here, is taken into account when calculating the tax due on things like bank interest dividends etc.    In other words the rate of tax you pay is calculated as if the pension were taxable .   This means a raised rate of tax on the french- taxable income.

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There has been no change in my pension receipts. My grumble is that I am paying tax in France now whereas in the past I paid none. There are two conclusions - either I am paying less tax in the UK and therefore paying some in France, or the French governments is taking money from me which it did not in the past. I suppose taxes are rarely seen as fair but there does seem an injustice in this.
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I have just got my tax bill through, and I too am on a UK service pension & have previously not had to pay tax here - I have no income here. My bill is for €93. Not a lot admittedly, however I am going to have to try to figure out how they come by this, then the task of trying to fight it. How can you have a tax bill here when you have no taxible income?
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I don't know about complicated pensions and which ones are taxable where.

However, and I am not sure that this could be the explanation even, could the better exchange rates last year have pushed you into a taxable band?

I calculate our income using actual rates, that is, on the day that the money comes in, and I notice surprisingly large variations month to month and even between different days in the same month.

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I refer to my earlier posts stating that I have found myself in the same position as plod this year. I emailed the local contact address on my tax form to question this tax. Two strange things I must observe - firstly that a company or body here actually had an email address, and more astonishingly - somebody actually responded - never mind the next working morning!!!!!!

Their initial response was that this tax related to income from last year. I replied that my circumstances were exactly the same last year. Today they have responded that it was a mistake, and they will refund this €93. I suggest that plod does likewise. In my mail I merely informed that I was questioning their demand, and asking them how this was calculated. I told them that my sole income was my UK government service pension, that this was taxed at source in the UK, and that this was the subject to the UK/ France double taxation agreement meaning that it was not subject to french tax.
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I am indebted to you, Louise and Gary, for your message to me. I had thought the thread had died a death. I have been in touch by e-mail with my local office and they appear to acknowledge my case. I say appear because in their reply they say: "Le principe de l'imposition de vos revenus perçus à l'etranger est correctement appliqué , cependant vous recevrez une imposition corrigée ultérieurement . "

Seems to be a sort of "we weren't wrong but we were wrong".

I wonder how long "ulterieurement" will be?

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  • 6 months later...
I did read the thread of this post, but thought as an ex UK government employee forced to pay tax in the UK, I would never pay tax on it in France. However, the recent changes alter this situation as our children leave home, the "parts" decrease and the derisory credit the French apply to my pension (less than a 10th of the amount I actually pay in the UK) means that I will pass the French first tax barrier. For those who can choose where to pay tax, its a good system, for those who cannot, it seems to be a change for the worse. Am I missing something?
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AFAIK nobody can 'choose' where to pay tax. HMRC, the fisc et al make the decisions.

Of course if you have a flexible lifestyle it makes sense to understand what criteria would make you taxable where, and it is sometimes possible to arrange your lifestyle in such a way as to sway the decision one way or the other.

For those that can't, unfortunately there will always be winners and losers, given that different countries have different systems.
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As I said before, one always makes up the tax owed to the country who wants the most. In our case we knew that for us, we would pay more tax in the UK. So at one point, we were paying non residents french tax (this far higher than usual french income tax) us being UK residents and then another lump to the HMRC, something I had budgeted for.

As french state pensioners on a french government pension, we now only pay income tax to the HMRC.

Please note that many many 'poor' french workers, Smicards, now have to pay some income tax, they have previously not paid any.  Such is the way of income tax, for us 'little' people unavoidable.

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[quote user="Lehaut"]I did read the thread of this post, but thought as an ex UK government employee forced to pay tax in the UK, I would never pay tax on it in France. However, the recent changes alter this situation as our children leave home, the "parts" decrease and the derisory credit the French apply to my pension (less than a 10th of the amount I actually pay in the UK) means that I will pass the French first tax barrier. For those who can choose where to pay tax, its a good system, for those who cannot, it seems to be a change for the worse. Am I missing something?[/quote]

Hi,

      Yes , you are missing something. 2 things in fact;    1. AFAIK no private individual can legally choose where he pays his taxes.

                                                                                  2.Any argument you have is with the UK tax regime; the "derisory" credit the french give on your UK govt. pension, is, in accordance with the treaty, to exempt it from the "derisory" amount of french tax which would otherwise be due.   There is , and never was , even under the "old" treaty, any mechanism for France to give a credit to mitigate your UK tax.

        If your UK tax is 10 times what the french tax would be ,and you think that is excessive, then that is a problem between you and the UK revenue and the rate at which they tax your pension  , and nothing to do with the french tax system.

        Your french tax has increased because , quite rightly , you no longer get an allowance for children you no longer have to support.                                                 

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[quote user="parsnips"] , quite rightly , you no longer get an allowance for children you no longer have to support.                                                 

[/quote]

Nowt to do with tax, but hands up all those who have managed to stop supporting their children at 18...or even 19, 20 or any number above that? Especially in the current economic climate?

In the UK, where there isn't any allowance as such in the first place, you can send your kids off the University at 18, when you are no longer even entitled to family allowance or whatever it's now called, and they're considered to be financially independent, yet the amount of student loan and living allowance they can receive is based.....on their parents' income.

Don't get me wrong, we've paid and are still paying, to a certain extent, to ensure our children are not getting into debt or financial difficulty. It's funny, though, that governments (certainly the UK one, anyway) have double standards when it comes to over-18's. If they do go on to further education, then the government is quite happy to base any assistance given on the parents' income until they leave at 22 or 23.

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[quote user="You can call me Betty"][quote user="parsnips"] , quite rightly , you no longer get an allowance for children you no longer have to support.                                                 

[/quote]

Nowt to do with tax, but hands up all those who have managed to stop supporting their children at 18...or even 19, 20 or any number above that? Especially in the current economic climate?

In the UK, where there isn't any allowance as such in the first place, you can send your kids off the University at 18, when you are no longer even entitled to family allowance or whatever it's now called, and they're considered to be financially independent, yet the amount of student loan and living allowance they can receive is based.....on their parents' income.

Don't get me wrong, we've paid and are still paying, to a certain extent, to ensure our children are not getting into debt or financial difficulty. It's funny, though, that governments (certainly the UK one, anyway) have double standards when it comes to over-18's. If they do go on to further education, then the government is quite happy to base any assistance given on the parents' income until they leave at 22 or 23.

[/quote]

Hi,

   If the OP thinks his children are still dependent on him, he can claim  allowances , or "attach" them to his foyer fiscal;  He should research this in the notice to form 2042.

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There is, of course, another explanation. If the pound vs the euro is stronger than in previous years it could look as though you are paid more money (in euros) than in the previous years. This could give rise to a tax demand in France. Just a thought off the top of my head.
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Perhaps I did not make myself clear in the OP. Its not an easy topic to express or understand.

If, as an individual with a taxable income, I choose to live in the UK, I pay UK tax. If I choose to live in France I pay French taxes, therefore by virtue of the choice I make where to live I choose where to pay my tax. However, as a person in receipt of a military pension and I choose to live in France, that choice of where I pay tax is denied me. In effect I pay over 10 times more income tax in the UK because of this rule than I would in France, if the pension was paid direct here. As it was my choice to live in France, I knew about this rule and accepted it. I declared my pension in France with the understanding that it would not form part of the formula of being subject to French income tax, as I had already paid tax on it in the UK.

Under the new system, the total amount of my pension appears on the Avis as subject to French income tax. Only a credit is given against the total amount of what I would have paid in France, not what I have actually paid in the UK. Plucking figures out of the air as an example, 200 euros credit to reduce my pension for the tax calculation is given in France as opposed to the £2000 I have actually paid in the UK. (Gross pension figures are supposed to be given on the returns). Thus when our "parts" reduce in the future when the children are no longer claimable, my pension will be subject to a second lot of tax as it will pass the French barrier. In simplistic terms I would have thought that his is being taxed twice on the same income.

I visited our local tax office after taking the advice of a friend who is a French accountant before the OP. I do claim for our two children, and can until age 25 if they continue with their education subject to earnings on paid work experience etc.
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"If, as an individual with a taxable income, I choose to live in the UK, I pay UK tax. If I choose to live in France I pay French taxes, therefore by virtue of the choice I make where to live I choose where to pay my tax. However, as a person in receipt of a military pension and I choose to live in France, that choice of where I pay tax is denied me."

That's not logical.

You choose what country you live in, and having made that choice, the rest is out of your hands. You are subject to all of the fiscal laws that apply to your situation, that have been decided between the governments of the countries involved.

Some will be to your advantage and some won't, but you can't cherry pick.

France would probably love to tax you on your UK government pension, but it has signed a treaty to agree that UK government pensions are taxed in the UK.

I don't understand why you think you're going to be taxed on it twice. To take your figures: if it hadn't been taxed in the UK, you would have paid 200€ tax on it in France. France has treated it as already taxed, ie as if they had billed you 200€ and you have already paid it. So what 'second lot of tax' are you expecting them to apply?

I agree it will be included in your RFR which may be reflected in your taxe d'habitation bill etc but that seems correct, since it is income that you have received. The RFR is not used in the tax calculation, if that's what you're worrying about; it doesn't automatically follow that if you 'pass the barrier' you get a tax bill. It depends what box the figures are in on the tax form.For instance if an AE pays income tax each month on their AE earnings, and these earnings give them an RFR that puts them in a taxable bracket according to their 'parts', they won't be billed for any more income tax because it has already been paid.
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Lehaut, we were in the same situation when we moved back to the UK. We knew that UK tax would be a lot more than french tax.

I do not understand what the impots are doing with your tax now. Seems odd to me and frankly I would be getting onto someone about it, because it seems to go against the basic tenets of the EU treaties. Contact an EU MP for example.

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I'm wondering about a pension income which incurs £2000.00 tax in the UK but only €200 in France.

Using the rates here for the UK tax http://www.hmrc.gov.uk/rates/it.htm

For 2012-13 income for the UK, basic rate is 20% and Personal Allowance is a minimum of £8,105.00, so £2000 tax represents a UK taxable pension income of at least £28,105.00.

And using the rates here for the French tax http://www.french-property.com/news/tax_france/income_tax_rates_2012/

For 2012 income the French tax on £28.105.00, say €33,780.00, would be €4450.25, say £3708.55.

EDIT : Apologies. The calculation for French tax is completely wrong, as it is for a single person.

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