PENSION LUMP SUM tax declaration.

[bouliste]

Can anyone please clarify the position regarding the declaration (or not!) of pension lump sums received during the 2011 tax year.

My understanding ( according to the tax guide provided by 'The Connection' english paper) is that it is NOT neccessary to declare these sums as the French authorities have yet again delayed producing th  document to clarify whether or not these sums should be declared for taxation in France.

 Do we still have to inform the tax authorites that we have received a lump sum pension payment (and can someone tell me what the french is for 'lump sum' please!) even though we are not entering it on the tax forms? A couple of months ago the Connection suggested attaching a letter to the tax form to say that a lump sum had been received but was not being declared as it is protected under the UK-France double tax treaty. However in their April guide for the tax declaration they say there is no need to declare this sum as it comes under British pension law and is tax free in France if paid into a UK bank account. Confusing!

I would prefer if possible not to have to inform my local tax office about my lump sum payment - I had a 2 year running battle with them over my wife's teachers pension because they insisted she had to pay tax in France as well as the UK - I dread to think what they will make of this situation!

Any advice on this subject would be most helpful.       

 

[parsnips]

[quote user="bouliste"]

Can anyone please clarify the position regarding the declaration (or not!) of pension lump sums received during the 2011 tax year.

My understanding ( according to the tax guide provided by 'The Connection' english paper) is that it is NOT neccessary to declare these sums as the French authorities have yet again delayed producing th  document to clarify whether or not these sums should be declared for taxation in France.

 Do we still have to inform the tax authorites that we have received a lump sum pension payment (and can someone tell me what the french is for 'lump sum' please!) even though we are not entering it on the tax forms? A couple of months ago the Connection suggested attaching a letter to the tax form to say that a lump sum had been received but was not being declared as it is protected under the UK-France double tax treaty. However in their April guide for the tax declaration they say there is no need to declare this sum as it comes under British pension law and is tax free in France if paid into a UK bank account. Confusing!

I would prefer if possible not to have to inform my local tax office about my lump sum payment - I had a 2 year running battle with them over my wife's teachers pension because they insisted she had to pay tax in France as well as the UK - I dread to think what they will make of this situation!

Any advice on this subject would be most helpful.  

Hi,

 I posted this elsewhere:Hi,

I suggest those of you who read french look at the relevant sections of this new tax instruction,

http://www.impots.gouv.fr/portal/deploi ... e_7575.pdf

for those who don't, see here -it appears the "draft regs" have now

been incorporated in the instruction---" asked Siddalls for an update

and they respond:

Mid-way through last year, the French authorities

removed the 1/15th rule, and introduced revised draft legislation, where

the lump sum is taxable at 7.5% after the 10% abatement. You can choose

either to have the lump sum taxed fully as income, but ticking box

AT on page 3 of form 2042, is the declaration to have the lump sum taxed

at 7.5%. This is a special tax on pension lump sums.;

Technically

only 25% of the lump sum would be entered on this form (as this forms

the ‘lump sum’), as the remaining 75% is taxed as income in the UK and

should therefore be declared as income in France"

As to whether you tell the tax office , that's up to you: in the present confused state, and with a whole revamp of the system pending (thanks to Mr Hollande) it may well go unnoticed.

Also it doesn't do to accept anything you read in the Connexion , without checking it against other sources.

 

 

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