Is the UK OAP paid gross or net to French residents?

[NormanH]

I know my OAP from the UK will be taxable in France, but when I receive it will it have already been taxed at source in the UK, or will I get the gross amount?

If it has already been taxed do I have to claim it back later?

Second question...if it starts on say the 15th November is that the date of the first payment, or the date from which I am entitled..i.e. I will be paid 4 weeks later from the 15th?

[Rabbie]

All UK OAP is paid gross as it is always less than the personal allowance. They adjust your tax code for other taxable income to allow for this. If you have any other UK taxable income contact  HMRC to make sure you get that gross since you aren't UK resident.

I am afraid I don't know the answer to your second question as I didn't apply for OAP until I was over 65

[NormanH]

Thanks for your very quick reply

Well in fact I have a small Government pension which is taxed in the UK (no option).

There is the thorny problem of double taxation which I understand from the French end, but I don't think that the OAP should be taken into account for the tax band in the UK, since it is not taxable there...

[Rabbie]

I have had discussions with HMRC about this. The OAP is part of your UK taxable income but is paid gross by the DWP who do not want the hassle of deducting tax in some cases but not in others. In practice the OAP uses up a largish part of your tax-free allowance.

[woolybanana]

It is paid in arrears, on a fixed date I think, so your first payment may not be a full month. It is there in the bumpf you received from the pensions people when they sent out the documentation telling you it had been granted.

[Patf]

When Eddie got the form to apply they asked if he wanted to be paid weekly or 4-weekly. I think it starts on the day of the week that you become eligible - I know mine is  paid on a different day from his.

[NormanH]

my problem is that quite a lot of the 'bumf' isn't there

For example nothing about in arrears. They also left out the S1 and lost my certificates...

[NormanH]

[quote user="Rabbie"]I have had discussions with HMRC about this. The OAP is part of your UK taxable income but is paid gross by the DWP who do not want the hassle of deducting tax in some cases but not in others. In practice the OAP uses up a largish part of your tax-free allowance.[/quote]

But if it isn't taxable in the UK how can it use up any of your allowance?

[Rabbie]

I obviously have not made myself clear. In the UK OAP is paid gross and is not part of the PAYE system. However you have to declare it to HMRC in your tax return where it is set against your  tax allowance and used to calculate your taxcode for PAYE on any other income you might have like occupational pensions and investment income.

[NormanH]

Yes I am sure that you are right [:(]

I wasn't doubting what you say...

I was just wondering why a sum that is taxable in another country than the UK  should enter into the calculation of the tax payable on another income that is taxable in the UK. It will mean I will have to pay quite a bit more tax on my occupational pension, elthough this will be a bit mitigated by the higher personal allowance after 65..

For that matter I don't understand why I am obliged to pay tax in the UK when I am a French resident and normally my income should all be taxable here, but I believe I will not win that argument with the IR [:P]

I am not even allowed to vote in the UK, and France pays everything except my pensions.

[Rabbie]

You need to excuse an old man who did not fully take on board your situation. Your UK government pension is a special case where the UK government tries to claw back some of the money. As you are not UK resident I think you will  find that your OAP will not affect the tax you are paying in the UK. Sorry about the confusion

 

[idun]

No S1 yet, and you haven't retired yet, well husband retired in January and the french 'may or may not ' issue an S1 in the not too distant future. I won't hold my breath.

 

You must tell HMRC that the only income you have is your small british pension and then you will not pay tax on that, as they will adjust your tax code. WELL it depends on how much you call small ofcourse. If it is below £9940 a year, then you will not pay tax after you are 65, the allowance for under 65's is £7475 per year.

I think you should get in touch with these people call or write.

HMRC Residency at PO Box 46, Fitz Roy House, Nottingham NG2 1BD (telephone 0845 070 0040 (00 44 0151 210 2222 if calling from outside the UK)).

[NormanH]

I have to say that you seem to always get the rough end of the stick.

What did you do in 'La Vie Antérieure' ....

C'est là que j'ai vécu dans les voluptés calmes,

Au milieu de l'azur, des vagues, des splendeurs

Et des esclaves nus, tout imprégnés d'odeurs,

Qui me rafraîchissaient le front avec des palmes,

Et dont l'unique soin était d'approfondir

Le secret douloureux qui me faisait languir.

I have just written to the tax people to claim my higher personal allowance, pointing out that the OAP will be taxable in France..

I have to say that between your advice and that of tinabee this Forum has been well worth the price of admission.

Many thanks to both of you 

[mint]

[quote user="NormanH"]I have to say that you seem to always get the rough end of the stick.
What did you do in 'La Vie Antérieure' ....

C'est là que j'ai vécu dans les voluptés calmes,
Au milieu de l'azur, des vagues, des splendeurs
Et des esclaves nus, tout imprégnés d'odeurs,
Qui me rafraîchissaient le front avec des palmes,
Et dont l'unique soin était d'approfondir
Le secret douloureux qui me faisait languir.


I have just written to the tax people to claim my higher personal allowance, pointing out that the OAP will be taxable in France..
I have to say that between your advice and that of tinabee this Forum has been well worth the price of admission.

Many thanks to both of you 
[/quote]

Poor old fella, I suppose you can always live in hope.  But, it sounds to me like you have a brilliant future behind you....

[allanb]

If you are resident in France the UK state OAP should be paid gross, because it is taxable only in France. This has nothing to do with UK allowances; it's determined by the tax treaty.

If UK tax has been deducted, you have the right to reclaim it from HMRC, but it's up to you to take the necessary steps.  The subject has been covered on this forum, several times.

[fluffy tree]

Although the OAP pension is paid to you tax free, HMRC are well aware that you are receiving it, and how much you are paid each year. It is taxable, and does form part of your taxable income, but it is paid directly to you without deduction of tax as the annual amount is always less than the personal tax free allowance.

If this is your only income you are not then troubled by HMRC (hooray!) - however, if you have any additonal pensions or earned income the fact that you have received the OAP pension without deduction of tax is taken into account - leaving only the balance of the annual personal tax free allowance available against this other income.

[idun]

Fluffy tree, surely that is not the case for non residents. I would hope that HMRC would only tax on the only taxable income in the UK and that is the pension other than the OAP.

Ofcourse everything will be declared in France, including any tax paid?

[fluffy tree]

Depends whether 'french residents' are actually non-resident in the UK for tax purposes - which is not always the case...

[Judith]

I've just been going through these hoops - too, with a very small govt pension ....  I've had several conversations with HMRC - including having to fill in a tax form for reclaiming tax etc, but if necessary, I should phone them .... you have to be persistent, and there is every chance you will have to talk to a technical advisor.  This may not be the best tel no for you, , but since they have centralised services during the last year, this is the one I spoke to within the last two weeks ....  0161 931 9070 - it's the self assessement help line, as I had been sent a form to fill in, but you may also find this is what you have to do ..... I also had a pension coding form when I first claimed, but that didn't get it all sorted out ...

pm me if needed.

[fluffy tree]

sadly Judith that's par for the course now...and the chances of speaking to someone who really understands the technicalities of residence and non-residence in the UK are slim - so phonecalls to the SA Helpline can be lengthy and frustrating - it's worth trying the HMRC website for guidance.

[NormanH]

Thanks all.

Seems as each of us gets to this point it hits home and with aging brain cells needs explaining more than once

[Gardian]

[quote user="fluffy tree"]Although the OAP pension is paid to you tax free, HMRC are well aware that you are receiving it, and how much you are paid each year. It is taxable, and does form part of your taxable income, but it is paid directly to you without deduction of tax as the annual amount is always less than the personal tax free allowance. If this is your only income you are not then troubled by HMRC (hooray!) - however, if you have any additonal pensions or earned income the fact that you have received the OAP pension without deduction of tax is taken into account - leaving only the balance of the annual personal tax free allowance available against this other income.[/quote]

This is getting a bit manic!

FT's post above conveys precisely the situation as I have always understood it. That is to say that if you have a UK taxable occupational pension (Govt employee etc), then you fall under the UK tax regime. No debate. When your UK State pension kicks in, then whilst they say that it's not taxable, your total earnings become liable as described above.

Then ........... you make a French declaration as has been described at length on here on many occasions (with varying outcomes!!!) 

As FT says, the DWP notifies HMRC of the precise State pension figure that you will receive and adjusts (if necessary) your coding. It is of course incumbent on the individual to check those figures.

[NormanH]

"f you have a UK taxable occupational pension (Govt employee etc), then you fall under the UK tax regime. No debate."

Why no debate ?

I live in France, my worldwide income is subject to French Tax, and I have no vote in the UK,

Why should I pay tax in the UK as a French resident? It is only because the UK system is PAYE that the IR can steal directly from me.

In a civilised system such as in France I would receive my Pensions gross, declare them and then pay the bill, negotiating if possible,

PAYE is simply British bullying by the IR

[EmilyA]

I have done this and OH is in the process. You do not pay tax on your state pension in the UK, nor should it affect your tax code there. You pay tax in the UK on your government pension and tax in France on the state pension. OH (who does not have a government pension) has just received the letter about tax on his state pension which starts in November, he rang and explained that he paid tax in France and they said fine, you will keep your NT code. I have a government pension, before I reached 60 I rang and explained that I would be taxed on the state pension in France. That all went smoothly until April when a glitch in the system meant that they tried to take more tax for the state pension from my government pension. I rang, they apologised and amended the tax code again. No problems since then!

[NormanH]

Thanks EmilyA

That is how I believed it would be.

Thanks also to Judith