1st time tax return calculation

[stan]

I have spent weeks on the net trying to find a definitive answer to several queries which I must find answers to prior to submitting our first tax return. I must say it is very confusing and wonder whether members of this forum can enlighten me.

Basically, it is only my wife and I in the household, resident here in France since May 2010. I am disabled and am paid DLA and Industrial Injuries Disablement benefit. My wife is paid Carers Allowance for me and we both have E121 forms. I am paid a UK government pension, at about 30K euros a year net (tax paid in UK)

Correct me if I am wrong in my calculations, but after adding all our income together, and allowing for the double taxation treaty conditions, does this mean I will have to pay tax at 30% on our disablement benefits? (assuming we have no other allowances to offset this amount), as my reading of this suggests that any of the lower rate tax bands are swallowed up by the double taxation system.

[parsnips]

[quote user="stan"]I have spent weeks on the net trying to find a definitive answer to several queries which I must find answers to prior to submitting our first tax return. I must say it is very confusing and wonder whether members of this forum can enlighten me.

Basically, it is only my wife and I in the household, resident here in France since May 2010. I am disabled and am paid DLA and Industrial Injuries Disablement benefit. My wife is paid Carers Allowance for me and we both have E121 forms. I am paid a UK government pension, at about 30K euros a year net (tax paid in UK)

Correct me if I am wrong in my calculations, but after adding all our income together, and allowing for the double taxation treaty conditions, does this mean I will have to pay tax at 30% on our disablement benefits? (assuming we have no other allowances to offset this amount), as my reading of this suggests that any of the lower rate tax bands are swallowed up by the double taxation system.

[/quote]

 Hi,

      Your DLA is taxable in France. Your Industrial Injuries benefit is treated as a "rente viagere accident du travail" and is not taxable , and need not be declared, as it is also exempt from social charges.Carer's allowance is taxable in the UK, so would appear to be taxable in France , so you should obtain form "France Individual " from HMRC to have it paid gross in the UK (but only if you have been told by DWP that you can continue to receive it in France).

       Your Government pension remains taxable only in the UK, although it has to be declared in France , but only to calculate your french tax rate --it will NOT be taxed here.

         In your first declaration you only have to declare income received after your arrival date, which you should note on the form, (you should by now also have obtained and completed Form P85 from HMRC,- enter the same date).

        The only french tax due will be on the DLA and Carers allowance, (and any bank interest ,dividends or similar).

         I don't know what your total income is, but as a guide you will pay no tax if those parts of your joint income add up to less than about €20700.

         For a more detailed estimate you can email me with full income details.

          When you have obtained your tax declaration forms in April, you can get advice on completing them here. 

[stan]

Thank you Parsnips, much obliged.

[jeremy1]

hi, you seem quite knowledgeable and i'm desparate to scratch someone else's brains apart from my own which seem deficient at the moment we've been resident here since nov 2010 i duly notified uk tax before we came and filled out relevant forms etc including writing a letter re double tax treaty etc because i have government pension - my state pension had been deferred for 2 years so duly told them i wished to take it from date of moving here 1/11/10 took lump sum then from it and was told as dates were same as receipt and moving to france i wouldn't have to pay tax on lump sum or government pension - ha ha - they duly taxed lump sum - come april new tax year - they started to tax government pension and said i would have to wait on return from french tax to prove i was resident in france to get refund on both pension and lump sum - i got my french tax certificate in september and hoped french would duly send english return to uk - tax people say they haven't received it and copy and tax certificate copy are not enough - yes they say i will get refund of both but what can i do to hurry the system along - i think 14/15 months is way to long or is this normal ?? should i fill out R43 and try that way - my state pension isn't being taxed just paid into bank in uk - any help or suggestions would be appreciated - thank you

[parsnips]

Hi(I got your email),

    It seems to me that what is happening is as follows;

    You have submitted the relevant forms , and the process can take a long time (delays are usually at UK end, where they will tell you they haven't received them, when in fact,they may have been received but not "registered", and till they are "registered " they are basically left in a big pile--I know, as this happened to me).

   In the meantime , as is normal , your state pension is paid gross, but your tax code on the government pension is adjusted (downwards) to, in effect, take the extra tax due because of the state pension from your government pension. As a result of this you now are paying tax on the government pension, possibly for the first time.However , unless the rules have changed, your government pension lump sum should have been tax-free; you should complain to the tax office about this.

  Once the paperwork has eventually been done you will get full refund of any overpayment. A friend of mine did download a duplicate set of "France Individual" forms and he was dealt with fairly quickly, but that may have been because his original forms had reached the top of the pile.

   You can take some comfort in the fact that you are not alone--there are whole forum threads full of complaints about the slowness of this system.