Epargne populaire and Income tax revisited

[JohnRoss]

Went to the Post Office today and waved our Avis D'Impot at them as they had requested us so to do by a phone call some time ago. The lady looked at it, Avis D'Impots sur les Revenus de 2007, and asked to see the one for 2006 which, as luck would have it, we had with us as well. She took a photcopy of it, the amount was more than 732 euros, and a form for a Degrevement which I had claimed and brought the total below 732 euros. She then filled in a form for each of us, we both have an LEP, which we signed and she kept. On asking her if there was any problem she said no and that was it.

This raises some questions in my mind. Why did she look at the Avis for 2006 and not the one for 2007? Is the 732 euro tax paid limit per person per LEP account and does that mean that as we each have an LEP the tax paid limit would be 1464 Euros. Somewhat confused, nothing new there....................JR

PS She said we could not open an LLD each as we both had LEPs

[suein56]

[quote user="JohnRoss"]

Is the 732 euro tax paid limit per person per LEP account and does that mean that as we each have an LEP the tax paid limit would be 1464 Euros. Somewhat confused, nothing new there....................[/quote]

We wanted to open 2 X LEPs, as the tax our household paid was below the 732€ threshold this year on income for 2007, but we were refused as we had been given credits against the tax paid in the UK on our share dividends, which meant that the 'impot sur les revenues soumis au barème' value was over the limit. And the limit is 732€ for the household not per individual.

But, never mind, we opened 2 x LDDs instead!

Sue [:)]

[JohnRoss]

Even more confused now. If one person can have an LEP if they don't pay more than 732 euros income tax you would have thought that two people could have one each and pay up to twice the amount of tax for the household to be equal, weird, hardly equalité..................JR

PS and if it is right that she looked at the Avis for 2006 does that mean that next year we will have to close the LEPs as the Avis for 2007 was slightly more than the 732 euros?

[parsnips]

[quote user="JohnRoss"]

Even more confused now. If one person can have an LEP if they don't pay more than 732 euros income tax you would have thought that two people could have one each and pay up to twice the amount of tax for the household to be equal, weird, hardly equalité..................JR

PS and if it is right that she looked at the Avis for 2006 does that mean that next year we will have to close the LEPs as the Ais for 2007 was slightly more than the 732 euros?

[/quote]

Hi,

   You are not yet used to the fact that in france the taxable unit is the "foyer fiscal"- in your case the married couple. This has advantages(if one spouse has no income the foyer profits from double allowances) and disadvantages (as you have found).

  Yes--while you can hold the accounts this year, you should close them next year.

If your tax is only likely to be marginally over the limit you could reduce it for following years by having a little bit of gardening etc; done on the CESU.

[JohnRoss]

"The taxable unit is the foyer fiscal". Ok and I guess that is good for low single income families. But does anybody know why the lady at the Post Office bank wanted to see the 2006 Avis and not the one I have just paid i.e. for 2007, can this be right? Why are they working one year behind?......JR 

[parsnips]

[quote user="JohnRoss"]

"The taxable unit is the foyer fiscal". Ok and I guess that is good for low single income families. But does anybody know why the lady at the Post Office bank wanted to see the 2006 Avis and not the one I have just paid i.e. for 2007, can this be right? Why are they working one year behind?......JR 

[/quote]

Hi,

    The reason she wanted the avis paid 2007 (on income from 2006) is because for someone wanting to open an LEP in the first 3/4 of 2008 that  avis is the latest they will have andthe rules have to cover the whole calender year.

  

[Ron Avery]

[quote user="spg"]

We wanted to open 2 X LEPs, as the tax our household paid was below the 732€ threshold this year on income for 2007,Sue [:)]

[/quote]

So if you pay income tax in the UK as say former  teachers, civil servants etc, and only pay a small amount of tax in France, you can get an LEP account, as a low earner?  Sounds a bit strange to me , is it just based on tax paid or total income?

[BJSLIV]

I think the next part of Sue's post nmakes it clear that UK paid tax is taken into account

We wanted to open 2 X LEPs, as the tax our household paid was below the 732€ threshold this year on income for 2007,but we were refused as we had been given credits against the tax paid in the UK on our share dividends, which meant that the 'impot sur les revenues soumis au barème' value was over the limit.

[JohnRoss]

UK paid tax is taken into account  Hang on I have just looked at the Avis 2007, the one that the lady in the Post Office was not interested in looking at, and nowhere is there any indication of tax being paid on my teachers pension in the UK, so how would they know? There is a reference to it however on the Avis de Degrevement 2006 but not the Avis 2006 when they gave me some money back! Both Avis do show however the Taux Effective (Revenue Mondial) and the Revenue fiscal de reference which in one case are the same and nearly the same in the other case which I assume would indicate extra income not taxed in France but not the amount of UK tax paid. We opened the LEPs in 2004 and I assume, though I cannot remember, that they would have asked to see an Avis D'Impots then and nothing much has changed since! Madame at la Poste did not set on fire and say I would have to close the two LEPs however, just that there was no problem! Maybe someone senior has to look at it and decide.........................................JR  

[parsnips]

[quote user="JohnRoss"]

UK paid tax is taken into account  Hang on I have just looked at the Avis 2007, the one that the lady in the Post Office was not interested in looking at, and nowhere is there any indication of tax being paid on my teachers pension in the UK, so how would they know? There is a reference to it however on the Avis de Degrevement 2006 but not the Avis 2006 when they gave me some money back! Both Avis do show however the Taux Effective (Revenue Mondial) and the Revenue fiscal de reference which in one case are the same and nearly the same in the other case which I assume would indicate extra income not taxed in France but not the amount of UK tax paid. We opened the LEPs in 2004 and I assume, though I cannot remember, that they would have asked to see an Avis D'Impots then and nothing much has changed since! Madame at la Poste did not set on fire and say I would have to close the two LEPs however, just that there was no problem! Maybe someone senior has to look at it and decide.........................................JR  

[/quote]

  Hi again,

       Tax paid on your teachers pension is only indirectly taken into account in that the amount of your pension raises your % rate of tax and may cause you to pay over the tax ceiling for the LEP.The amount of tax paid in the UK does not interest them, they are only concerned by how much tax you would pay here if all your income was taxed here, under french rules. In my own case , although I pay over £2000 in the UK on my government pension , when calculating the theoretical tax due in France on my total global income, I end with a theoretic french tax due less than the LEP limit.

The relief given on dividends is more direct in that it is deducted from the tax due , and may be seen to reduce the tax due below the limit. As the LEP is intended for low INCOME families the TAX finally paid is taken only as a convenient indication of low income. There are in France many very rich french nationals who, as in the UK, manipulate all the various tax breaks so as to pay little or no tax, and  their tax paid figure is in no way an indication of low income.

[JohnRoss]

I understand what you are saying but the figure of 732 euros seems very specific. It seems unlikley that the lady at the Post Ofiice could determine the situation just glancing at the Avis so her reply of "No problem" must be somewhat in doubt. I guess the photocopies she took will be looked at someone else and we would hear in due course if there is a problem.........JR

[suein56]

[quote user="JohnRoss"]I guess the photocopies she took will be looked at someone else and we would hear in due course if there is a problem.........[/quote]

We live in dept 56, southern Brittany, but for our La Poste accounts our 'centre financier' is Rennes (35), capital of Brittany - all paperwork for example for opening an account is forwarded to them for verification.

Sue

[JohnRoss]

Yes indeed our local Post Office bank is in the town nearest to us in Deux Sevres but the account is held at Bordeaux so I imagine it all goes there. What really gets up my nose about the Post Office is about three times a year they ring you up to make an appointment to see the financial advisor. All they want to do is sell you insurance or some service or other so having got wise to that now we don't go unless we want to. Same thing happens if you transfer a wad of money in from the UK They ask you to make an appointment to see if you want help investing it, most pushy really annoys me!.............................JR

[JohnRoss]

Just to wind this up we have been summoned to the post Office to discuss our accounts as we have paid too much tax to continue with our Epargnes Populaire so it looks as if they have taken UK income tax into account so will have to switch our peanuts somewhere else!.............JR

[allanb]

[quote user="JohnRoss"]

What really gets up my nose about the Post Office is about three times a year they ring you up to make an appointment to see the financial advisor. All they want to do is sell you insurance or some service or other...[/quote]I agree with you.  But the Banque Postale is not the only bank that does that.