Tax on UK pension

[chenauds]

Not sure if this is the right sub heading for my query - but here goes in any case!

My wife and I have been in France for 6 years now, 5 years ago we both

qualified for state pension with no problems howevrv, my wife had taken

a work related pension earlier and so started paying tax on it in the

UK.

When we moved to France we had numerous dealings with the faceless ones at the IR and ended up in the usual unhelpful loop.

As we are now permanent residents of France we declared and paid tax on

ALL of our income including my wifes small work related one and our

local tax office assures us that this is what we must do and that we

must pay tax in France on ALL income. The UK IR people seem to think

otherwise and after 6 years, tax i9s still being deducted at source in

the UK. I must say that our dealings with the Bureau D'Impots has been

both understanding , patient and helpful in guiding and explaining what

we do or do not have to pay to the extent of rechequing our last year

return and sending us a rebate of 250Euros as we had over declared.

Is this double taxation right and if not how do we get back the money which we will have overpaid to the UK IR?

[Benjamin]

chenauds

I'm not too certain from your posting how long you have been tax resident in France but I suggest you initially telephone HM Revenue & Customs Centre for Non-Residents in Nottingham 0044 115 974 2080 Monday to Friday 07.30 to 17.00.

Explain your situation and ask for a form FD5 to be sent to you. Completing this and forwarding it back to Nottingham through your local French tax office will then enable Nottingham to authorise the people who pay your wife's work related pension to pay it without deduction of UK income tax (that is assuming it's not a pension paid by the UK government ie teacher, police etc).

Depending on how long you have been tax resident in France you may be able to get a repayment of tax paid on your wife's works pension from previous years.

You can download this form from the internet but you may find it beneficial to actually speak to someone in Nottingham.

Benjamin

[Gastines]

Benjamin, why don't you work at UK.In Rev then we might get some sense out of them. Having 20% tax deducted on UK investment interest I have been trying for some time to get this sorted. Last week they sent me the form,to our home here in France,same address they've sent post to for 4 years,on the top of the form.For UK residents.Yes,they do know we are tax residents here and yes they've had the forms back.TWICE, from the H.d Impots saying it's declared here. You never seem to be able to deal with the same person twice,they are either on a course,ill or have left.

Perhaps it's because they owe us money?

Regards.

[Cassis]

Gastines, is it a form R43 you are after, to reclaim tax paid in the UK in order to avoid double taxation?

[Cassis]

If so, here's a link to the R43 online.

http://www.hmrc.gov.uk/cnr/r43-2006-notes.pdf

The IR do loads of forms online.  If this is not what you are after this link may help find the right one:

http://www.hmrc.gov.uk/cnr/allow_nonres.htm

Phil

[Poppy]

Sorry [:$] Was going to repeat something already said [blink]

[Benjamin]

Gastines

I'm not sure what you mean by investment interest. If you are refering to Building Society or similar interest then HM Revenue & Customs cannot instruct a Building Society to pay gross interest.

It is up to you to complete an application, normally provided by your Building Society on request, to be paid interest gross.

However, not all Building Societies provide this facility and most Building Societies in the UK will close your account and return the funds to the account where they originally emanated from if you give an address outside of the UK.

Beware!

Benjamin

[Ron Avery]

Just to add to what Benjamin has said which is 100% correct,  many UK finance institutions will not pay interest gross to residents abroad, so it is necessary to reclaim it each year via an FD 5 in the same way that you had to,  to get back any income tax paid in the UK after you left and became tax resident in France, which after reading the first poster, you may think is optional, well it isn't!!  If you come here to live here you are tax resident from Day 2.  There is however another legitimate way of getting back tax paid on interest paid in the UK on savings if you do not have any significant other UK income, and the total plus your savings interest is below your UK free pay amount,  which you are still entitled to.  You simply complete a UK Self assessment form on line and you get the tax paid back by return. This is the recommended method by the IR Bootle tax office that deals with non-residents tax affairs.

[Cassis]

The FD5 asks a UK based investment body to pay interest gross and to reclaim tax already paid in the UK.  It is not suitable for all investment types, such as equity based ones, as they can't be paid interest gross.  It's okay for most simple interest bearing accounts, though.

For equity based investments you use the R43 to reclaim tax, which I posted a link to.  Or you can, as Ron says, fill in a self assessment form.

[Gastines]

I may add that I think I have filled in so many F's and R' forms that I don't know my A from E! I was on the self assesment scheme. Used to complete the forms,as sent to me by the UK In.Rev, then was informed that I shouldn't really be submitting them? I did point out that they sent them. I now await the latest forms! To Benjamin, Yes ,I am aware that Buliding Soc. deal with it from their end. The Halifax and Scot.Prov both managed to send forms here to France that apply to UK res only!!

Still trying.

Regards.

[Ron Avery]

Gastines

I don't understand your posting, if you are sent a UK self assessment form you have to fill it in or get fined £100. Who told you not to complete them?   Many people living in France get them because in the UK they had higher tax rate income or investments or clains against tax,  it takes a couple of years before they stop sending them, but you do have to return them if sent. However, if you get any UK generated income, you can submit a self assessment even if you don't get sent one, and if you have a UK private pension taxed in France, you do not have to declare it to the UK as it is dealt with under the double taxation treaty.  That is what makes the reclaiming of tax paid on UK savings so easy, unless you have a massive fortune salted away your interest income is not going to be more than your free pay so the tax paid just comes back to you.  The only minor problem in the scheme of things is that you have to ask your bank or building ociety for two tax certificates, one for the UK financial year,  the other for French financial year.  But this has never been a problem for any I have dealt with in the past.

[allanb]

I don't know if I can help with your particular question, but here is one basic principle that may clarify it a bit:

Depending on

your country of residence, the tax treaty between France and the UK specifies, for each kind of income, whether

France or the UK has the right to tax it.  For example, if you are

resident in France and receive the UK state retirement pension, it is

taxable in France, not in the UK (and the UK should pay it without any

tax deduction.)

However, even income that is not taxable

in France must be reported on your French tax return.  It goes

into a section called "revenus exonérés", and it is included in your

total income in order to determine what rate of tax applies to the

income that is taxable in France.  So, even though it isn't

directly taxable here, it may cause you to pay a bit more tax in the

end.   

I believe that some kinds of pension fall into this category, although not the state retirement pension.

[Gastines]

I think my answer to the helpful replies given is,Yes,Yes and I know and Done it.

Declared All my income from UK on my French tax return, had the forms stamped and sent to UK TWICE. Have written toLong benton and virtually every other tax/ins office in the UK and I'm still awaiting the outcome.Dare I say it,the final outcome. I do know about the required steps re getting interest paid gross,if it suits them. An example of the efficiency of some of the people you have to deal with.Phoned Scot Prov. Now resident in France ,please send form re tax."You contact Inl.Rev" Inl.Rev,"No you contact Scot Prov and they send you a form but they are not required to pay you gross" Back to Scot Prov," Form please" 5 weeks later form for UK residents!!

I am quite convinced they are trying to kill me through stress or get me commited before I get my pension. At the moment I think they are winning.

I will add that this year alone ,we have had £50 X 2 and one payment of £150 from Halifax for mistakes and inefficiency. My ploy nowis that if they waste my time/phone calls/postage etc I send them a bill. Nat west offered £15 for a recent c---up. I sent them a bill for £150.It was paid into my account the same day.

Regards.