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Taxation on interest


Ruley

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When we move to France later this year, we will be under UK reitrement age, and do not intend to work. We will live off our savings for the next 3 years until our pensions kick in. My problem is that the interest we receive from investments will be less than 5000 euros a year...will I have to pay tax on that, and if not, how do I register with the French Social Security to qualify for health cover ?
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Can't answer the tax question but regarding health care you should contact the Inland Revenue Contributions Section at Newcastle and they should provide you with an E106 which will cover you for up to 2 years health cover in France based on the National Insurance you have paid whilst in England (you will still need a top-up policy in France but these aren't mind-bogglingly expensive). Whether you get the full two years cover depends on when you move over - as Newcastle give these things out on a January - December basis.

For example if you are cute enough to move over on 1st Jan 2005 you will be covered until 31st Dec 2006 (24 months), but if you move over in September they will only award E106 from September 2005 - 31 Dec 2006 (16 months).

In 2006 you can always work as an agricultural worker for 3+ weeks of the year thus earning yourself credit into the French health system for a further 2 years.

Penny
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Hi there Ruley. I was very interested in your post as my husband and I are thinking of doing a similar thing. We can take early retirement at 50 in three years' time. I've found a book published in 2003 to be very useful- Buying a House in France by Andre de Vries. In that he says that if your income is less than 7,250 you pay no income tax.
We are trying to decide which area of France to settle in as I can't take too much heat in summer and am allergic to wet winters. How well do you know France?
Zoe
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You are unlikely to pay income tax, but you will pay 10% social charges on all unearned income. The only tax free and social charge free savings accounts are Livret A (15300 max) and Codevi (4600 Max) per person. These pay 2.25%net. So if you have 5000 coming in, it will result in paying some social charges.
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Thanks to all who have responded so far, some useful things here. Does anyone have the answer to this one ? I will have to pay 10% social charges on interest earned gross in the
UK, but does this entitle me to join the French Healthcare system ?
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