# Tax rates France?



## Secondtimeround

What are the tax bands and rates for uk gov pension, uk state pension and uk rental income? I’ve found the information online.


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## EuroTrash

Presumably you have moved to France, or are planning to?
UK state pension is taxable in France.
UK rental income and (most) UK gov pensions remain taxable in the UK even when you live in France. You declare them and pay tax on them in the UK, then you also declare them in France as part of your worldwide income and the DTA is applied, so you don't end up paying two separate lots of tax on the same chunk of income.
There aren't different tax bands for different sources of income as such, the thresholds apply to your total taxable household income, but there are various allowances.and abattements.


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## Crabtree

Basically you will get an allowance in France to offset the tax paid in the UK on your UK govt pension and UK rental income.This allowance is equivalent to the amount of tax that you would have paid in France if the French govt were taxing it
The UK state pension has to be taxed in France and subject to CSG according to the Anglo French tax agreement It should be paid tax free by the UK and declared in France.To get it tax free there is a form that you can print off from the HMRC website you take it to your local french tax office who will arrange for it to be stamped etc .
You must declare all your world wide income in France as well as bank accounts.As a general rule us mere mortals do not get taxed twice but depending on your income and the exchange rate there is a possibility that a high income person would 
As ET has said the French tax system is different to the UK as it is calculated on household income rather than individual incomes and is dependent on the number of people in the house as well as other reliefs so it really is difficult to say how much tax you would pay in France compared to the UK


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## Nomoss

Most of your answers can be found *HERE*


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## ccm47

The way it works is that:
1. You notify HMRC that you are living abroad and wish to be taxed there. Form P85.
2. Your personal tax code is issued.
3. Your state pension is paid gross to a bank of your choice in whichever country you choose, but you notify the French authorities when it comes to filling in you tax forms. The benefit of having it paid in the UK is that your bank account is not treated as being dormant and that you can choose the best time to transfer funds. The benefit of having it paid directly to France is that you can provide proof of some income to whoever might need it such as landlords/ banks/credit card providers etc.
4. The UK government pension is taxable in the UK according to your tax code as is your rental income. You notify the French authorities of this too so that you aren't taxed twice on the same money. If you have overpaid the French will tell you but it is now your job to get HMRC to refund you.
You will get more of your money than if you remained in the UK because the whole of your state pension is ignored in the UK, and basic rate of French tax is 11%, not 20%. There are also different tax bands, allowances for age and you are treated as a household not as an individual.
Hope that helps.


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## Bevdeforges

This guide hasn't been updated in a while, but I would try to stick to French government issued material.


https://www.impots.gouv.fr/portail/files/media/1_metier/5_international/french_tax_system.pdf?l=en


One issue to remember is that French tax law (including the forms and all) change constantly. The French government publication gives you a good overview of how taxes in general are calculated - but you need to adjust for current developments and rates. They just recently published the allegedly "final" rules and changes for the 2021 tax year - at the end of December, 2021 - and there have been a couple of years when the final tax regulations weren't done until January or so of the following year.

But as ccm47 points out, you need to coordinate from both sides - the UK and France - since in practice each side's requirements are pretty much independent of each other so you have to know what notifications to give the UK and where specific items go on the French forms. It's tricky the first time around, but gets easier from that point forward.


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## EuroTrash

ccm47 said:


> 1. You notify HMRC that you are living abroad and wish to be taxed there. Form P85.


Well, you notify the details of having moved abroad to HMRC but I don't think they give two figs where you wish or don't wish to be taxed. That is all defined by the France-UK tax agreement.



ccm47 said:


> If you have overpaid the French will tell you but it is now your job to get HMRC to refund you


I don't follow this bit? As I understood it - it may transpire that HMRC has taxed you at a higher rate compared to what France would have taxed you had your tax liability on that income been in France. But that doesn't mean you've overpaid. If you've paid the correct tax as per HMRC's rules, HMRC won't refund anything.,
Which basically means that when income is declared in two countries and dealt with under the DTA, you generally end up paying tax at whichever country's rate is the higher. If the tax on that income in your country of residence would have been less than what you paid, you don't get any back. If the tax on that income in your country of residence would have been more, you pay the extra.
You would only claim a refund where tax has actually been paid in the wrong country as per the DTA,, for example if HMRC continues to tax you at source after you leave the UK, on income that becomes taxable in France and not the UK as from the date your residence changes.
Maybe I have misunderstood?


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## Crabtree

There are a number of points here that need clarification
1.You are not taxed at whichever rate is the higher.You are taxed in the country where you are resident. The Anglo French tax agreement lays out who has first dibs at taxing you on certain income so a UK government pension and UK rental income are initially taxed in the UK.You then declare this in France and you get a tax credit equivalent to the amount that you would have paid in France which in practice means you are not taxed twice but it is always possible that some people may have to pay tax in France dependant on the amount they get in the UK and the exchange rate but this happens so rarely for us little people that it does not matter in practice
2.The P85 form only relates to informing the HMRC that you are moving abroad so they can calculate whether or not you have overpaid tax It is not the tax agreement form that gets a UK state pension paid free of tax as this has to have an official french stamp to show that you are resident in France and subject to the AF tax agreement
3.Many UK banks and credit card firms are closing EU resident accounts in the UK due to financial passporting rules and the now current difficulty of getting redress should the account go overdrawn or a credit card is not paid as post Brexit debts can no longer be enforced
4.There are now charges for transferring money into a SEPA account from the UK People should be looking at multi currency accounts such as WISE to avoid these charges
5 ..It is highly unlikely that the French tax authorities will tell you if you have overpaid tax in the UK It is up to the individual to ensure that their tax affairs are properly sorted.The french tax people are generally really helpful in explaining the tax treaty and how to fill in the french tax form so you get it right and as ccm47 points out if you are getting both a UK govt pension and the state pension you are better off getting them taxed in the correct jurisdictions


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## EuroTrash

Crabtree said:


> There are a number of points here that need clarification
> 1.You are not taxed at whichever rate is the higher.You are taxed in the country where you are resident. The Anglo French tax agreement lays out who has first dibs at taxing you on certain income so a UK government pension and UK rental income are initially taxed in the UK.You then declare this in France and you get a tax credit equivalent to the amount that you would have paid in France which in practice means you are not taxed twice but it is always possible that some people may have to pay tax in France dependant on the amount they get in the UK and the exchange rate but this happens so rarely for us little people that it does not matter in practice


Doesn't this in effect mean, though, that you always end up paying the higher of the two rates?
If you live in France and have income that's taxable in Country A, you pay the Country A rate of tax on that income. If the Country A rate is higher, you get a tax credit equivalent to the French rate of tax but the difference,that you have paid over and above that, you don't get back, so in effect you've paid the higher rate.
If the difference is in the other direction, you will pay a bit more to make it up to the French tax level, so again, in effect you have paid the higher rate.
That is how I've always regarded it, but I would be very happy to have the flaw in the logic pointed out. It would be nice to think that the taxman doesn't always win.


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## Yours truly confused

My experience thus far is that I started receiving my NHS pension in June 2020. I filled in the appropriate form, P85 ?, took it to my local impots office here for them to stamp and sign saying I am tax resident here in France. I then sent this form to HMRC who gave me the NT tax code (no tax). My pension is paid direct to my French bank gross and I now declare this on my French tax form. I do not pay any tax in the U.K. I also received a lump sum from a SERPS investment, emergency tax was taken at the time of payment but HMRC have since paid that back to me.


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## Bevdeforges

EuroTrash said:


> Doesn't this in effect mean, though, that you always end up paying the higher of the two rates?
> If you live in France and have income that's taxable in Country A, you pay the Country A rate of tax on that income.


That is true only in very rough terms. Because of the way that the French tax credit is calculated you may wind up paying something in both countries, since France takes no note of what you did (or didn't) pay in whatever country you paid any other taxes in. The credit they grant you is simply a portion of your overall taxes paid. 

Simple example - assume your declared income puts you right at the top of your tax bracket and it's only the Country A income (from whatever source) that puts you into the next higher bracket. Just for simplicity's sake, let's say your French income puts you at the limit of the 11% bracket and it's your Country A income that tips you into the 30% bracket. Some folks would consider that the French tax on that Country A income was at the 30% rate. But for the tax credit, your credit will be averaged out over the whole amount of your income - so if that Country A income is 10,000€.

The calculated tax on 36,070 € of income turns out to be 4743 € (because there is a 0 % bracket of 10,225€, and then up to 26,070€ you're taxed 11% - the 10,000 € over and above the 11% bracket costs you 3,000€ in tax at the 30% rate). Your effective rate of tax is now 13,15% so your tax credit at "French rates" is 13.15% of 4743 = 624€ no matter how much tax you paid (or didn't) to Country A.


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## ccm47

Just to add to the confusion NHS pensions are not all treated as being government pensions: some are, some aren't. One where the pensioner e.g.Yourstrulyconfused, has a UK NT code is not.

A "true" government pension when paid abroad to somebody is paid with UK tax deducted under a tax code ending in L. For basic rate tax payers that code is currently 1257L equating to the £12570 threshold. Anything over that is taxed. The thinking being that tax is properly due in the country where it is earned and DTA or not the govt is not going to allow its very own pensioners to pay that tax to a foreign government.

My apologies to ET for using the word "wish" in my earlier posting but few people contact HMRC, or any other government department, and say "I need" even if that is the legal necessity.
I was also very careful to use the word "dormant" when referring to putting money into bank accounts in my post. Dormant accounts can be closed by a bank even if the account holder is resident in the UK, simply because the money is not being "used". Not all organisations which act as banks e.g. building societies are taking steps to exclude long time customers simply because they are now resident in the EU.


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