# Another couple of tax questions. Salaried income and annuities



## EuroTrash

I have a feeling that tax on annuities is a slippery question but since tax questions seem to be in the air, and since I am going to have to face up to it soon, I thought I would ask anyway.

This year for the first time I will declare a pathetically small annual annuity payment.
The annuity is a result of cashing in a self employed private pension plan that I paid into for many years. I took a lump sum in September 2019, which I am hoping France will not be interested in since I left France in February 2019 and was tax resident in the UK for 2019 and 2020, and starting in 2020 I now receive an annuity. Should this be classed as some kind of pension, since it is the direct result of having paid into a pension fund, or should it be classed as an investment since it's a financial product that I bought? The annuity was purchased from the same company that the pension plan was with, if that makes a difference (Phoenix Life).

Also this year for the first time I have salaried income from a "proper" job to declare. I assume I declare the "salaire net imposable" figure on the summary they sent me when I left. Is it really as simple as that?

I will in any case be going to the tax office in the near future (assuming one can) to hopefully have a chat with the nice man who has explained things to me in the past, but it would sound more intelligent if I can say "Can I check that I have understood this correctly?" rather than, "What have I got to do?"


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## Bevdeforges

I would assume that you had income taxes withheld from your pay for your "real job" so you may actually be square on the taxes due - so yes, just report the salaire net imposable figure - if that hasn't already been filled in on your electronic form for you. 

I don't know much about annuities, and a quick glance at the reference I just posted in the stickies doesn't seem to address the issue - but you may want to take a look at what I posted here: For the coming tax season...

or at the second reference. The Fisc seem to have posted a few new documents on their site in English that might help you.


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## Clic Clac

EuroTrash said:


> This year for the first time I will declare a pathetically small annual annuity payment.
> *The annuity is a result of cashing in a self employed private pension plan that I paid into for many years.* I took a lump sum in September 2019, which I am hoping France will not be interested in since I left France in February 2019 and was tax resident in the UK for 2019 and 2020, and starting in 2020 I now receive an annuity. Should this be classed as some kind of pension, since it is the direct result of having paid into a pension fund, or should it be classed as an investment since it's a financial product that I bought? The annuity was purchased from the same company that the pension plan was with, if that makes a difference (Phoenix Life).


It sounds like a pension, ET, especially as you took part as 'a lumper' and left the rest.
Have you still got the 'bumf' or annual statements from the fund when you were paying in?
These should be marked up as Phoenix Life _XYZ_ Pension Plan.

You can buy an annuity from the proceeds of any financial investment, but a pension plan has extra tax advantages and would usually be the first choice,
as 'the taxman' is making a contribution alongside yours every month.


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## suein56

I might need to revisit the decision I made a few years ago regarding treatment of a small UK sourced annuity payment in the light of Bev's notice above re Tax .. but at the time I read widely around the subject plus then consulted someone who was well-known for his deep knowledge of French tax as regards UK expats. He said to lump the annuity payments in with the UK pension payments as there was no direct equivalent in France. I agreed with him.
My motto became 'better to declare inexactly than not to declare at all'.


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## Crabtree

If it is regarded as a "pension" and is not a uk govt one then it should be paid free of tax in the UK and is taxable in France


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## EuroTrash

Bevdeforges said:


> I would assume that you had income taxes withheld from your pay for your "real job"


In fact no tax was withheld. I guess because it was a CDD for six months which would not on its own have reached the income tax threshold. But as you say, it may already be filled in online since it will have been reported by my employer.
Thanks.


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## EuroTrash

Crabtree said:


> If it is regarded as a "pension" and is not a uk govt one then it should be paid free of tax in the UK and is taxable in France


Well that was my question really - is an annuity regarded as a pension. 
From the various comments, it seems that it can be. Which is good news


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## Yours truly confused

Something for those Brits who are expecting a private pension, an AVC or opted out of SERPS, may find they cannot opt for annuity payments. Brexit again! Some providers are already informing their clients who live in Europe that they will have to take their pot as a lump sum as the “provider” does not have the necessary financial passports to sell an annuity to those based in Europe. OH has had letters from Scottish Widows and Standard Life telling him this. If you think this might effect you it might be time to ask your provider where you stand.


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## EuroTrash

Yours truly confused said:


> Brexit again! Some providers are already informing their clients who live in Europe that they will have to take their pot as a lump sum as the “provider” does not have the necessary financial passports to sell an annuity to those based in Europe. OH has had letters from Scottish Widows and Standard Life telling him this. If you think this might effect you it might be time to ask your provider where you stand.


That was exactly why I took mine earlier than I otherwise would have. I wasn't 100% sure I was going to stay in the UK and I had also heard that EU residents with UK pension funds might find their options restricted after Brexit, so it seemed a good idea to sort it all out while I was indisputably UK resident.


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## Clic Clac

EuroTrash said:


> Well that was my question really - is an annuity regarded as a pension.


It can be.
Have a look at your contract.
What we refer to as 'your pension' is the savings plan you pay into to get the cash for your annuity.

If you had just used 'ordinary savings' as opposed to an official pension scheme your annuity will be shown as a Purchased Life Annuity (PLA).

If it was purchased direct from your pension pot it will be shown as a 'Lifetime Annuity'.

Very subtle difference but they are taxed differently (in the UK).


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