PDN

Try as I might I can't get my brain around the tax situation with regard to pension. In the UK you get an increased allowance (around £9000 I think) plus after retirement age you don't pay NI.
I read about social taxes and income tax in France but can't find out how they apply and if they're different for pensioners.
So specifically

What income are you allowed as a pension before you're liable for income tax?

If, as a pensioner, you have income UK property rental as well as the pensions is that treated differently - I thinking of social taxes here.

If, as a pensioner, you generate a small additional income as a freelance, is that regarded as running a business as an auto entrepreneur with all the tax and social tax implications.


You can tell I really don't understand

Any info gratefully received

Novocastrian

Welcome aboard! I can't provide the information you want but there are others here who can and will.

cjm

Hi PDN, I don't have a definitive answer, just some comments.
If you are a resident of France you are subject to their tax laws. All income is declarable, worldwide if you like, so rental income from UK property is declarable. UK state pension is part of the mix, as is a private pension. I don't have a link to direct you. Can I suggest you contact HMRI who will advise you.
Generating added income would also be declarable, as in the UK, but the WWW maybe a route you are considering, so declaration will be down to you ...
As the sage Novocastrian suggests others will bring more information.

Novocastrian

Finally! Due recognition.

cyrian

Hi
There is lots of UK government information online.
Try here for example http://www.dwp.gov.uk/international/...other-country/
As far as I am aware, you can receive your State Pension free of UK income tax but Government pensions i.e. firemen, police & Civil Service must be taxed in the UK.
If you choose to have money taxed in France then you will be liable to pay cotisations (NI) on it.
As stated, you must declare all income but the dual taxation treaty means that you will not be taxed twice.
Property rental income (UK) is taxed in the UK.
You will be covered for around 2 years healthcare in France because of your NI record in the UK but will not be covered after this until one of you receives the UK State Pension. In addition, you should have a Mutuelle health insurance to complement the french state system.
In France the income tax is household income.
Therefore, if you are married then you have 2 allowances against income.
You can search the forum for previous threads ( top right corner of France forum index page).
If you work at all in France then you either have to be employed or be registered as a business. Search for that also - lots of discussions.
Remember also that inheritance law is very different in France and need to plan for this especially if you are buying a property. (another search).
Good luck

Garonne

Just to add, you can't choose where you are taxed. If you are a French resident you have to declare your worldwide income in France.

As cyrian says any 'freelance work' needs to have French cotisations paid on it so you would have to set yourself up a business under the AE scheme if you were to do this as a French resident.

Garonne

To the OP - don't even begin to compare the French tax system with the UK!! They are worlds apart and there are no 'allowances' as such for pensioners, it's as previously stated, household income in total regardless of age.

EuroTrash

This has confused me. Tax is a separate issue from cotisations.

If you're on an S1 you wouldn't be paying any cotisations regardless of where your income is taxed, because you are in the French health system via your S1, so no further cotisations are due. However if you are on an S1 then it means you live in France, therefore as Garonne says you must declare your worldwide income in France.

You would only be charged cotisations on income from outside France if you have been accepted onto CMU on the basis of your income and droit de sejour.

You may however be liable to pay contributions sociales on unearned income from the UK, but although these sound as if they should be social security contributions they are in fact not at all the same as 'cotisations'. Contributions sociales are your own generous personal contribution to paying off France's national debt.

Also going back to the OP - if you have an S1 as a UK state pensioner, this will automatically become invalid the moment you start working and earning an income in France, so do look at all the potential consequences of this as in the long term you may stand to lose more than you will ever gain.

cyrian

I beg to differ.
You can continue to be taxed in the UK for certain forms of income i.e. Government pensions.
You can apply to HMRC to receive certain other income un-taxed.
In addition, certain forms of income give you no choice.
What you cannot choose is where then final tax calculation is made.
If you are tax resident in France then you must declare all income including any tax already paid on your french tax return.
I understood what you were saying but as an expat it is possible to have a mixture of taxed and un-taxed non-french income to be declared.
Quite a long time ago, one of our members chose to have his pension income taxed in the UK - his choice.
@ET
Thanks for the expansion on the cotisations.
As Garonne said - you cannot compare the two systems.

PDN

Thanks for all the responses. I guess the trouble is you get used to the laws in your own country and then expect there to be an equivalent in another - very naive.

Also very frightening. As I'm reading the responses my understanding is that if I try to do any work whilst being a retired resident in France then I will lose any health cover that I might have expected as an expat UK pensioner plus I will need to set up a business and pay social taxes. The sums involved would tend to kill the idea of 'a little part time income', it's either a full time business or nothing.

From a UK viewpoint I find it difficult to believe that the French don't do any part time work (legally) after official retirement unless it's as an employee.

Although I shall be officially retiring soon (my other half is already retired) I have never had any intention of giving up working altogether. I've been a self employed sole trader for 30 years and retirement to me is about reducing the work load - not stopping entirely. My business lends itself to this sort of flexibility being web and agency based.

My client base and agencies are UK based so the next thing is to explore is to keep the business as a UK operation though paying tax on the income in France. Other posts I've read suggest this might not be possible but I'll try to find a way to make it work.

Again thanks for all the info

EuroTrash

This is not an issue if you think about it, because the French don't have any expat health cover benefits to lose. Of course French pensioners work after retirement - this is one of the chief raisons d'etre of the Auto Entrepreneur scheme, it is designed to give pensioners, students and other people a legal route to earning a small part-time income.

If you are living in France, and you're working for yourself and earning money in France, you have to be registered. The only other option is if you can get what used to be called a workers S1 from the UK (not the same as a retirement S1). This is issued if the work you do in France is ancillary to your main business in the UK; but it's unlikely that you would get one if you and your wife are moving to France permanently and you are no longer carrying out the majority of your work in the UK. Other than that, a French resident working in France with no SIRET number and no cotisations being paid on the income= working on the black, and trying to persuade inspectors any different would be an interesting conversation.

But don't be too scared of setting up as an AE. It sounded from your first post as if you literally just wanted to earn a few extra euros for maybe a year or two - but if you are planning on keeping working long term, it should suit you fine. Yes you will lose your S1 but you will have exactly the same cover via your AE contributions. You might even build up a tiny amount of French pension, extra to your UK pension! AE is capped at I think around 32 000€ pa for consultancy work which gives plenty of scope for a small to moderate income. You will however have to accept the fact that you will get to keep less of what you earn if you live and work in France. That's just the way it is. There are obviously things about life in France that appeal to you, or you wouldn't be making the move, but you can't cherry pick the best of both worlds I'm afraid. You have to take the warts along with the beauty spots, and high cotisations are one of the warts.

PDN

Thanks ET for the positive thoughts, I'll do more research on the AE - don't fancy working on the black and waiting for the knock on the door.

The trick is going to be getting the balance of how much work, how much time, how much cost and how much profit.

EuroTrash

That's it in a nutshell.

As you've no doubt spotted, the big problem with running a business in France but working for a UK client base is you're not on a level footing with UK competitors because their overheads are lower. So if you can pick up clients in France it's better. Otherwise you either have to try and persuade UK clients to pay over the odds, or keep your prices at UK levels to get/keep the business and swallow the losses.

cyrian

Just an extra thought.
If you have a private / company pension then you will be entitled to 25% taken as a tax-free lump sum.
This sum will be taxed in France.
Take any lump sum before you move to France.

Griff1234

There is some useful stuff here, including a description of the difference between an early retiree and one of pensionable age:

http://www.french-property.com/guide...-welfare-levy/

Note that contrary to what someone suggested above, if you are not affiliated to the French health system, you do not pay CSG (as confirmed at my reference).

As others have suggested, you cannot be part of two health systems. A bit of research I did looking at part time work shows that if you work a minimum for 60 hours per week for 4 months, this gives access to the French system, with exactly the same cover (~70%) that you will get from an S1 form.