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A Thread on Tax for simple-minded people

A Thread on Tax for simple-minded people

Old Dec 30th 2023, 8:26 am
  #61  
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Default Re: A Thread on Tax for simple-minded people

Thanks Helen, Cyrian and Euro - it's lovely being forced to speak French - had to do it just yesterday to the French tax people.
Haven't spoken any for years but it comes back ... ...

I think they realise that we're trying and so simplify.
soixante huit became six huit -- :-) -- but six huit didn't pick up!

Bit harder for us to speak Spanish than French but the overlap is incredible.

We've pretty much decided thanks to a nice chap called Lynn who has helped out on one of my 2 threads - to go for Spain but as a second home.
Maybe we'll get back to France at 67 but maybe we won't last that long.

The bit I don't like about France is that it's quite easy to optimize our life so we can live for next to no money here - we've so many comparison sites - just teaching my kids to use MoneySavingsExpert -- a full mobile phone contract for the year including data for £30 is possible now. I think that Free Telecom has started disrupting 'things' in France - I'm used (the old days) to the big companies Orange, SFR, Bourgeoisie or however you spell it :-) more or less price fixing.

So - it's more just the daily admin and the inflexibility in public sector and private sector behaviour - where we're force to shoulder.

I actually managed a phone call with a tax expert in the UK via the HMRC website yesterday. Actual help!

I phoned up the tax office in Pau to ask them about 'Social charges' on Private pension drawdowns <67 and after passing through their automated messages - the phone rang 5 or 10 tmes and then just cut out. Repeated the exercise 3 times.
A little confused why the 'UK Non-resident Tax line' in France wants us to talk to a tax office in a specific place - the rule should be the same wherever we decide to relocate to?

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Old Dec 30th 2023, 10:26 am
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Default Re: A Thread on Tax for simple-minded people

Originally Posted by SB_UK
A little confused why the 'UK Non-resident Tax line' in France wants us to talk to a tax office in a specific place - the rule should be the same wherever we decide to relocate to?
The problem here would be that you were asking the "non-resident" tax line a question that is not relevant to non residents. The non resident service cannot answer questions about how you will be taxed as a resident, which is what you were asking. Presumably you said you were moving to Pau? So it's normal they would direct you to the Pau tax office. Obviously the tax code is national but for residents your own tax office is always your point of contact, there is no need for a national tax helpline for residents because they all have a local office that deals with them, and in my experience local offices provide an excellent one-to-one service.
In other words, the Non Resident tax line is a service that gives advice on how non residents are taxed, not a service that gives advice to non residents on how residents are taxed.


Originally Posted by SB_UK
That's the most significant thing I've read on the 2 forums I'm on - does that mean that I have to come back to the UK for a couple of months at 66 and work in a petrol station or something similar to get an S1 !
(quite like the idea - was one of my first jobs!)
I'm not totally sure on all the details, I'm sure you'll find chapter and verse if you google. Inasfar as I understand it, it seems quite simple when there are only two countries involved, it's when there's 3 or more countries involved that it gets complicated, but that doesn't seem to be the case here. As I said above I think that if you live in an EU country after retirement and you qualify for a pension from that country, then that country is your "competent state" for your healthcare in retirement for as long as you live there. (Not sure they still use the term "competent state", that's what they used to call it but since so few states are competent perhaps they realised what a joke that term was.) So if you live in France and have a pension from France then France would automatically be your competent state, and the facts of having worked in the UK previously/returned to work in the UK at 66/having a UK pension would not change that. That's the theory, however in practice the UK as usual seems to have no proper system for keeping tabs on anything so it tends to dish out S1s to just about everyone who asks, so a lot of people get S1s that shouldn't. But occasionally you do see posts from someone who got turned down (sometimes rightly and sometimes wrongly). and occasionally France refuses to register an S1 because the system flags up that the S1 is incompatible with that person's situation and won't accept it .

Originally Posted by SB_UK
I actually managed a phone call with a tax expert in the UK via the HMRC website yesterday. Actual help!
Crikey you're doing better than me. Last time I tried to talk to HMRC it took the best part of an hour to get through and then I was told that since my question involved international tax rules I needed to speak to a "technician" and there were none available, try again next month (by which time I would have missed the filing deadline). In the end I gave up and paid an accountant to sort it all out.


Originally Posted by SB_UK
The bit I don't like about France is that it's quite easy to optimize our life so we can live for next to no money here - we've so many comparison sites - just teaching my kids to use MoneySavingsExpert -- a full mobile phone contract for the year including data for £30 is possible now. I think that Free Telecom has started disrupting 'things' in France - I'm used (the old days) to the big companies Orange, SFR, Bourgeoisie or however you spell it :-) more or less price fixing.
I suppose that's one of the things I would include in the "different mindset" category. I don't think people in France are nearly so fixated on buying on price and paring the cost of everything back to the bone. I'm not saying they're daft enough to pay over the odds, say if a supermarket offers an item at one price in its catalogue and tries to charge more instore they never let that go, but generally they accept that things have a cost and if the cost seems fair and reasonable for what they get, that's good enough. Banking is a good example, Brits who hadn't done their homework before moving used to be regularly up in arms when they couldn't find a high street bank that provided "free" banking like UK banks do. They expect me to pay a monthly fee, and 50€ for a bank card, shock horror, it's outrageous. I suppose it is simply that if you've grown up with free banking you expect banking to be free, and if you haven't grown up with free banking then it doesn't occur to you to expect banking to be free because why should it be, not many services are free and after all banks employ staff and invest in hardware and software for customers to use.

Last edited by EuroTrash; Dec 30th 2023 at 10:31 am.
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Old Dec 30th 2023, 1:21 pm
  #63  
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Default Re: A Thread on Tax for simple-minded people

Originally Posted by EuroTrash
The problem here would be that you were asking the "non-resident" tax line a question that is not relevant to non residents. The non resident service cannot answer questions about how you will be taxed as a resident, which is what you were asking. Presumably you said you were moving to Pau? So it's normal they would direct you to the Pau tax office. Obviously the tax code is national but for residents your own tax office is always your point of contact, there is no need for a national tax helpline for residents because they all have a local office that deals with them, and in my experience local offices provide an excellent one-to-one service.
In other words, the Non Resident tax line is a service that gives advice on how non residents are taxed, not a service that gives advice to non residents on how residents are taxed.




I'm not totally sure on all the details, I'm sure you'll find chapter and verse if you google. Inasfar as I understand it, it seems quite simple when there are only two countries involved, it's when there's 3 or more countries involved that it gets complicated, but that doesn't seem to be the case here. As I said above I think that if you live in an EU country after retirement and you qualify for a pension from that country, then that country is your "competent state" for your healthcare in retirement for as long as you live there. (Not sure they still use the term "competent state", that's what they used to call it but since so few states are competent perhaps they realised what a joke that term was.) So if you live in France and have a pension from France then France would automatically be your competent state, and the facts of having worked in the UK previously/returned to work in the UK at 66/having a UK pension would not change that. That's the theory, however in practice the UK as usual seems to have no proper system for keeping tabs on anything so it tends to dish out S1s to just about everyone who asks, so a lot of people get S1s that shouldn't. But occasionally you do see posts from someone who got turned down (sometimes rightly and sometimes wrongly). and occasionally France refuses to register an S1 because the system flags up that the S1 is incompatible with that person's situation and won't accept it .

Crikey you're doing better than me. Last time I tried to talk to HMRC it took the best part of an hour to get through and then I was told that since my question involved international tax rules I needed to speak to a "technician" and there were none available, try again next month (by which time I would have missed the filing deadline). In the end I gave up and paid an accountant to sort it all out.



I suppose that's one of the things I would include in the "different mindset" category. I don't think people in France are nearly so fixated on buying on price and paring the cost of everything back to the bone. I'm not saying they're daft enough to pay over the odds, say if a supermarket offers an item at one price in its catalogue and tries to charge more instore they never let that go, but generally they accept that things have a cost and if the cost seems fair and reasonable for what they get, that's good enough. Banking is a good example, Brits who hadn't done their homework before moving used to be regularly up in arms when they couldn't find a high street bank that provided "free" banking like UK banks do. They expect me to pay a monthly fee, and 50€ for a bank card, shock horror, it's outrageous. I suppose it is simply that if you've grown up with free banking you expect banking to be free, and if you haven't grown up with free banking then it doesn't occur to you to expect banking to be free because why should it be, not many services are free and after all banks employ staff and invest in hardware and software for customers to use.
So non-resident tax line doesn't mean a line to talk about tax if you're a non-resident?
:-) I was willing it to be so, without thinking too deeply - mostly because ... ... ...

Banking charges! We ended up shifting to Credit agricole Britline and Starling to have an account with a card without a charge. Do you still have to pay for an account? And pay for a direct debit card?

Yes, had first round advice which was OK and then a 'tax tech' a few hours later!
He confirmed that I HAVE to speak to France re:tax if resident there for >183 days.
He was unable to give me any more information like a counterpart in the other country.

I've been googling and failing - do you think that if you have a second home in Europe and rent ot out - that the income that's paid on the rental (to cover the expenses of running the house and nothing more) - and which're declared in either France or Spain - would mean that we're contributing to a pension ie meaning as you suggest that we've lost the freedom to access S1?
The S1 is ALL important - has become the single most important thing we need.

If I'm following correctly - then employed + self-employed pay into / contribute towards their a (state) pension (it's the Social Security charge not the Social charge) - have you any idea if rental income 'd be classified as income and so result in loss of S1.

Additionally - if French tax resident pensioners (>67) renting a property in Spain >67 wouldn't be eligible (iw would lose eligibility to) for S1 because we're then (well as above) - contributing into a pension (the social security charge) which means that due to our presence 'in_competent' state we're now without healthcare. Or is it that if we've shifted 'competent' states through paying in as little as a E1-2000 over our lifetime - that then healthcare >67 is fully covered by that EU state?

Google search terms are difficult here - most of the info is on how to pay tax if we're renting out a property as a tax resident Brit in Spain - the 'S1' thing (and THANKS again for mentioning this) - doesn't come up.

Saving money has become a pastime in the UK for many of us.
I think many of us do it as a hobby now - nothing to do with money.

Just back from Aldi and had a lovely 15 mins comparing the price of peanuts when treated with various toppings. The price even at Aldi per 100g peanuts can vary by 3 fold.

I know - it's enough to drive you into the arms of Lidl, which we did as it's on the opposite side of the street - I can though confirm that Aldi is cheaper :-).

Wouldn't it be nice to be able to survive happily without money?
So much time wasted.

Went into Intermarche around 10 or 15 years ago - bought a garlic press, it broke the first time that I used it - and the shop didn't want to issue a refund.
Now that is madness! The story has a happy ending though as they gave me one in the end!

Last edited by SB_UK; Dec 30th 2023 at 1:36 pm.
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Old Dec 30th 2023, 1:40 pm
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Default Re: A Thread on Tax for simple-minded people

I’ve been renting out houses in the UK for years while resident in France and I can assure you it won’t entitle me to any kind of French pension.
UK rental income isn’t even subject to tax or social charges in France. One of the few types of foreign income that isn’t.
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Old Dec 30th 2023, 2:39 pm
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Default Re: A Thread on Tax for simple-minded people

Originally Posted by SB_UK
So non-resident tax line doesn't mean a line to talk about tax if you're a non-resident?
Haha, but nope ...

Originally Posted by SB_UK
He confirmed that I HAVE to speak to France re:tax if resident there for >183 days.
He was wrong with the second bit then, because 183 is not France's main criteria for tax residence. You can spend fewer than 183 in France and be resident, that is not at all uncommon, and you can spend more than 183 days in France and be non resident but that is less common.

Originally Posted by SB_UK
do you think that if you have a second home in Europe and rent ot out - that the income that's paid on the rental (to cover the expenses of running the house and nothing more) - and which're declared in either France or Spain - would mean that we're contributing to a pension
I can't answer for Spain, but for France the answer is No. As a non resident you simply declare French rental income as revenus fonciers, you don't pay cotisations so it doesn't affect your S1 entitlement. You've probably already found the relevant page that explains how non residents' revenus fonciers are treated https://www.impots.gouv.fr/internati...iliers-sagit-i and you will be delighted to see you can be exonerated social charges if you can prove you're covered for healthcare in another EU country or the UK.
Tax liability on renting out a second home as a non resident is exactly the sort of thing the Non Residents tax service is there to help with, and in fact I believe the rules on tourist rentals are under review and expected to change next year (Ithere's a rumour that some of the abattements are being reduced) so why not give your favourite tax line another call and ask them a few questions that they should be able to answer..
You would of course be liable for taxe d'habitation on the property so bear in mind when you're doing your sums that the first chunk of your rental income will be taken up paying that and the taxe foncière.

Originally Posted by SB_UK
Saving money has become a pastime in the UK for many of us.
I think many of us do it as a hobby now - nothing to do with money.
Yes, that's the impression I got. Used to be that shopping was one of the UK's favourite national pastimes, now apparently it's saving money. Or maybe it's both - you save money on things you need so you can spend more on things you don't need? But hey, each to their own.


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Old Dec 30th 2023, 2:54 pm
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Default Re: A Thread on Tax for simple-minded people

Originally Posted by EuroTrash


I can't answer for Spain, but for France the answer is No. As a non resident you simply declare French rental income as revenus fonciers, you don't pay cotisations so it doesn't affect your S1 entitlement.
It is exactly the same in Spain - paying income tax doesn't entitle you to a pension or healthcare, it is paying social security contributions which does that, and they are only payable on income from work, whether for an employer or self-employment, not passive income from renting or investment income.

But if the OP has now decided to remain tax resident in the UK and just buy a second home in Spain, as he says, then these questions cease to be relevant, surely.

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Old Dec 30th 2023, 3:08 pm
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Default Re: A Thread on Tax for simple-minded people

Originally Posted by Lynn R
But if the OP has now decided to remain tax resident in the UK and just buy a second home in Spain, as he says, then these questions cease to be relevant, surely.
As I understood it, he is thinking of renting out his second home in Spain (or France) and his question was that he is concerned that this might scupper his rights to a UK S1.
He is thinking that Spain (or France) might treat renting out a property as working in that country, and levy social security contributions on the income as if he was working there. France wouldn't and I can't believe Spain would either, as you say it is treated as passive income.
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Old Dec 30th 2023, 4:20 pm
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Default Re: A Thread on Tax for simple-minded people

Wonderful! So summarising ... ... ...
Over the days here and on the other forum - we can do what we originally wanted if -

Thanks to the French contingent - we remain as UK residents and buy a second home in Spain now.
Mostly we're too bored of work to continue and so we can more or less give up now.

Thanks to Lynn - and then at 67 sell up in the UK, move to Pau and just rent out the second home in Spain sufficient to recoup the various costs that're incurred.

The 'Social charge' we'll be paying is giving away veggies to our neighbours.
The money savings thing is more about the feeling that comes from not needing it - rather than saving it to buy something.
Nothing we want.

So - absolutely impossible to do the France - Spain thing at 57 because of the tax and healthcare costs - but at 67 - it all works fine.
We'll drop into the tax office in Pau on the way to Valencia and talk face-to-face just so we're ready - but 10 years is a long time.

Thanks a zillion!
My wife has started looking :-) in Spain.

You certainly know your stuff!

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Old Dec 30th 2023, 5:34 pm
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Default Re: A Thread on Tax for simple-minded people

Originally Posted by SB_UK
Wonderful!
Over the days here and on the other forum - we can do what we originally wanted if -

Thanks to the French contingent - we remain as UK residents and buy a second home in Spain now.
Mostly we're too bored of work to continue and so we can more or less give up now.

Thanks to Lynn - and then at 67 sell up in the UK, move to Pau and just rent out the second home in Spain sufficient to recoup the various costs that're incurred.
Sounds like you potentially have a go-er.
Being me though, I have to echo that 10 years is a long time and the picture can change a lot. I decided to make the move when I had 10 years left to go before collecting my pension, so I thought, because I wanted to experience France more immersively by living and working here and hopefully getting a bit of an understanding of what makes France tick; I didn't want to just come to retire. I had savings set aside and my plan was to keep my business ticking over gently with no pressure, and then in 7 or 8 years I could start winding down gradually for retirement. The year after I arrived the economy crashed both sides of the Channel, I lost my three main UK clients all within a couple of months, which meant my income fell off a cliff, and I couldn't get at most of my savings because I hadn't expected to need to top my earnings up so soon and my money was tied up in long term bonds. So I had an interesting couple of years hovering around the breadline. Then I discovered - hands up, should probably have known already but I never received the famous letter - that I coudn't collect my pension at 60 like I'd been counting on, it was going to be 65 (which later went up to 66). So the savings that I'd thought would take the pressure off and let me coast along for 10 years, now had to stretch for 15 going on 16 years, plus I'd lost most of my earnings. Which meant I had to crank the business up again, hard. Looking back it was a whole rollercoaster ride that I hadn't bargained for and it could easily have ended in tears, and it has made me very skeptical of setting too much store on long term plans that can so easily be upended by things we have no control over - government policies and the economy, but not only.
For instance, hopefully UK/EU relations are going to keep getting better in the future, but if things were to turn dreadfully sour, say the UK were to pursue certain policies that the EU considers contrary to the principles the UK promised to adhere to (democracy, human rights and all) and unacceptable in a trading partner, and as a result the trade and cooperation agreement is pulled, that would almost certainly take the UK out of the social security coordination agreement (which isn't in the Withdrawal Agreement) and there would be no new S1s issued by the UK, because S1s are an EU thing.
Keep an eye on the news and use your vote wisely .

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Old Dec 31st 2023, 7:51 am
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Default Re: A Thread on Tax for simple-minded people

Originally Posted by EuroTrash
Sounds like you potentially have a go-er.
Being me though, I have to echo that 10 years is a long time and the picture can change a lot. I decided to make the move when I had 10 years left to go before collecting my pension, so I thought, because I wanted to experience France more immersively by living and working here and hopefully getting a bit of an understanding of what makes France tick; I didn't want to just come to retire. I had savings set aside and my plan was to keep my business ticking over gently with no pressure, and then in 7 or 8 years I could start winding down gradually for retirement. The year after I arrived the economy crashed both sides of the Channel, I lost my three main UK clients all within a couple of months, which meant my income fell off a cliff, and I couldn't get at most of my savings because I hadn't expected to need to top my earnings up so soon and my money was tied up in long term bonds. So I had an interesting couple of years hovering around the breadline. Then I discovered - hands up, should probably have known already but I never received the famous letter - that I coudn't collect my pension at 60 like I'd been counting on, it was going to be 65 (which later went up to 66). So the savings that I'd thought would take the pressure off and let me coast along for 10 years, now had to stretch for 15 going on 16 years, plus I'd lost most of my earnings. Which meant I had to crank the business up again, hard. Looking back it was a whole rollercoaster ride that I hadn't bargained for and it could easily have ended in tears, and it has made me very skeptical of setting too much store on long term plans that can so easily be upended by things we have no control over - government policies and the economy, but not only.
For instance, hopefully UK/EU relations are going to keep getting better in the future, but if things were to turn dreadfully sour, say the UK were to pursue certain policies that the EU considers contrary to the principles the UK promised to adhere to (democracy, human rights and all) and unacceptable in a trading partner, and as a result the trade and cooperation agreement is pulled, that would almost certainly take the UK out of the social security coordination agreement (which isn't in the Withdrawal Agreement) and there would be no new S1s issued by the UK, because S1s are an EU thing.
Keep an eye on the news and use your vote wisely .
You have had a rough ride! It doesn't help that as this all has been happening - we're getting older all the while.


My plan was to kick off again in French/Spanish academic Institutes but your much welcomed info on the S1 has put an end to that!
Not a worry - will have to work in the UK.

I really have no faith in anything financial - personally, I think that all nations have racked up too much debt, I am not sure that the stock market has been rising for valid reasons (more reasons relating to the availability of cheap money) - and wonder whether the global economic system is about to have a moment. All that we can do to protect ourselves is grow vegetables (Pau) and nuts (Valencia) in the sun - and to be able to cycle or walk between the two!
The idea's kinda' similar to snowbird migration.

The planet's experiencing unprecedented issues currently - all that we can do is hope that all of these issues drive human beings into helping one another.
France, Spain are strongly Christian countries - a rediscovery of the Two Commandments of Jesus?
They're actually common sense (to all those people over the years that have an in-built aversion to the mention of religion).

Last edited by Rosemary; Dec 31st 2023 at 8:19 am. Reason: Deleted portion due to Rule 9
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Old Jan 13th 2024, 6:16 pm
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Default Re: A Thread on Tax for simple-minded people

Hi – after 4 threads I’d just like to thank everybody who has been involved.

All of our issues have been solved by people here.

Summarised to help others in my situation.

Key Issues – Visa, Inheritance tax, Income tax, Healthcare.

Question – 57 + (French) wife and want to retire to France <67 with pension drawdown and 1 savings account – what are the tax implications? as we can manage it in the UK but do France/Spain have similar ‘soft’ rules on taxation of relatively low income? Comparison of a move to France vs Spain.

Solution – Since my wife is French, some of the comments in this thread aren’t useful to a British couple (as Visa requirements are simpler for us). The optimal path for us is to buy a cheap house in the UK and rent for 90 days in Spain (to beat both the 90 day and 90/180 rules apply) each year (during Winter here). When we’ve discovered somewhere nice in Spain it’s possible to buy and rent it out so we don’t lose too much money when we’re not in it. Renting in Spain does not compromise the S1 as it’s considered passive income but any ‘active’ income in Spain will mean that the prospect of obtaining S1 is lost. The cost of living in France (most notably taxes) is too expensive until we’re 67 and obtain S1 and are able to pay lower Social charges on a pension drawdown and a savings account. At that point we can move to Pau and oscillate between it as our main residence and Valencia during Winter. France has a remarkably generous tax-free gifting rule in place for one’s children.

***None*** 😊 of these plans were in place before the 4 threads I reference below.
I think it’s evidence of what people can do when they talk.
All of this was worked out without any tax specialist, without any financial planner etc … …

--- Key posts below ---

--- Source Expat forum ---
https://www.expatforum.com/threads/a...eople.1538789/
https://www.expatforum.com/threads/s...8932#nupNotice
--- Source British expats forum ---
A Thread on Tax for simple-minded people
Stay in Spain for >3 months (UK and EU citizen wife)


--- Key Points extracted from the 100 page document that arose from those 4 threads ---
IN ATTACHMENT

- I have a pension annuity that is paid in the Uk, although my savings I transferred to France at the time. You should complete this form and let HMRC know that you wish to be considered a tax resident in France and you shouldn't be taxed in the UK.
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/858806/DT_Ind_France_01_20.pdf
Attached Files
File Type: pdf
20240113 FranceSpain edited.pdf (384.1 KB, 10 views)
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