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bigduckontax
bigduckontax, Accountant
Category: Tax
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Good afternoon, I am over 55 and tax resident in France. I

Customer Question

Good afternoon, I am over 55 and tax resident in France. I have UK pension pots which I am considering moving as cash to France. I understand that if I was to cash in my pots, under last years new rules, 25% will be free of tax and 75% will be taxed a c 40%. As I am not a UK tax payer, under UK-F double taxation treaty can I reclaim the tax paid on the 75% - how is this done and how long would it take, is it paid in cash rather than credits. (The tax I would have to pay in France is c 7.5% on a lump sum plus 7.1% social costs)
I look forward to hearing from you.
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. You are correct in your surmise regarding the taxation effects of your pension liberation. You cannot, however, reclaim the tax paid on the 75% in the UK. Assuming that you are an EEA citizen you will be entitled to the usual UK Personal Allowance of 10.6K. Under the Double Taxation Convention between the UK and France any tax deducted in the UK is allowable as a tax credit against any liability in the other country. The Convention is framed to ensure that the same income stream is not taxed in both jurisdictions. However, the Convention does not protect you from differences in rates of taxation. I do hope that you find my reply of assistance.
Customer: replied 1 year ago.
Keith, thanks for your reply. My pension pots come to quite a big total and, owing to cancer - sorted now - Im not working. So its unlikely i would ever get near to reclaiming the full amount of credit in France ... where transfer of lump sum is taxed at 7.5%, plus 7.1% social costs. So potentially I'd be paying c40% on the 75% plus 7.1% social costs, assuming 7.5% was offset against tax credit and no other income. Do you know anything of QPROPS - I think transfers can be made before tax to EU QPROPS schemes and I have been advised of Maltese QPROPS, income from which can be transferred to France (having paid tax in Malta where required), but they seem to being recommended by offshore bandits who are not keen to specify charges clearly, or income. I imagine you may say you are not able /. allowed to give Company specific guidance, but I could do with a steer in the right direction without being sold a specific product. Where can one get reliable advice, not offshore, on QPROPS ? Wait to hear, Thanks, ***** *****
Expert:  bigduckontax replied 1 year ago.
First Simon, apologies for the delay. I am responding from a time zone seven hours ahead of the UK and was in bed! I had noticed that you would be taxed out of existence by a pension liberation.
You can escape all these consequences using QPROPS. A very good summary can be found here:
https://www.justlanded.com/english/France/Articles/Money/QPROPS
You are correct in your surmise that I am not permitted by Just Answer protocol to give specific recommendations.
Customer: replied 1 year ago.
Good morning Kevin, on subject of QPROPS, quite coincidentally I had already contacted the writer of that article - probably because he is British and based in France and appears in the expat newspapers. He was the one I mentioned proposing, what seems like, a few intermediaries. So I'm trying to drill down into the facts now. Thanks for your tax advice. Its the first time I've used justanswer. How do I close this file? Thanks Simon Taylor
Expert:  bigduckontax replied 1 year ago.
Keith actually, but don't let it worry you; I've been called far worst things in the past! If you would be so kind please rate me before you leave the Just Answer site. One does not usually close down the file, Simon, one just stops posting. France is, I understand, a diabolical country from a taxation perspective. Our general information is that it is so complex and so constantly changing that the use of a local expert is essential. I have an old colleague who retired early to the Dordogne, but finds only his State Pension is taxed in France and none of his occupational ones! I haven't been there save to change planes, when I occasionally popped down to the Creperie de Cluny for lunch, for well over 15 years.
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3612
Experience: FCCA FCMA CGMA ACIS
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Customer: replied 1 year ago.
hi keith, apologies re the name (i know how that happened, we recently lost a colleague to cancer - name kevin - and i was sorting out some photos for his son at about same time as writing to you). thanks simon
Expert:  bigduckontax replied 1 year ago.
Delighted to have been of assistance Simon.
Thank you for your support.
Customer: replied 1 year ago.
Good evening Keith, Last summer I got in touch with BlevinsFranks who give expat advice and sell products like QPROPS. I did same again today. I had seen an article (attached) which inferred UK tax on the 75% could be reclaimed as cash - written by the UK development director of BlevinsFranks. I asked them the same question today and they confirm this can be done and have been involved in instances where it has. (corres also attached). This would seem a much better option than QPROPS with its attendant fees. Do you think your view of getting tax back is correct, or is their view. And how to test the reality of it before doing anything - the sums which could be lost are immense. Wait to hear, Thanks, Simon.
Expert:  bigduckontax replied 1 year ago.
Pensions are taxed in the country of origin, that is the normal procedure. Thus you pension liberation will be taxed at 25% tax free and the balance of 75% at your marginal rate of tax. This marginal rate is applied after the deduction of your personal allowance and the tax taken allowed as a tax credit against any French tax due on the liberation under the Double Taxation Convention. I do not think you will find that tis process will be more advantageous than using QPROPS.

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