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Cashing in a UK Pension

Posted by HarleyRider58 - Created: 3 years ago
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10 replies (Showing replies: 1 to 10)

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Posted by vivaofsnape - 3 years ago

If your lump sum payment together with all your other worldwide assets puts you over the Wealth Tax threshold, then you willbe liable to pay this tax

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Posted by airpo - 3 years ago

I did check with HMRC who confirmed the information given to me by the pension company as correct.

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Posted by tinabee - 3 years ago

The France individual form only applies retrospectively, i.e. when the French authorities confirm that the pension is being taxed in France. You need to complete a France Individual form for each new pension received, so it may be simpler to use the R43 as it does not need to be stamped by the French tax office and you can submit it at the end of the UK tax year, rather than the May following the French tax year.

So using airpo's example, it might be worth drawing the lump sum in March 2016, so you can reclaim the tax using the R43 in April/May 2016, rather than submitting the France Individual in May 2017 when you will declare the income to the French tax office.

I have been using the R43 for interest taxed at source since 2016, and HMRC have got a lot more efficient at processing these forms in the past few years.

PS - don't forget to declare your UK bank accounts on your French tax forms

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Posted by tigre-979768 - 3 years ago

Harley I would check with the Inland revenue first regrding the france individual form, if you fill it out and it is stamped by both the UK and the french tax authorities you will not be taxed twice on any UK income declared in france.

Airpo, I do not think I would take the word of an employee of your pension company regarding taxation rules in france.

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Posted by airpo - 3 years ago

I was told by my Pension company that ALL lump sums are taxed, even if you have a S1 2009 (I had), then you have to claim the tax back via a R43. 

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Posted by tigre-979768 - 3 years ago

The form seems to be S1 2009 number 226 (form france individual) this could save you trying to claim back any UK taxed income every year via the R43.

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Posted by tigre-979768 - 3 years ago

Harley Rider, from what I understand of the french tax system is if you register as a full time tax resident in france you would be best advised to fill out a france individual form, this then stops you being taxed twice on any income you have coming from the UK, once it is done you would not have to claim back from the UK tax man via the R43. As Emu said if you are under retirement age this income will be liable for social charges. 

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Posted by airpo - 3 years ago

As a French resident the UK 'tax year' is irrelevant, unless you are planning to withdraw the pot over a number of years, even then as you can claim back the UK tax paid and/or declare all UK income to the French tax man, it’s still irrelevant.

The only ‘gotcha’ I found was having to kick HMRC to process the R43 but a lot of that was because my pension company transposed the letters of my NI number on the P45 they issued.

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Posted by Emu-408495 - 3 years ago

Are you of UK retirement age and therefore qualify for an S1?  If not you will have to pay CSG/CRDS on the full amount.  I spoke to my local tax office last year about this and was told that the 7.5 tax rate was removed in 2013.  The amount is simply added to all other income and taxed according to the normal tax bands.

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Posted by HarleyRider58 - 3 years ago

Thanks airpo....   I do understand about the tax implications; hence why I'm waiting until the new UK tax year in 2016.

 

I was actually enquiring as to any "gotcha's" that my lurk in the corners by living in France when I make the distribution request from my pension company.

 

Thanks again!