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UK pension lump sums

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

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Posted by alice-383074 - 3 years ago

reading your link,I think the 7,5 rule is still in force, but it says that you can also opt for the quotient system.

The lump sum declared is spread over several years and is included as taxable income. If you have a low income and don't have to pay tax,and the lump sum isn't very big this may be a good option.

You can use the simulator to see which way is best.

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Posted by Emu-408495 - 3 years ago

Thanks very much for the link seashal, just what i needed.  It certainly looks as though the 7.5 rate stands.  it will be interesting in Aug 2017 to see what the result of the declaration will be.

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Posted by seashal - 3 years ago

I have looked at impots.gouv.fr and think that the 7.5 rule is still in force.  When you are on that websites first page go to Particuliers then select Je pars en retraite in the Travail section.  Then chose Vous partez a la retraite then the section Pension de retraite versee en capital.

Perhaps I have misunderstood - do you think as I do?

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Posted by Emu-408495 - 3 years ago

Does anyone know of a link which explains the 7.5  rate of tax on UK pension lump sum.  The tax office have told me that this no longer applies and that my lump sum will be assessed and taxed as if it is normal income.  Apparently the law change was made in 2013 so it will affect payments made in 2014 onwards. If anyone knows of a link to a french site which disputes this i would be grateful.

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Posted by seashal - 3 years ago

Thanks for all your replies - so helpful, as usual.

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Posted by seashal - 3 years ago

Thanks for all your replies - so helpful, as usual.

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Posted by evenevenmoreantibs - 3 years ago

Sorry typo, it was a P45 I was sent

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Posted by evenevenmoreantibs - 3 years ago

Suziepops, no, I was sent a P60 wen I cashed in my pension a month or so ago.

Lemmonblizard, the tax on the 75% is now at the marginal rate of 40%

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Posted by suziepops - 3 years ago

evenevenmoreantibs - think you mean a P60 and not a P45.

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Posted by lemonblizzard-786082 - 3 years ago

The 25% part of the Uk tax free lump sum is taxable for a one off income tax in France at 7.5% placed in box 1AT of the 2042 (blue form). No CSG or social charge is payable.

currently if you choose to take the remaining 75% from your UK pension fund it is taxable at your marginal rate of 20/40% in the UK, which should be reclaimablae through the 'France Individual Form' and declared here. Again the remainder is taxable at your marginal rate in France (and not at 7.5%) as it is classified as income under the Double Taxation Treaty