Paying tax in France AND in the UK

My UK government (teacher’s) pension and my UK state pension are both taxed in the UK at source. 

29 May 2019
By Hugh McDonald

I also pay French income tax on my total income which I declare on the tax form. Is it correct that I should be paying tax in both countries?  D.S.

The UK state pension is not taxed at source, it is paid gross but its amount is used to reduce your personal allowance and tax may be taken off other UK incomes you have where applicable.

British pensioners living in the UK and who do not have any other incomes from which tax can be deducted at source, such as other pensions or income from work, may have to complete a self-assessment form so HMRC can calculate and confirm any tax that may be due.

This should not apply to you since under the Franco-British double tax treaty, the old age state pension should only be declared and taxed in France.

As for the government pension, this should be taxed in the UK under the same double tax treaty, as if it were your only UK income, from which your personal allowance will be deducted. Any excess income over the allowance will then be taxed in the UK.

The French tax declaration allows both of these sources of income to be declared separately in specific boxes.

The French tax authorities will only tax the state pension. They will take into account the UK government pension in the overall tax calculation but will give a tax credit to nullify the inclusion of the government income.

Having said which, tax on the state pension may be higher than if you had not had the government income included.

This is normal; it is a means of removing the advantage that you will have had of two sets of personal allowances in two countries, and two set of tax bands and tax rates.


Reader's query answered by Hugh MacDonald

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