A friend went back to the UK but only having been resident for three months of that calendar year she only had UK tax to pay. If I was to go back after 10 years, what is the best timing for tax purposes? What if I leave in late March and have a cruise from a French port and arrive in the UK in late April? Also, can you clarify the difference between state and government pensions? W.W.
A STATE pension is paid by the Department of Work and Pensions - due to national insurance paid during one’s working life. A government pension is one paid by the government such as for former workers in emergency services, the diplomatic service, some civil servants, the military etc. and usually paid by the Paymaster General.
With regards to the best date to move back, this would depend on the level of your income.
Bear in mind that the French and UK tax years are not the same (UK: April 6 to April 5; France: calendar year). It then depends on the personal allowances and the tax rates and bands.
There is a UK tax-free allowance of €10,000 and in France of €9,700 (£8,750). The tax-free bands are available for the whole tax year even if not resident in the country for the whole tax year. So, on the basis that someone is going from France to the UK and leaves in, say, early April, they would have just over three months of income subject to the French annual allowance and some 12 months liable to the UK tax-free allowance.
The nature of the income is also pertinent as if the income source is mainly interest and dividends, it is not so much income tax that is the issue but the social charges.
If the income is mostly pensions, for example, as the French levy tax at 14% up to some £24,000 and the UK at 20% over the allowance, with annual income less than about €34,000 the best date to move back to the UK may be after the October and before the November pensions pay dates; but if there is income that is liable to the social charges then that changes everything.
Also, there are tax reductions to account for with regard to pensions and dividends, available in France and not the UK. So the calculation really has to be individual and cannot be generalised.
However, with regard to your example of leaving in March for a cruise and arriving in the UK late April, you have to be a resident of somewhere, so the French would take it that you remained resident in France until the date you arrive in the UK.
Reader's query answered by Hugh MacDonald
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