Reader question: I am a retired person living in France and receiving a police pension from the UK, which is taxed in the UK. Do I need to complete a French tax return, even if I have no taxable income in France?
The short answer is yes.
Foreign pension income is declared in France, even if it has already been assessed for tax abroad – and this is the case of British ‘government’ pensions of residents in France.
This is not for it to be taxed again but so France has the full picture of your worldwide income.
The key thing is to be clear about the pension type. UK pension income will be a state (‘old age’) pension, a private pension, an occupational pension or a ‘government’ one.
Our reader receives a police pension, which falls under the ‘government pension’ category.
You can read more about what other pensions fall under this category on page 31 of our 2022 Income Tax Guide, which you can buy here.
Under the UK/France double tax treaty, government pensions are taxable only in the country that pays them, unless you live in the other country and are a national only of the country where you live (ie. a person who is only French and lives in France is taxed in France on a UK government pension).
However, even though they are only taxable in the UK, they must still be declared in France so as to be ‘taken into account’ in the overall tax calculation.
As such they qualify for a tax credit cancelling out any actual tax.
While they may be ‘taken into account’, under the UK/France double tax treaty, government pensions are assessable to tax in the UK and so are not liable to assessment to income tax in France – the treaty treats them as assessable in the country from which they are paid.
As a result they may also not have social charges levied on them.
How do you declare government pensions?
UK government service pensions are declared gross and must be placed in form 2047 section 6, for income attracting a ‘tax credit equivalent to the French tax’.
See our short guide below, taken from our 2022 Income Tax Guide.
Why do you have to declare even if it is not taxed?
Certain non-French income, notably UK 'government' pensions and income from UK rentals, attracts a tax credit from France.
This ‘tax credit’ income must still be declared on your French tax declaration, even if it has already been assessed for tax elsewhere (eg. the UK).
The credit is given as a result of the French authorities taking this income into account in the tax calculation. It negates the French tax that would have been paid on this income if it had been ordinary French-taxable income.
The result is that it can cause the tax on your French-taxable income to rise due to it entering a higher tax band or more of it being in your highest band. The aim is to avoid you benefiting from two countries' tax allowances (ie. the 'zero %' first bands).
A provisional tax statement called Avis de situation déclarative à l’impôt sur le revenu (Asdir) is issued immediately after making an online declaration.
In the case of people with no income tax to pay due to low French-taxable income (such as our reader), this document is their only statement and it is a copy of this that is sent out if you receive paper documents (as opposed to the avis d’impôt that is received by those paying French income tax).
You will need your avis or Asdir for administrative procedures such as applying for benefits linked to income. It will contain your revenu fiscal de référence (net taxable annual income figure), which is required for various formalities as well as other information such as your number of ‘family quotient parts’ and tax office contact details.
To understand more about French income tax declarations download our helpguide, Income Tax in France 2022 (for 2021 income). As a digital, downloadable guide, priced €14.90, it was last updated on April 8. Order your copy here