Premium Bond wins taxable in France
Lottery wins are not taxable in France but Premium Bond wins are - here's why
Q: NATIONAL Savings and Investments (NS&I) told me they consider Premium Bond winnings to be a game of chance - that is, winnings from a lottery.
Lottery wins are not taxable in France but I am told that Premium Bond wins are.
The tax office seem to be confused by NS&I’s name, which mentions “savings” and to think they are a type of interest.
However the Premium Bonds rules say no interest is paid.
A: ON THE whole local tax offices in France are unfamiliar with Premium Bonds.
Limoges tax office boss Pierre Vergne, who has dealt with Premium Bond queries from Britons in France, said they were aware that there was no direct income from them.
However he said they were seen as an investment and the winnings from them were deemed taxable.
He said: “They are a financial investment just like any other, what is called an obligation à lot in France [prize bond].
“These used to exist in France but no longer do.”
NS&I describe Premium Bonds as a kind of investment where you enter a prize draw instead of getting interest, and winnings are not taxable in the UK.
However in one sense interest is involved: the prize fund comes from a (currently) 1.5% interest on the value of all of the money invested in bonds.
This interest is put into the prize pot instead of being paid individually.
It is ultimately the French tax authorities who decide whether the money should be declared, and in this case they have decided they do not compare them to an ordinary lottery win.
The winnings should be recorded on tax form 2047, which is for income from foreign investments, under section A.
This section is also for UK stocks and shares dividends and ones from PEPs and ISAs.
