Readers challenging unexpected social charges on overseas pension incomes which should be exempt say they are seeing progress, with the issue now drawing attention at the highest levels.
Andy Pickwick set up the ‘Government Pension Double Taxation’ Facebook groupAndy Pickwick
Andy Pickwick from Tarn-et-Garonne, who has set up a ‘Government Pension Double Taxation’ Facebook group, has been contacted by French central tax authority the DGFiP.
It followed his request to the UK’s HMRC to look into the levying of social charges on his police pension and his wife’s teaching assistant pension.
The officials asked him to fill in a questionnaire about his situation and he said he is crossing his fingers for a quick resolution.
However, he added: “What at first seemed a straightforward form turns out to be quite complex, for example, they are asking me what French tax was charged.”
He has also further corresponded with a local conciliateur fiscal who has told him “in view of the complexity of the issues raised by your file, and more generally that of some UK nationals who are French tax residents and receive a British pension, your file has been escalated to Bercy [Finance Ministry] for arbitration”.
His case, and several others, relates to pensions that should not attract social charges (CSG, CRDS, Casa) because they are only taxable abroad under double tax treaties.
In other cases, readers are contesting because they are not a burden on the French health system due to having their healthcare paid for by another country under form S1.
Taxation treaties
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The latter rule can be seen on tax form 2041GG and France’s double tax conventions. You need the impôt sur le revenu treaty and look for articles on pensions and élimination des doubles impositions (18 and 24 in the UK and US treaties). Versions in English can be found on government sites of the other countries concerned.
Some more recent treaties such as the France-UK explicitly list the main ‘social charges’ (CSG and CRDS) as being treated in the same way as income tax for these purposes; France and the US have also agreed this to be the case.
John Wilton, with wife SheilaJohn Wilton
John Wilton, 77, and wife Sheila receive UK post office pensions (not ‘government’) and UK state pensions and he reports the head tax office for his area earlier this year asked him to send information confirming which pensions they have, despite the fact the couple have been declaring them for several years and have previously supplied copies of their S1s.
They then received a demand for more than €9,000 of “arrears” because they “should have been paying social charges on them”.
He said it appeared that this was due to an “some kind of audit” by the head office in Angers.
“Normally we deal with the office in Saumur, who are brilliant,” he said. “They are always willing to arrange meetings and to make sure I can complete my forms. However, Angers were insistent, so we employed a lawyer.”
On contacting Saumur, he said they agreed with his understanding. “I then suddenly received an email from Angers, saying ‘you should not pay it, you are exempt’.”
He added: “The lawyer didn’t do anything. I did it by quoting web pages that say with an S1 form you are not liable.
" It was annoying that there was no issue with the local office, yet the head office got it all wrong. It gave me sleepless nights when we received the bill, but then I started reading in The Connexion about how others had faced problems too.”
The case of French citizens
The case of a French reader who is drawing a government pension from work for UK’s Department for Education, highlights a different rule: under the UK-France treaty, if someone is French and only French and lives in France, UK ‘government’ pension income is taxable only in France.
She said she had an “enormous” social charges bill this year on her UK state pension, UK government pension and widow’s pension from her late husband’s teacher’s pension – and wondered if she could avoid this, moving forward, by applying for a UK S1 form.
The increase could therefore be linked to her husband’s death having reduced the household ‘parts’ from two to one.
With regard to obtaining an S1, the reader asks if she can renounce a small French pension, to qualify.
From information received from the UK authorities, if a UK state pensioner in France is not drawing a French pension, an S1 may be issued; the issue is therefore whether a French pension may be renounced.
Cnav, the national body in charge of most private sector pensions, told The Connexion this is possible, but the person cannot later change their mind.
If our reader obtains an S1 and is thus ‘not a burden’ we see no reason for her not to receive her UK pension income without social charges as this rule is not linked to nationality.
Another reader reports having spoken to an agent at his local tax office over CSG on his wife’s UK state pension despite the couple holding S1s, and having found that the worker had little knowledge of the S1 system or double tax treaty.
He was then “horrified” to receive post-meeting notes, stating his own Royal Naval (‘government’) pension should also be subject to CSG.
“I am now in the same boat as other correspondents, and battle is about to commence,” he wrote.
The simplest first step is a private message via your account at the impots.gouv.fr site, selecting Réclamation, then impôt sur le revenu (this will be suitable as the social charges are included on the same bill).
