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Inlaws live in France - do I put UK pension on their UK return?

My inlaws moved to france several years ago and complete both French & UK tax returns (I do their uK return, a french accountant does the French side of things).

They are in a business partnership (UK based) with their sons. They receive income from this partnership, plus they also receive UK state and private pensions.

Do I need to include their UK pension income on their UK return? A french accountant I spoke to said that they 'take their pension to france with them' and therefore it appears on their French return & not their UK one... is he correct? I have been including their UK partnership income AND their UK pensions on their UK returns, and they appear to be taxed on the pension income twice - both in the UK and in France.

Should I be leaving this pension income off of their UK return?

Many thanks in advance....

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28th Nov 2012 12:15

French accountant is incorrect

Refer to Articles 18 & 19 of the tax treaty.

Both pensions are taxable only in the UK, assuming for the State Pension that the in-laws have British nationality.

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28th Nov 2012 12:28

The UK state retirement pension can be exported to France

Its a little known election but where a UK state retirement pension is due to be paid to someone who lives in another EU country that state pension can be transferred so it is only taxed in the country of residence. I can't find the HMRC form now, but I have used it in the past. The French accountant is probably right

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28th Nov 2012 12:38

yes.... I think my fatheri n law has completed said form....

but heard nothing back from HMRC as yet.

Presumably if form has been completed, I should be excluding pension from his UK return....

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By foxtrot
28th Nov 2012 13:06

DTA

 

Have a look at the DTA (SI 2009 No 226

Actually what  article 18 says in relation to the  example you quote is that state and private pensions are taxable in France. Article 19 says the pensions from Government Service remain taxable in the UK

 

I can't see what the relevance of Nationality is

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28th Nov 2012 13:08

I am that French accountant

paras007 you obviously have not read the agreement properly !

 

You need to reread Article 18

Subject to the provisions of paragraph 2 of Article 19, pensions and other similar remuneration paid in consideration of past employment to a resident of a Contracting State shall be taxable only in that State.

ie if you are resident in France its taxable in France, article 19 relates to civil service type pension which remain taxable in the UK

 

 

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28th Nov 2012 13:20

brilliant!

Am going with my 'french accountant' (didnt realise he was an accounting-webber too!) as he seems the most knowledgeable person I've met regarding ex-pat (and UK for that matter!) tax stuff.

Thanks all

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28th Nov 2012 16:22

Overseas pension

I had this a few years ago - dealing with the Spanish Hacienda.  Managed to speak with someone fairly knowledgeable at HMRC, and they agreed that the UK State pension should not go on the UK tax return.  Just to be sure, I have ever since put a note in the white space saying that the UK state pension is not included as it is taxed in full in Spain.

The Spanish form seems to be "FD9".

Hope this helps.

Greg.

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28th Nov 2012 14:17

Agreed - my error

Agree with godwinsj - my bad, apologies.

I obviously misread/misintepretated the DTA.

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28th Nov 2012 13:57

i think to be correct HMRC need to see

I think you need to fill in the SA304 form and attach to the UK return to tell HMRC about the pensions, that you are excluding. Box 3 a   on the HS304 is the place for the UK pensions.

http://www.hmrc.gov.uk/helpsheets/hs304.pdf

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By foxtrot
28th Nov 2012 14:43

 

 

 

Indeed so,and SA304 will provide a vehicle for recovering any tax deducted at source

from savings income, which under the DTA (article 12) in France and not in the UK

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By foxtrot
28th Nov 2012 16:59

And, belatedly, to complete the scenario, your in laws each need to complete Form France- Indvidual (see Google) and submit it to the French Impot. It will eventually wend its way to HMRC in Nottingham who will apply NT codes to the private pensions

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28th Nov 2012 17:12

Don't confuse state retrirement pension and other Govt pensions

The treatment is not the same under the double taxation treaties as my parents have found to their cost. The state retirement pension can be taxed in France, and only in France, if the election is made. However the Govt pension ( from work as civil servant/ teacher) cannot be moved to be taxed in France it must continue to be taxed in the UK, but it is also taken into account in France for the various French tax thresholds.

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29th Nov 2012 13:20

Foxtrot

France-Individual already completed by me  (French accountant)

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