There will be many things to do in arranging a move to France and a lot of people to tell. You should inform the UK tax authorities of your departure and also inform the French tax authorities of your intention to live permanently in France. By doing this you can avoid any unnecessary delays in getting your UK pension income paid to you gross and also ensure that you receive any medical cover that you are entitled to in France.
Before Leaving the UK
You should let HM Revenue & Customs (HMRC) know of your likely departure date from the UK. Although this is not mandatory, it indicates to HMRC your likely residence status after your departure. In most cases this means that you can be treated as UK non-resident from the date of your departure. To do this you will have to obtain a Form P85 from your local tax office or download one from www.hmrc.gov.uk.
Any UK Government service pensions will remain taxable only in the UK and will not be directly taxed in France (though the income is taken into account for the purposes of determining the rate of tax payable on other French source income). Your UK state retirement pension is always paid gross, so you will declare it and pay tax on it in France. For personal pensions and any non-government source occupational pensions, UK pension providers will continue to deduct UK tax at source until HMRC are satisfied that you are French tax resident and liable to French tax on this income. They will then advise the pension provider to pay the income to you gross and make a repayment of any UK tax deducted at source. In order to arrange this, you should obtain Form France/Individual from HMRC which can also be downloaded. The form comes in two identical parts (French and English) and you submit it to your local French tax office (usually with your first tax return) who will stamp it to confirm you are French tax resident and the income is taxable in France. They will then send the English part to HMRC.
If you retain any UK bank accounts, the bank interest will only be taxable in France. In order to receive your UK bank interest gross you can submit a Form R105 to your bank or building society. Not all banks will pay interest gross and it usually depends on the type of account you have. Form R105 can also be obtained from HMRC or downloaded from the website.
If you have any continuing UK rental income when you are in France, you can usually arrange for your UK rental income to be paid gross to you. You can do this by submitting Form NRL1 to CAR – Personal Tax International, Unit 406, St. John’s House, Merton Road, Liverpool, L75 1BB. Form NRL1 can also be downloaded.
You will need to let your pension providers, including the Department for Work and Pensions (DWP), know of your new address and make arrangements for any change in where the pension is to be paid i.e. bank account. UK state pension can also be paid directly into your French bank account.
If you are moving to France before reaching the UK state retirement age, you should apply for a pension forecast to determine whether you have made sufficient contributions to receive a full state pension once you reach state retirement age. Men born before 6 April 1945 usually need 44 qualifying years, while those born afterwards need 30. Women born before 6 April 1950 usually need 39 qualifying years and those born after need 30.
UK residents can obtain a pension forecast from the Retirement Pension Forecasting Team at the DWP in Newcastle upon Tyne. It can be dealt with over the telephone by calling 0845 300 0168. Alternatively, you can obtain Form BR19 from your local DWP Social Security office or fill in the form from the DWP website.
If you have not made sufficient contributions for a full UK state retirement pension, it is possible to make top-up contributions to increase your pension entitlement by paying voluntary Class 2 or Class 3 NationaI Insurance contributions in the UK after you have moved to France.
Class 2 contributions protect entitlement to retirement pension, widows benefits and invalidity benefit (and maternity allowance). Class 3 contributions only protect entitlement to retirement pension and widows benefit. You can only pay Class 2 contributions if you are employed or self-employed abroad.
You can register with the French state healthcare system if you hold Form S1, which is available from the DWP. This provides healthcare cover on a household basis. You are entitled to the form if you are in receipt of a UK state retirement pension (or certain long-term benefits such as long-term incapacity benefit, severe disablement allowance, bereavement benefits or widow’s benefits). You can also get an S1 if you are under UK state pension age and have made full Class 1 or 2 UK NI contributions as an employee or self-employed person in the two UK tax years prior to your departure from the UK. In this case it is valid for up to two-and-a-half years after leaving the UK.
Unless you have Form S1, or intend to work in France and pay social security contributions, you will need to arrange private medical cover.
After Arriving in France
Once you arrive in France with an intention to reside there indefinitely, you become a tax resident the day after your arrival. It is your responsibility to make yourself known to the French tax authorities and to fully declare your income, capital gains and wealth. The taxes are administered by over 120,000 tax agents as part of the Ministry of Finance (Ministre de l’Economie et des Finances). You should ascertain the whereabouts of the local tax office (Hotel des Impôts) in order to file your tax return. Bear in mind that the French tax year runs from 1 January to 31 December and tax returns should be made by 31 May of the following year.
French tax can be complicated so you may need to take advice from an experienced accountant, expert comptable or tax adviser, conseiller fiscal, dealing with French tax matters, preferably one who is both familiar with expatriate issues and with your local tax office.
If you have Form S1 you will have to locate your local CPAM (Caisse Primaire d’Assurance Maladie) office to submit the form to have access to French state healthcare. The French system, the Couverture Maladie Universelle (CMU), does not cover the full cost of French healthcare and it is advisable to take out top-up insurance so that you do not have to pay any shortfall yourself. Top-up insurance cannot be purchased until you are registered with the CMU. If you do not have access to the CMU and have not already done so, you should arrange for private medical insurance.
You will obviously need to open French bank accounts and if you have investment capital should seek professional advice to establish the most efficient investment structures for French residents, especially from the point of view of tax planning. The French tax rules constantly change so it is best to take advice on this matter.
The tax rates, scope and reliefs may change. Any statements concerning taxation are based upon our understanding of current taxation laws and practices which are subject to change. Tax information has been summarised; an individual must take personalised advice.
•With thanks to David Franks
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