Following the recent queries regarding the FAQ section which deals with the declaration of annuities, the following information will hopefully provide further clarification.
The French tax office defines the tax treatment of the two types of annuity (rente viagere):
They also define retirement pensions as 'revenus de remplacement' and separately define annuities with consideration as 'revenus du patrimoine'. Both of these revenue sources are subject to social charges of course, albeit at different rates.
Certain foreign income may be exempt from social charges, specifically where the individual is not 'a la charge' of an obligatory health insurance scheme (ie, holders of E-forms or those using private health insurance). The criteria for exemption is set out in tax guidance note 2041GG which states that the exemption applies to 'revenus d’activité et de remplacement étrangere' (foreign salaries and pensions). There is no mention of any exemption for 'revenus de patrimoine', ie, annuities for consideration.
The issue would then appear to be whether a UK annuity with consideration (purchased as a result of either individual contributions or through an employment based defined contribution scheme) can be exceptionally treated as a foreign pension rather than a 'rente viagere de titre onereux', in order to qualify for exemption from social charges. However, despite extensive searching, I have so far been unable to find any other official tax reference which indicates that such an annuity held by a UK expat can be treated differently to a similar annuity held by a French taxpayer. Neither, it seems, have all the professional tax experts on the various French property websites….
The only remaining option would be to seek a ruling from the direction generale des impots. However, if as I suspect, this should prove to be unfavourable, then it would essentially overrule any ad hoc local tax office interpretation (probably based on ignorance or misunderstanding) which might have turned out to be more advantageous.
On that basis, we have amended the FAQ to recommend that people seek advice on their own specific circumstances, in writing, from their local tax office.
Thank you for going to so much trouble, SD. I am sticking to the rente viagere for the OH's annuity because I think that is the correct designation.
Thanks again.
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