Ron - Several years ago I legimately set my payments for CMU against revenue without any objection from the fisc. If anyone is interested I think I could retrieve the relevant entries/boxes. The files are archived because I have moved on, as they say (older & maybe wiser!)
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parsnips wrote: 1. Govt pension should first have the UK tax deducted , then have the NET transferred to the 2042 box TI, and then be given the 10% standard deduction before being used for the calculation of the taux effectif----this the Conciliateur agreed fully.
Parsnips .............
That's more than helpful and the 1st time that I've really understood how govt pensions are dealt with here.
I can feel an appeal coming on!
Thanks.
Ron Avery wrote:Sounds like common sense prevailed in this case. Did you get a ruling on whether the CMU payments could be entered as a legitimate expense against revenue on the tax form for inactifs? Did the man from the Charente ever get a ruling, or the Connexion explain why it was wrong in their opinion?
A couple of quick questions....
1. Govt pension should first have the UK tax deducted , then have the NET transferred to the 2042 box TI, and then be given the 10% standard deduction before being used for the calculation of the taux effectif----this the Conciliateur agreed fully.
The 2047 instructs you to deduct the UK tax before transferring the net amount to the 2042 box TI, so no change there. However, box TI does not differentiate pension income which may be subject to the standard 10% allowance, so how did the concilliateur suggest this deduction be applied to this specific tranche of income?
2; UK rents , of course should not be taxed in France, but also I argued that as the rents were within the limits they should be given the benefit "en plein droit" of the microfoncier regime, but that the tax paid in the UK should be regarded as covered by the 30% standard deduction (as a charge). This the Conciliateur also agreed fully.
UK rents are also declared net of UK tax in box TI so why would the tax paid need to be covered by the 30% standard deduction? Again, how would the standard deduction be applied in practice to this income?
Sunday Driver wrote:The 2047 instructs you to deduct the UK tax before transferring the net amount to the 2042 box TI, so no change there. However, box TI does not differentiate pension income which may be subject to the standard 10% allowance, so how did the concilliateur suggest this deduction be applied to this specific tranche of income?
I suggest the answer is that it doesn't need to be.
The taux effectif is calculated by doing two separate tax computations: one using income taxable only in France, and one using global income. The tax on the global income is calculated "notionally" as though it was all taxable in France. So in that "notional" calculation, any deductions - including the 10% - are applied just as they would be if the relevant income were purely French. They don't need to be calculated for specific bits of income.
So I think item 1 in Parsnips' answer is correct, although it might be better to clarify that these calculations are done by the tax office, not by the taxpayer. The 10% has no effect on the numbers reported on forms 2047 or 2042.
I don't have any experience with rental income, although I suspect that a similar principle would apply to any deductions.
allanb wrote: Sunday Driver wrote:The 2047 instructs you to deduct the UK tax before transferring the net amount to the 2042 box TI, so no change there. However, box TI does not differentiate pension income which may be subject to the standard 10% allowance, so how did the concilliateur suggest this deduction be applied to this specific tranche of income? I suggest the answer is that it doesn't need to be. The taux effectif is calculated by doing two separate tax computations: one using income taxable only in France, and one using global income. The tax on the global income is calculated "notionally" as though it was all taxable in France. So in that "notional" calculation, any deductions - including the 10% - are applied just as they would be if the relevant income were purely French. They don't need to be calculated for specific bits of income. So I think item 1 in Parsnips' answer is correct, although it might be better to clarify that these calculations are done by the tax office, not by the taxpayer. The 10% has no effect on the numbers reported on forms 2047 or 2042. I don't have any experience with rental income, although I suspect that a similar principle would apply to any deductions.
My point was how would the system identify whether or not an amount entered in box TI actually related to pension income and therefore apply the 10% deduction within the "notional" calculation? The system recognises amounts entered in boxes AS and BS as being pension income and does the necessary allowance calculation, but I don't see how this can happen with box TI because it's not a pension specific field. If the box TI total comprised more than one income source and included non-pension income, then how would the system know how much of that total to apply the 10% pension allowance to?
Bear in mind also that the on-line system is designed to process declarations automatically without any tax office intervention....
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