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French Finance
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 12/05/2008, 14:29
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ams
Joined on 07/08/2007
Posts 379
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Have you looked at assurance de vie, competely income tax, CGT, social assurance and cmu free whilst within the framework of the contract. At the end of 8 years the tax rate is substantially reduced, (7.5%) the 11% still remains and no CMU de base. However for a married couple the first €9,200 is free from all taxes.
ams
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12/05/2008, 15:41
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Benjamin
Joined on 21/08/2005
Vendée South
Posts 1,815
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Thanks for the clarification Jackie; a sort of what if? scenario then?
As I said in my earlier posting the products that you mention are not interchangeable. You purchase an annuity with a fund which you have built up in a private pension. It's not possible to just decide to put it into some other form of savings scheme except in special circumstances which means you would lose a lump of the fund in tax at the outset.
The other option with a private pension fund is to take what is termed income drawdown which means that you can take an income (around a maximum of 5% of the fund value) without purchasing an annuity but you would need a fund of at least £ 100,000 to do this.
There have been a lot of changes in private pension legislation in the last couple of years and I'm not fully up to date so it's important for anyone contemplating their options to take appropriate professional advice.
Benjamin
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12/05/2008, 15:54
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Sunday Driver
 
Joined on 07/10/2005
Deux Sevres (79)
Posts 3,172
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Jackie
I don't understand why you say it would be really helpful if the Tax FAQ gave a list of common income sources and where each is declared on the forms. If you've actually taken the time to read the FAQ, then you'll see that it does exactly that......
That's all it was designed to do.
Anyone wanting information or tax guidance which falls outside the scope of the FAQ is at liberty to ask specific questions in the main body of the finance section.
Waddya mean it's only Saturday......
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12/05/2008, 17:23
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freddy
Joined on 21/03/2007
Posts 52
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Benjamin
Whilst you are probably right in practice - one thing you say about annuities is incorrect.
Annuities are normally purchased with pension funds but there is nothing to stop you using other funds to buy an annuity. For example if your great aunt dies leaves you a lump sum there is nothing to stop you buying an annuity with this. This is not frequently done but may be tax efficient for french tax purposes for all I know.
This wouldn't do for me (even if I had the money!) due to loss of control of the capital and the worry that I might get knocked over by a bus next week etc. but it might work for some.
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12/05/2008, 19:12
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Benjamin
Joined on 21/08/2005
Vendée South
Posts 1,815
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Agreed freddy, but without the up front tax relief that private pension contributions attract, the purchase of an annuity with capital from any other source doesn't make any financial sense whatsoever. Fortunately successive Governments are tinkering with private pension legislation thus at least delaying the need to use funds to purchase an annuity.
As you say with annuity rates roughgly equal to deposit account rates on the High Street and the retention of control of your capital (the most important bit as far as I personally am concerned) it would be difficult to make a compelling argument for purchasing an annuity with great aunt's legacy.
Benjamin
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13/05/2008, 11:19
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Jackie
Joined on 17/01/2006
Deux Sevres France
Posts 212
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Yes you are quite right Sunday Driver and my only excuse is that I was, and still am, in a state of confusion when I wrote that. However it would be helpful to have premium bond prizes and sale of units from something like a CMI Premier Bond included in the helpful Tax FAQS. Siddalls recommended the CMI bond to us when we consulted them before coming to France so chances are that others will have similar arrangements and the information would be of help to them too.
Re your comments in my other recent post about Tax FAQS:
As explained in the FAQ, foreign earnings and pensions taxable in France (ie, your non-teaching pensions) are subject to CRDS except where you hold an E-form (or have private insurance). Assuming you were registered for CMU prior to 30/06/2007, then you enter the sum of your non teaching pensions for the whole year in boxes AS/BS (that's for the tax bit), then split the total into that received prior to 30/06/2007 and that received after. The pre June amount is additionally entered in box TL (that generates the CRDS charge due for that slice of income) and the rest goes nowhere because there's no charge applicable.
What about the annuities declared in box BW, should a proportion of those go in TL as well or does having an E121 not give a cessation of CRDS charges on these as well. You have said:
Annuities attract 11% CSG/CRDS/PS on the after relief amount. UK company pensions attract 0,5% CRDS on the total amount. Savings accounts attract 11% CSG/CRDS/PS on the total amount.
so the CRDS rate is different on annuities compared with pensions so I assume you cannot just add it into TL?...........J
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France Forum » Legal and Finan... » French Finance » Re: Annuities
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