Contrary to a recent scaremongering article, those wishing to
transfer their UK pension schemes to France or Italy will not find
their UK funds confiscated. Here are the fears and the facts on
HMRC's delisting of French and Italian ROPS.
This Le Monde Economie article which landed in my
inbox just before the New Year is, in my opinion, scaremongering
and factually inaccurate.
The publication's London correspondent reported in the
"By blocking the transfer of pension funds to France,
the British tax system fuels the anxiousness of expatriates since
the Brexit vote.
"On Wednesday, December 21, Christophe Premat, the
deputy (socialist) of the French abroad for the constituency that
includes the United Kingdom, arrested the secretary of state in
charge of European affairs, Harlem Désir. In a broader
question about the uncertain status of French people living in the
United Kingdom after the Brexit, he was concerned about a recent
decision by the British tax authorities: now they forbid the
transfer to France and Italy of pension funds held in the UK -
unless they accept a 55% tax.
"If it is confirmed, it would be a confiscation pure
and simple money that many have invested for their old days,"
accuses Mr. Premat. The French deputy sees more than a chance of
timing, while the British government has promised to officially
open negotiations on the Brexit by the end of March. "This
decision taken within three months of the application of Article 50
is obviously not innocent," he said. Among some French people
living in the United Kingdom, anxiety is mounting. "I've
been saving for a number of years in the pension fund of my company
and I'm starting to worry about seeing everything go up in
smoke," says Michaël Vincent."
There is no confiscation of pension funds, and
no loss of funds for those looking to transfer, so
Michaël Vincent, don't panic!
Mr Premat might want to look in his own 'back yard'
before making such alarming statements. The French do not allow
French pension funds to be transferred to the UK nor anywhere else.
The UK Pension fund system is considerably more flexible than that
in France. Just try repatriating/transferring your French pension
fund to the UK.
What HMRC has actually done, is look at the French pension fund
system to see if it is in line with the UK rules governing
"recognised overseas pensions" (ROPS). It is not. Rather
like Australia was found to be in 2015 and Canada in 2016, and it
has removed not only France but also Italy from the ROPS list. HMRC
has not removed anything from, nor taxed those nationals' UK
A French national (or anyone else for that matter) retiring in
France can still draw their pension from the UK. He or she can
claim treaty relief under the DTA between France and UK, get a
gross payment from their UK pension fund, declare it to the FISC
and pay French income tax. There is no UK 55% tax. It is only if
you try and transfer your UK pension to a French domestic pension
that there will be a tax charge. And frankly, as there is a scheme
sanction charge on a UK pension making such a transfer, it is not
going to happen.
Alternatively, if an individual does not want to leave their
pension in the UK, there are other jurisdictions that UK pensions
can be moved to, such as Malta. In any case, suitable advice should
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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