Business and Finance

Ask Amanda

by Amanda Johnson

Amanda, I have been living in France since 2006 and I think I should be looking at what I can do to ensure that I have pension income when I retire? Where do I start looking?

This is a question that recently came up after talking with friends who, like me, are loving the work-life balance living in France and are still a way from retirement. We are a generation who moved out of the “rat race” and started a new adventure for ourselves and families in France! Smaller or no mortgage payments, older cars, lunch for 16 Euros including wine and local holidays (we do after all live in one of the most beautiful parts of France, so no need to travel far!). We are, however, a generation not currently paying into the UK National Insurance contribution scheme and as such cannot expect to receive a full UK state pension upon retirement, so we need to look ahead to ensure our idyllic life continues when we retire. Your first point of call is to find out what you have already in place. If you have worked in the UK then you will need to obtain a pension forecast and this can be done by logging onto www.gov.uk . On the same website there is also a pension tracing service that you can contact to find out if you have any pensions elsewhere in the UK. For French pensions you will need to contact either your employer or if you are self-employed www.lassuranceretraite.fr , or you can do a simulation and look at your contribution history on www.info-retraite.fr . Once you have all this information, please feel free to contact me. I do not have a magic wand, but I do have the experience and tools to help you plan for a better retirement and let us face it, we still have time to do something about it. I know how hard it is to run a business in France and I know that if you pick up the phone to call me, I can help you.

Looking for an English speaking business in France?

Find one on Whether you want to register for our newsletter, attend one of our roadshow events or speak to me directly, please get in touch. We do not charge for our financial planning reviews, reports, or recommendations.

Amanda Johnson Tel: 05 49 98 97 46 or 06 73 27 25 43 E-mail: amanda.johnson@spectrum-ifa.com www.spectrum-ifa.com/amanda-johnson

Amanda Johnson

Tel: 05 49 98 97 46

amanda.johnson@spectrum-ifa.com

With Care, You Prosper

TSG Insurance Services S.A.R.L. • Siège Social: 34 Bd des Italiens, 75009 Paris • R.C.S. Paris B 447 609 108 (2003B04384) « Société de Courtage d’assurances » « Intermédiaire en opération de Banque et Services de Paiement » Numéro d’immatriculation 07 025 332 – www.orias.fr « Conseiller en investissements financiers », référencé sous le numéro E002440 par ANACOFI-CIF, association agréée par l’Autorité des Marchés Financiers »

INCOME TAX FORMS 2021

Oh no! It is that time of the year again when you have to fill in your income tax form. It’s all in French and there is lots of pages and boxes to fill in! And they may have changed it again!

Well, worry not, help is at hand. I will try to explain it to you and make it simple. I will only cover the most common revenues so for more technical information, contact me directly. lycee, etc or doing some work on your house related to saving energy and ecology. Note that this year, the box for employing a gardener or cleaner, giving to charity is on the normal 2042.

1) Changes

I have not noticed any so good news.

2) Important dates:

You have to declare your revenue for the year 2021 (January 1st to 31st of December). However, the tax office accepts that you use the revenue corresponding to the UK tax year.

You can start filling the forms online (only if it is NOT the first time) from the 7th of April and until the 24th of May 2022 for Departments 1 to 19 (Charente is 16), 31st of May 2022 for Departments 20 to 49 and 8th of June 2022 for Departments 50 and above (Deux Sevres is 79 and Vienne 86). Deadline to send or deposit your paper tax form is the 19th of May 2022. The result (the bill !) is called Avis d’ imposition and is sent to you from mid-August. Note that in September 2022, the French government will then readjust the amount that they take out of your current account Monthly according to what you have filled in (so more or less or even reimburse you if you had less income than 2020). Or change the % tax on your salary if you are an employee.

3) What forms and how do you fill them in:

The 2042 is the blue form that everybody has to fill in and it is on this form that you report what you have filled in on other forms. But there are different versions of the 2042:

2042: This is the normal blue 2042 form that everyone has to fill in - no exception. Check or fill in the information on page 1 (name, address, etc). On page 2, check or fill in the information asked for (marital status, etc) and make sure it is correct as they can give you allowances or discount (invalidity, number of children living with you, etc).

2042RICI: This is the form on which you report things that give you tax credits such as having kids at college, 2042C: This is the form to have if you are under the French health system via an S1 (you are receiving a state pension).

You need to tick box 8SH (declarant 1) and/or 8SI (declarant 2) to avoid paying Social charges on your interest. Box 8TK which was on the last page on the normal 2042 before is now on this form. This is the box that people with government pension or UK rental need to tick. You can also find box 8VL which is the 17.7% tax credit on your dividends. Those boxes are on the last page of form 2042-C.

2042C Pro: If you are self-employed in France, this is where you fill in your professional revenue. This is also the form used to declare revenues from Gites or chambre d’hôtes nonprofessional. 2044: This is the form to fill in if your rental income is superior to 15 000 euros per year. 2047: This is the purple form (or pink) on which you enter your revenue from abroad. It is better if you start with this one and then report the result on the other forms. Here is how to do it:

Enter all your pension revenues (even those from civil servant that are taxed in the UK) on page 1, section 1 in the box called « Pensions, retraites, rentes”. Be careful, you now must tick the box stating if the pension is public (ex-civil servant) or Privé (private and state pension/ old age). So, if you have both, tick both boxes. You then have to report pensions to the pension section on the 2042, page 3, section 1, line 1AM (or 1BM for declarant 2) for pensions taxed in France (state pension and private pensions) and line 1AL (or 1BL for declarant 2) for pensions from UK government employees such as teachers, civil servant, military, NHS, etc). In section 2, on page 2 is where you put the interest you earned on savings in the UK. And yes, ISAs and Premium bonds are taxable in France as you are French resident! So, you have to fill them in at the bottom of page 2 in the box 230 “intérêts”. Enter the country of origin, then you write the amount on line 2TR, line 252.

Then you report the amount in line 2TR, page 3, section 2 of the 2042.

You also need to tick box 2OP on form 2042, page 3 if you want the interest to be taxed according to the rest of your income and not at 12.8% flat tax.

In section 4, you enter the revenues from house rental abroad. Then report on section 6 to get the tax credit (because it is taxed in the UK) and report on line4BE and 4BK, section 4 of the 2042. If revenues from rental are > 15000 euro, you have to fill in the 2044 form and report the figures on line 4BA and 4BL on form 2042. In section 6, you put the revenue from government employees pension (military, police, NHS, civil servant, etc) and rental income from property in the UK (those will always be taxed in the UK whether you are French resident or not). Then you report the amount in line 8TK, last page of the 2042C. This is because those revenues/ income get a tax credit in France equivalent to what the tax would be on it in France as they are taxed in the UK. You must enter the gross amount (before tax for pensions or expenses for rental).

4) Help

A complete guide on how to fill in your tax form online is on our web site:

https://bh-assurances.fr/taxes/ if you can’t find it, email me!!

If you are one of my customers, you are entitled to free help in 2 of our offices (no appointments, just turn up):

- Chasseneuil sur Bonnieure on Thursday the 12th of May (all day apart from 12-2pm-my lunch) - Ruffec on Tuesday the 10h of May (all day apart from 12-2pm-my lunch)

3916: you have a bank account outside France, then you have to declare it on that form (section1 and 4). One form per account. Or if you have a lot, on a blank A4 paper. Don’t forget to date and sign the forms!! If it is your first, join a RIB and copy of your passport. Please make sure you have all the figures ready and the relevant forms (you can get them from your local tax office or online) when you come to see me. Otherwise I get very grumpy!

The exchange rate for 2021 is 1.16 (that is the average of last year). You can get another rate from your local tax office, use theirs if it is lower than 1.16! Note that when you ask the official Paris tax office they tell you to use the rate from the “banque de France” on the day you got paid! Or use the average of the year.

If your pension has been directly transferred to your French bank account, just add up all the figures of last year as long as it is a gross amount (not taxed at source). And remember to check out our web site www.bh-assurances.fr/en for all my previous articles and register to receive our monthly Newsletter. You can also follow us on Facebook: “Allianz Jacques Boulesteix et Romain Lesterpt” And don’t hesitate to contact me for any other information or quote on subject such as Funeral cover, inheritance law, investments, car, house, professional and top up health insurance, etc…

No Orias: 07004255 Visit our web site

www.bh-assurances.fr

BH Assurances

22 rue Jean Jaures 16700 Ruffec

Isabelle Want

Tel : 05 45 31 01 61 Mob : 06 17 30 39 11 Email : isabelle.want@bh-assurances.fr

How does inflation impact your retirement savings?

by Catrina Ogilvie, Blevins Franks

With inflation surging in France, the EU and UK, now is the time to review your savings and investments to establish if they are suitably structured to provide protection from this threat. Even low levels of inflation can erode your spending power over time and retirees need to plan for this. Inflation for the Eurozone as a whole has been hitting new records this year. France tends to have lower inflation than the average, but it has been climbing here too. It was a flat 0% in December 2020 before hitting 3.4% in December then 4.5% in March (estimated). UK inflation has been rising at its fastest pace for 30 years. Much of the initial inflation surge was caused by factors relating to the pandemic and economies re-opening after lockdowns, and was expected to be temporary. Electricity prices had also risen sharply. The crisis in Ukraine then introduced new uncertainty to the outlook; in particular energy prices are expected to stay higher for longer now.

Protecting your retirement savings You cannot just consider inflation rates on their own, you need to compare them to your earnings. If your savings generate a lower return than inflation, the real value of your money is falling and your income will buy less than it used to. Put very simply, and ignoring the impact of compounding, if your bank account pays 1% interest but inflation is 2%, after 10 years you will have 10% more money, but goods and services will cost 20% more. In real terms, you’ll effectively be 10% poorer. Official figures are based on a representative basket of goods and rarely reflects our own personal inflation rate. As an illustration, a personal annual rate of 4% would reduce the spending power of 100,000 to around 67,000 after 10 years; after 20 years it will have lost around 55% of its value. To generate returns that outstrip the rising cost of living, you need to invest in assets that historically generate returns in excess of inflation over time. Work with a wealth management adviser to reduce risk and follow a disciplined investment process: • Establish your goals and time horizon. • Determine your attitude to objectively. • Construct a suitable, well-diversified portfolio to achieve goals. • Use quality investment managers. • Review your portfolio annually to keep it on track. • Be patient and stick with your plan – it is time in the market, not timing the market, that is likely to help you achieve your longer-term goals. Holding your portfolio within an arrangement which is tax-efficient and compliant in France will help protect your savings from both inflation and taxation. This article should not be construed as providing any personalised investment advice. Keep up to date on the financial issues that may affect you on the Blevins Franks news page at www.blevinsfranks.com

Are your savings working well for your retirement?

At Blevins Franks, we have over 45 years of experience managing our clients’ capital in France. Our local advisers will be happy to review how you hold your savings and investments and discuss ways to help them work harder for you. Our recommendations will be based around your specific circumstances, needs and risk tolerance, and designed to be tax-efficient. We then regularly review your financial planning, giving you peace of mind that it is all up to date.

Talk to the people who know

05 49 75 07 24

niort@blevinsfranks.com

www.blevinsfranks.com

077-fr INTERNATIONAL TAX ADVICE • INVESTMENTS • ESTATE PLANNING • PENSIONS

Blevins Franks Group is represented in France by the following companies: Blevins Franks Wealth Management Limited (BFWML) and Blevins Franks France SASU (BFF). BFWML is authorised and regulated by the Malta Financial Services Authority, registered number C 92917. Authorised to conduct investment services under the Investment Services Act and authorised to carry out insurance intermediary activities under the Insurance Distribution Act. Where advice is provided outside of Malta via the Insurance Distribution Directive or the Markets in Financial Instruments Directive II, the applicable regulatory system differs in some respects from that of Malta. BFWML also provides taxation advice; its tax advisers are fully qualified tax specialists. Blevins Franks France SASU (BFF), is registered with ORIAS, registered number 07 027 475, and authorised as ‘Conseil en Investissements Financiers’ and ‘Courtiers d’Assurance’ Category B (register can be consulted on www.orias.fr). Member of ANACOFI-CIF. BFF’s registered office: 1 rue Pablo Neruda, 33140 Villenave d’Ornon – RCS BX 498 800 465 APE 6622Z. Garantie Financière et Assurance de Responsabilité Civile Professionnelle conformes aux articles L 541-3 du Code Monétaire et Financier and L512-6 and 512-7 du Code des Assurances (assureur MMA). Blevins Franks Trustees Limited is authorised and regulated by the Malta Financial Services Authority for the administration of retirement schemes. This promotion has been approved and issued by BFWML.