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BREXIT

Brits in EU demand to be spared from Brexit ‘train crash’ after May’s deal rejected

Lawmakers in the UK parliament overwhelmingly rejected Theresa May's Brexit deal on Tuesday evening sparking frustration among EU leaders and anger from campaigners for the rights of Britons across Europe who were left furious by the prime minister's statement.

Published: 15 January 2019 22:26 CET
Updated: 16 January 2019 09:58 CET
Brits in EU demand to be spared from Brexit 'train crash' after May's deal rejected
Photo: Oli Scarff/AFP.

A huge majority of UK parliamentarians rejected Theresa May's Brexit deal on Tuesday evening, leaving the government's plan for the UK's exit from the EU in tatters and the future of 1.2 million Brits in Europe shrouded in yet more doubt.

LIVE: Brits in EU demand to be spared from Brexit 'train crash' after May's deal rejected

More than two thirds of MPs voted against the Brexit deal, known as the Withdrawal Agreement. The numbers represented a crushing defeat for the PM: 202 voted in favour of the agreement but a staggering 432 MPs voted against.

The Labour leader Jeremy Corbyn seized on the government's massive defeat, the largest for any government since the 1920s, to call for a vote of no-confidence.

MPs will now debate whether they have confidence in May's government on Wednesday January 16th.

Jean-Claude Juncker returned to Brussels early from meetings in Strasbourg, with May expected to seek a new round of meetings with the EU Commission and EU leaders to thrash out a new deal. 

But Juncker was not hopeful and urged the UK to “clarify its intentions”.

“The risk of a disorderly withdrawal of the UK has increased with this evening's vote. While we do not want this to happen, we will continue our contingency work to help ensure EU is fully prepared,” Juncker said in a statement shortly after the vote. 

Donald Tusk, the European Council president, outlined the Brexit impasse and suggested Brexit should be called off for the good of both the EU and the UK.

Meanwhile the first thoughts of the president of the European Parliament Antonio Tajani was with those Britons in the EU and Europeans in the UK.

“The Brexit vote is bad news. Our first thoughts are with the 3.6 million EU citizens living in the UK and Britons living elsewhere in the EU. They need assurances with regards to their future. We will always stand by their side,” Tajani said.

 

While campaigners for the rights of the 1.2 million Britons in Europe expected the result their anger at being left in limbo by negotiators for 934 days was heightened by May's statement after the defeat.

Kalba Meadows from British in Europe and Remain in France Together told The Local: “There was no great surprise in the result but the sheer hypocrisy in Theresa May's statement afterwards was just breathtaking when she said 'People, particularly EU citizens who have made their home here and UK citizens living in the EU, deserve clarity on these questions as soon as possible.' 

“We've been asking for clarity for over two years now, and neither she nor any of the DExEU Secretaries of State have been willing to meet us.

“I doubt there's one single EU citizen in the UK or UK citizen in the EU that didn't choke on those words. If she really wants to give us certainty, then she must push hard for the ring-fencing of our rights and do so now. It's the only just solution. Human lives must be taken out of this train crash”

The group British in Italy were similarly outraged.

“Following the largest defeat of any government in over 100 years, Theresa May said only that EU citizens in the UK and British nationals in the EU deserve clarity as to their future and their rights.
 
“But she singularly failed to offer any plan as to how to achieve that. 
 
“Our citizens' rights that have already been negotiated and agreed between the UK and EU could so easily be ring-fenced (protected).
 
“Theresa May has offered nothing – not even an extension to the Article 50 period in order to discuss such a proposition with Europe.”
 
Some campaigners said May must now allow the British people to make a decision on what happen's next.
 
Brian Robinson from Brexpats Hear Our Voice told The Local: “The defeat of her personal Brexit deal was comprehensive, despite her frequent threats of the danger of a 'no deal' Brexit. The stark reality is that the clock is still ticking and parliament must urgently restore democracy and respond to the irresistible demands for a People's Vote.”
 
After the vote British in Europe reiterated its call for Theresa May to seek the “ringfencing” of the rights of EU nationals in the Uk and British nationals in the EU. 
 

Citizens' rights campaigners called on Theresa May, who name-checked UK nationals in Europe shortly after the heavy defeat in parliament, to return to Brussels and strike a deal for their rights.

But Theresa May may not be in a position to renegotiate any deal. First of all her government has to survive Wednesday's confidence vote.

It may be a long time yet before Britons in Europe get any clarity over their futures.

Member comments

  1. “Lawmakers in the UK parliament overwhelmingly rejected Theresa May’s Brexit deal on Tuesday evening sparking frustration among EU leaders” – That’s pretty awesome news!

  2. “The numbers represented a crushing defeat for the PM: 202 voted in favour of the agreement but a staggering 432 MPs voted against.

    …the government’s massive defeat, the largest for any government since the 1920s”

    Beautiful! The woman (May) is evil and it’s about time to revolt against her.

  3. Brexit is wrong. The UK must NOT leave the EU. The UK needs the EU and God help us, the EU definitely needs the UK.

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BRITS IN FRANCE

6 pension questions British people should ask before retiring to France

If you're British and thinking of retiring to France there are some important questions to think about before you make the move, and before you make any decisions about your UK pension.

Published: 29 April 2024 08:32 CEST
6 pension questions British people should ask before retiring to France

Retiring to France is a dream for many, but before turning that dream into reality there are some serious financial questions that you need to ask yourself to ensure that your retirement is a financially comfortable one.

For most retirees, their main or only income will be a UK pension, so it’s important that you understand how your pension will work once you make the move. 

There are some specific rules and restrictions on taking pensions out of the UK, while there is also the question of how UK pensions interact with the French tax system.

Financial adviser, Maeve Hoffman, from Spectrum IFA Group, emphasised that people should not take these decisions lightly, telling The Local: “Figuring out what to do with your pension should be part of your wider financial plans for your life.

“This may be your most important asset, besides your home, and the best answer for what to do with your pension is highly individual. There are no sweeping generalisations when it comes to advice on private pensions. Everyone’s situation is different,” she said.

This article is intended as an overview of how the system works for UK pensioners and is not intended as a substitute for individual financial advice. The article is aimed at people who have worked most or all of their career in the UK and then intend to retire in France – the situation is slightly different for people who work in France and then retire here.

You can find an overview on French tax rules for pensions HERE.

Long-term or short-term

The first thing you need to carefully consider is whether or not your move to France will be for the long-term or short-term. 

When it comes to your UK pension, there are some options that may be advantageous for French residents looking to stay here permanently, but they could make your life very complicated if you end up returning to the UK in the future. 

Do not be afraid to ask yourself the tough questions – is there any chance you will have grandchildren in the future that you will want to be geographically close to? Have you ever spent a significant time in France, aside from short holidays? Do you have roots in France, such as friends, family or a home? If your health deteriorates, will you want to be cared for in France or the UK?

If are unsure about the answers to these questions, then take some time to really think about them. There are alternatives to permanently moving to France if you are unsure – for example, you could spend a few months a year here on a short-term visitor’s visa.

READ MORE: Reader question: Can I retire to France and open a gîte?

Understanding the different tax rules

British retirees should be aware that the UK and France have very different tax systems.

Once you become a tax resident in France, you have to file a yearly declaration, including your global income. The country that gets to tax that income is determined based on the tax treaty between the UK and France, which seeks to eliminate double-taxation. 

READ MORE: EXPLAINED: The rules on tax residency in France

As for your UK-based pension, the treaty states that if you have a UK government or civil service pension (eg a state school teachers’ pension), then this will remain taxable only in the UK. Some old NHS pensions were considered ‘government pensions’, but modern ones might not be. You can check if your pension is classified as ‘government’ here.

You still have to declare this income to the French tax authorities, but you will not be subject to tax in France on it. That being said, it will count towards your total household income, and could end up pushing you into a higher tax bracket which is something you should carefully consider, particularly if you want to take a large sum at once. 

The same is not true of private pensions: these are taxed in France, not the UK, as soon as you become a tax resident here. Confusingly, the UK state pension is also considered a private pension, even though it is paid by the government.

You can find a complete guide to how UK pensions are taxed in France HERE.

As a result, you will want to think about whether your previous plans for your private pension were only advantageous to you as a UK resident. Once you become a French tax resident, they could have unforeseen implications.

You can find more information about tax rates in our tax guide. 

Get reliable, expert financial advice before doing anything

If you have decided you want to be in France permanently, then you will need some expert tax and pension advice – but you need to be careful who you take advice from, this is a highly specialist area and it’s unlikely that high street financial advisers will have the knowledge that you need. 

Brexit has also made getting financial advice more complicated, with fewer experts available.

Maeve told us: “Because of Brexit, you cannot use a UK-based financial adviser anymore – you have to use an EU-registered one. This has made things more complicated. When picking an adviser, seek out someone who has expertise on the local taxation rules in France. They should also be regulated with the financial regulator where you live and where they work.” 

It can be especially complicated to parse out who you can and cannot take advice from – for example, some UK-based advisers have continued to give advice to EU-based clients, even though this can be particularly risky if the investments they recommend do not follow EU regulations.

There are also expat-oriented financial advice services that are located outside of France, but seek to offer tax advice to people in France.

She added: “Be smart and sensible. If you choose an adviser in Dubai or Spain for example, you will now be adding another regulatory organisation into the mix, plus another language.

“There are free, government-based services in the UK that can help you understand your private pension – Pension Wise and Money Helper. Before doing anything, you should consult the free services. Any financial adviser worth their salt would recommend this too. 

“These services have begun to have longer wait times, so be sure to book well in advance of when you plan to draw from your pension.”

Deciding whether to transfer your pension

Another question that is important for Brits to think about is whether or not to transfer their pension into either a UK-based SIPP for non-residents, or a QROPS (Qualifying Recognised Overseas Pension Schemes).

The SIPP will keep your pension in the UK, while the QROPS moves it out of the UK, to Malta specifically. 

These options can be helpful for French residents, but you need to familiarise yourself with their benefits and drawbacks.

“The QROPS is not for someone who is unsure of their future in France, as if you return to the UK within five years of the pension transfer HMRC will seek their tax back as if it was a full encashment,” Maeve said.

In France, a QROPS is considered a trust, you may also have additional reporting requirements to fill out along with your annual declaration (more info here).

You should beware of scams on this subject, as the post-Brexit period saw many scammers seeking to persuade Brits that it was now mandatory to transfer their UK pension – always be wary of any cold-calling or unsolicited financial advice.

READ MORE: Ask the expert: How to avoid pension scams when you retire to France

Determining how you will want to draw from your pension

The next question is how you want to receive your pension – either as regular income or as a lump sum. The option that you chose will have tax implications in France.

If you receive it as a regular income, when doing your yearly French tax declaration, you will add up your pension income for that year and you will be taxed at the normal marginal rates for income (the barème). These rates go up to 45 percent (for the highest earners only) plus social charges if they apply (more on this below).

Pension income can also benefit from a 10 percent tax deduction, as long as it does not exceed €4,123 or fall below €422 per household.

Lump-sums are more complicated. Technically, French tax authorities would allow a return of once off pension capital to be taxed at a flat rate of 7.5 percent. 

But in reality, Hoffman explained that anyone seeking to do this would need the express, written confirmation from French tax authorities that this rate will be applied.

She also explained that the type of private pension matters when seeking to get the lump-sum flat rate.

“There are plenty of different types of private pensions in the UK, but the old ‘defined benefit schemes’ have been the gold-plated standard. These are the types of pensions that give you a portion of your salary for the rest of your life. 

“In principle, you should be able to take out lump-sum of 25 percent of your ‘defined benefit scheme’ pension and be taxed at the 7.5 percent flat-rate. That being said, some people get refused, so you cannot make any assumptions and you need clarification from the French tax office.

“As for all of the other types of private pensions in the UK, like the money purchase or personal pension schemes, these are considered to be ‘funds’. If you want to benefit from the lump-sum then you would have to take out the entire pension. You would not be able to just take out 25 percent and get the lump-sum rate.

“For anyone considering taking their whole pension and seeking to use the 7.5 percent rate there are conditions to be met, so I advise people to write to their French tax office and explain their own situation in detail. Be sure to clarify the tax rate you are seeking to have applied and ask what documents they would need from your UK pension company to confirm that the contributions to this pension have been tax deductible.”

Healthcare and social charges

Deductions in France come in two types – impôts (income taxes) and prélèvements sociaux (social charges).

People who retire to France (and have never worked in France) and have already reached the state pension age can apply for the S1 – this means that the UK continues to pay for their healthcare costs and they would not be charged prélèvements sociaux. Non-working spouses of an S1 holder can also benefit from this.

People who take early retirement and make the move before they reach state pension age may have to pay social charges in addition to taxes until they reach the state pension age and can apply for their S1. However, there are several exemptions to social charges, so even if you expect a bill, you may not end up being charged. More information in our guide.

Social charges help pay for a lot of services from the French government, including access to healthcare. In France, you can access the state healthcare system (and get a carte vitale) after three months of residency. 

READ MORE: Why you might get an unexpected French health bill
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