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Article 50: The fight against Brexit starts now, say Brits in France

With the UK government triggering Article 50 on Wednesday to begin its divorce from the EU, many say it’s time for the anti-Brexit brigade to give up the fight. But many pro-EU Brits in France say their battle is only just beginning.

Published: 29 March 2017 23:14 CEST

Article 50: The fight against Brexit starts now, say Brits in France

Photo: AFP

After the referendum vote, the shock, the recriminations, the bitter arguments and accusations, the high court rulings and the failed amendments in parliament, the UK finally began its divorce proceedings from the EU on Wednesday.

The British Prime Minister Theresa May sent Donald Tusk, the president of the European Council official notice of the UK’s desire to take a step into the unknown by leaving the European Union, which it joined back in 1973.

For many, including Theresa May herself the momentous triggering of Article 50 should act as a signal for all those others who railed against the referendum result to lay down their arms and “unite” on the arduous journey that lies ahead.

But many Brits in France, who along with EU citizens living in the UK, stand the most to lose if Brexit negotiations turn sour, rejected her plea saying the fight is only just beginning.

Their message on Wednesday was “It's not over yet”.

“Today marks the end of the ‘phoney war’ and the beginning of a whole new Battle of Britain,” said Toulouse-based Ian Hayes-Fry from the Remain in France Together online community, that was set up after Brexit to fight for the rights of Brits in France.

Kalba Meadows, who runs the group and lives in the Ariege department of south west France added: “Today is the beginning and not the end. This is where the real fight starts. And now we have something to concrete to fight against.”

Remain in France Together is just one of several pressure groups that represents the hundreds of thousands of Britain living across the EU that have united to fight their corner since last June's referendum.

The group counts some 5,500 members and its chief aim, whatever Theresa May might say, is to prevent Brexit from happening.

Many believe now that Article 50 has been triggered and the fraught negotiations begin it will become clear that the UK is best served by remaining in the EU.

“I will never give up the fight,” said Sandra Jones. “This catastrophic decision by the governing party to go ahead with leaving the EU when there are no known benefits to the UK makes me very angry and anxious for the future.”

Groups representing British citizens living in Europe are not ready to rely on Theresa May and the UK government to deliver the best deal to protect their rights and have vowed to step up their campaigning.

“This is not the time to give up the fight against Brexit,” Christopher Chantrey, chairman of the British Community Committee of France told The Local.

“All we are hearing is the same old promises and pipe dreams. It is becoming clearer and clearer that no deal would be far worse than a bad deal – but nobody in government will say so. The struggle continues.

“British in Europe www.britishineurope.org, the coalition of a dozen or so UK citizens' groups in Europe is stepping up its lobbying efforts in London, Brussels and key member state capital cities.”

This week representatives of British in Europe met with the EU’s chief Brexit negotiator Michel Barnier to press their case that the UK and Brussels must resolve the rights of Brits living in the EU and European citizens living in Britain.

So far the UK has withstood pressure to show the lead by guaranteeing the rights of those EU nationals living in Britain before negotiations began. Barnier suggested the limbo may go on until late 2018, by which time a deal will hopefully have been struck.

Other acts of resistance by Bremainers living in France and throughout the EU include signing numerous petitions including a vote of no confidence in Theresa May because of her handling of Brexit and one on the site Change.org titled Article 50 not in my name.

Letters have been written to Theresa May demanding that she guarantee health rights for British citizens abroad as well as pension uprating, which would prevent them from being frozens as they are in some for British nationals living in some countries.

“We can't stop voicing our opinions,” said Susan King-Bradshaw. “So much depends on what deals are going to be made such as our rights to stay in a country which we legally moved to. How can we become illegals when we have done nothing wrong. I will be fighting for the rights of my family, my children, two of whom were born in France.”

Brits in the EU are also being asked to write personally to Donald Tusk to give him notice of their dissent against Article 50.

The standard letter reads: “As a British national and citizen of the EU, I hereby notify the Council of my dissent from and objections to this act of the British government. For the avoidance of doubt, I do not consent to being deprived of my European Citizenship.”

“Contrary to its claim, the British government does not have a democratic mandate from the people of the UK to leave the EU,” the letter to Tusk reads.

One of the many bones of contention opponents of Brexit have with Britain leaving the EU is that they believe the referendum was not democratic, because many long term expats were denied the vote and they also claim voters were misinformed and lied to, pointing to the famous claim by Brexiteers that the UK would save £350 million by leaving the EU could then be given to the NHS.

“Now the Brexiteers will start to find out that this is not going to be easy and the impact of any type of Brexit will negatively affect them. That the lies told to win their votes will be exposed,” said Emily Trefier from RIFT.

So while the Daily Mail and Brexiteers may have been celebrating “Freedom” on Wednesday as though the battle had been won, peace is unlikely to be declared anytime soon.

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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.

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.

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.

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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