You have lived in France since Brexit, your personal pension pot (often a SIPP, a self-invested personal pension) is still in Britain, and two questions keep you awake. Should you move the pot to France, perhaps through a QROPS (a qualifying recognised overseas pension scheme), or leave it where it is? And when you take the famous 25% tax-free lump sum (the pension commencement lump sum), will France really let you keep it tax-free? The short answers are uncomfortable. A transfer to a QROPS can trigger a 25% British exit charge on top of French tax, and the 25% lump sum that is tax-free in Britain is usually taxable in France, although a little-known 7.5% flat-rate option can rescue the position. This guide explains, for a British reader with no French legal training, how the France-Britain double tax treaty (the convention fiscale) divides taxing rights, what the French tax code (the Code g\u00e9n\u00e9ral des imp\u00f4ts) says about pensions paid as capital, which British charges apply before France even enters the picture, and how to challenge a bill that taxes you twice. Every French term is explained the first time it appears, and every decisive statement is anchored to the exact official text.<\/p>\n
A QROPS is a foreign pension scheme that Britain’s tax authority, HM Revenue and Customs, recognises as eligible to receive transfers from British registered pension schemes without the transfer itself counting as an unauthorised payment. After Brexit, salesmen across the Dordogne, the Var and Paris continue to promote QROPS established in Malta or Gibraltar to British residents in France, presenting the transfer as a way to escape British rules and to hold the pot in euros. Before signing anything, you need to understand three layers of risk: the British exit charge, the five-year clawback window, and the French tax treatment of the receiving scheme.<\/p>\n
The British layer comes first, because it bites at the moment of transfer. HM Revenue and Customs guidance states the position bluntly:<\/p>\n
HM Revenue and Customs guidance on the overseas transfer charge<\/a> provides that certain transfers to and from a QROPS made on or after 9 March 2017 attract a 25% charge computed on the transferred value. Exclusions exist, and you must test them before moving a penny: a transfer is generally excluded where you and the QROPS are resident in the same country, where both are within the European Economic Area, where the QROPS is an occupational scheme, or in a handful of other defined cases described in the official GOV.UK transfer guide<\/a>. A British retiree living in Lyon who moves a SIPP to a Malta QROPS may fall inside an exclusion on day one, but the protection is fragile. The guidance provides for a relevant period of five full tax years running from the original transfer from the registered scheme to the QROPS<\/a>, during which a later event, typically a change of residence, can trigger the 25% charge after the event. Move again, to Spain or back to Britain, inside that window, and the bill can arrive years after you thought the matter was closed. Transfers that miss the QROPS route entirely are punished even harder: payments outside the authorised framework attract the unauthorised payments charge of at least 40% of the amount transferred, plus a possible scheme sanction charge. Never accept a promoter’s assurance that recognised status alone removes any charge. Check the published HM Revenue and Customs list of recognised schemes on the day of transfer, keep the screenshot, and take written confirmation of which exclusion you rely on.<\/p>\n The French layer is where most transfer projects quietly fail. France taxes you because you are a French tax resident, not because the money sits in France. Article 4 B of the Code g\u00e9n\u00e9ral des imp\u00f4ts<\/a> provides that “Sont consid\u00e9r\u00e9es comme ayant leur domicile fiscal en France au sens de l’article 4 A : a. Les personnes qui ont en France leur foyer ou le lieu de leur s\u00e9jour principal”.<\/p>\n Your foyer means your home and family base; if it is in France, you are a French tax resident (a r\u00e9sident fiscal), and France taxes your worldwide pensions, as article 79 of the Code g\u00e9n\u00e9ral des imp\u00f4ts<\/a> confirms: “Les traitements, indemnit\u00e9s, \u00e9moluments, salaires, pensions et rentes viag\u00e8res concourent \u00e0 la formation du revenu global servant de base \u00e0 l’imp\u00f4t sur le revenu. Il en est de m\u00eame des prestations de retraite servies sous forme de capital.” A direct transfer from a SIPP to a QROPS, with no cash passing through your hands, is normally not itself a taxable receipt in France. But the receiving QROPS then becomes the scheme that will pay you, and its future pensions and lump sums will be judged under French rules for foreign-source pensions. The tax administration’s published doctrine, BOI-RSA-PENS-30-10-20 on pensions paid as capital<\/a>, contains a section expressly devoted to benefits from foreign-source contracts with non-deductible contributions, which it redirects toward the regime for foreign investment income (the RPPM, revenus et profits du patrimoine mobilier). The practical lesson is sharp: if your British contributions never gave you French deductions, which is the normal case for years when you were a British taxpayer, you must prove the opposite condition, namely that the contributions were deductible against your taxable income or attached to exempt income in the State that had the right to tax that income, which is Britain. Keep every British P60, every scheme statement showing employer contributions, and every piece of evidence that the contributions attracted British tax relief. Without that file, the 7.5% flat-rate option described in Part II may be refused, and the capital may be pushed toward a harsher regime.<\/p>\n Gibraltar deserves a special warning. British-era guidance still floating online describes Gibraltar as inside the European Union by virtue of Britain, a description that died with Brexit. Do not rely on pre-2021 forum posts or brochures for the overseas transfer charge position of a Gibraltar QROPS. Ask the scheme manager for a current written analysis, cross-check it against the live GOV.UK guidance linked above, and have a French tax lawyer confirm the French side before the transfer. The alternative many British residents in France overlook is to leave the pot in Britain and reorganise the French side instead, for example by funding a French assurance-vie (a life-insurance investment contract, where the sums insured are fixed by the contract<\/a>) out of pension income once it is paid. Products subscribed with French-established insurers are taxed under article 125-0 A of the Code g\u00e9n\u00e9ral des imp\u00f4ts<\/a>: “Les produits attach\u00e9s aux bons ou contrats de capitalisation ainsi qu’aux placements de m\u00eame nature souscrits aupr\u00e8s d’entreprises d’assurance \u00e9tablies en France sont, lors du d\u00e9nouement ou d’un rachat du bon, contrat ou placement et quelle que soit sa date de souscription, soumis \u00e0 l’imp\u00f4t sur le revenu.” That route keeps the pension mechanics British and the savings mechanics French, which is often simpler than moving the pension itself. If you want the detail on how a SIPP left in Britain is taxed year by year in France, read our companion guide on British residents in France with a UK private pension or SIPP<\/a>.<\/p>\n Yes, and for most British residents in France this is the default worth defending. The France-Britain double tax treaty signed on 19 June 2008 and published in France by Decree No. 2010-20 of 7 January 2010 (treaty commentary BOI-INT-CVB-GBR-10<\/a>) gives France, the State where you live, the exclusive right to tax your private pensions. Its pensions article reserves taxation of pensions and similar payments for past employment to the State of residence, subject only to the government-service exception in article 19(2), as explained in the official treaty commentary<\/a>. In plain English: pensions and similar payments for past employment, paid to a resident of one State, are taxable only in that State. If you live in France, France alone taxes your British Airways scheme pension, your SIPP drawdown and your personal pension annuity. Britain should not tax them, and where British tax has been deducted at source you claim it back through the treaty claim procedure rather than accepting it. The administration’s commentary on the treaty linked above confirms this architecture. France asserts taxing rights over non-residents only on the closed list of French-source income in article 164 B of the Code g\u00e9n\u00e9ral des imp\u00f4ts<\/a>, which is why residence under article 4 B is the decisive test. One reservation matters enormously: government-service pensions. The treaty provides that pensions paid by a contracting State for public services, including in the French case payments by public-law bodies, are taxable only in that paying State, with a narrow exception where the recipient is a resident and national of the other State without also holding the paying State’s nationality. A classic Crown-service pension, a British civil-service, armed-forces or police pension, therefore often remains taxable only in Britain even after you retire to France, while a French fonctionnaire pension stays French. Local-government pensions sit on the boundary and need individual analysis, because the treaty wording differs slightly between the two States. Misclassifying a public pension as a private one, or the reverse, is the single most expensive filing error British residents make, so identify the exact legal employer behind every pension before completing your return.<\/p>\n Once France has the taxing right, French domestic machinery takes over. Pensions join your revenu global (your total taxable income) under article 79, then benefit from the 10% allowance (the abattement de 10%) of article 158, 5, a of the Code g\u00e9n\u00e9ral des imp\u00f4ts<\/a>: “Les pensions et retraites font l’objet d’un abattement de 10 % qui ne peut exc\u00e9der 4 439 \u20ac.” The same article adds a floor that protects small pensions: “L’abattement indiqu\u00e9 au deuxi\u00e8me alin\u00e9a ne peut \u00eatre inf\u00e9rieur \u00e0 454 \u20ac, sans pouvoir exc\u00e9der le montant brut des pensions et retraites.” The allowance applies per pensioner in the household (the foyer fiscal), so a couple each drawing a British pension each gets the allowance, within the ceilings. Declare every British pension on the foreign-income return (form 2047) and carry the total to the main return (form 2042); tick the treaty boxes so the pensions are not also offered up to British tax. Readers who want the year-by-year mechanics for the British state pension should read our guide on British residents in France receiving the UK state pension<\/a>.<\/p>\n A Franco-British career raises one more question: does France count your British working years when it calculates your French pension? A 2019 decision of the Cour de cassation shows how courts approach mixed careers. A British national who had worked successively in Britain, France and Monaco obtained a French old-age pension from the Carsat (the regional pension fund) with effect from 1 December 2009, computed on a reduced-rate basis of 32.5%, because his Monaco quarters were not counted. He argued that European free-movement law required totalising all three periods. The Cour de cassation, Second Civil Chamber, 7 November 2019, appeal No. 18-18.344, dismissed the appeal in full and ordered him to pay 3,000 euros under article 700 of the Code of Civil Procedure. The facts predate Brexit, when European coordination regulations still bound Britain, yet the claimant still lost, which shows that totalisation across a non-European-system period is never automatic. Since 1 January 2021 the position is governed by the EU-UK Withdrawal Agreement for rights built up before the end of the transition period, and by its social-security protocol afterwards. If your French pension statement ignores British years, do not assume the fund made a mistake, but do not accept it blindly either: request the detailed calculation (the relev\u00e9 de carri\u00e8re), identify exactly which quarters are missing, and check whether the Withdrawal Agreement or a bilateral instrument covers them before litigating.<\/p>\n This is the shock of the file. In Britain, the pension commencement lump sum, normally 25% of the pot within the authorised allowances, is paid free of British income tax, and most British savers assume the French position mirrors it. It does not. The treaty gives France the taxing right over the lump sum as a pension paid for past employment, and French domestic law expressly pulls capital-form pensions into taxable income: article 79<\/a>, quoted above, ends with the sentence “Il en est de m\u00eame des prestations de retraite servies sous forme de capital.” There is no French equivalent of the British 25% exemption for an ordinary SIPP lump sum. Expect the French tax office to add the sterling amount, converted at the exchange rate on the payment date, to your worldwide income, and to tax it at your marginal rate unless you secure a better option. Two better options exist, and you must test them in order.<\/p>\n The first is the 7.5% flat-rate levy (the pr\u00e9l\u00e8vement lib\u00e9ratoire, literally a discharging levy: once paid, it replaces income tax on that income). Article 163 bis, II of the Code g\u00e9n\u00e9ral des imp\u00f4ts<\/a> provides, word for word, that “Les prestations de retraite vers\u00e9es sous forme de capital imposables conform\u00e9ment au b quinquies du 5 de l’article 158 peuvent, sur demande expresse et irr\u00e9vocable du b\u00e9n\u00e9ficiaire, \u00eatre soumises \u00e0 un pr\u00e9l\u00e8vement au taux de 7,5 % qui lib\u00e8re les revenus auxquels il s’applique de l’imp\u00f4t sur le revenu.” The levy base is generous too, since “Ce pr\u00e9l\u00e8vement est assis sur le montant du capital diminu\u00e9 d’un abattement de 10 %.” But the conditions that follow are strict, and each has destroyed real files, because “Ce pr\u00e9l\u00e8vement est applicable lorsque le versement n’est pas fractionn\u00e9 et que le b\u00e9n\u00e9ficiaire justifie que les cotisations vers\u00e9es durant la phase de constitution des droits, y compris le cas \u00e9ch\u00e9ant par l’employeur, \u00e9taient d\u00e9ductibles de son revenu imposable ou \u00e9taient aff\u00e9rentes \u00e0 un revenu exon\u00e9r\u00e9 dans l’Etat auquel \u00e9tait attribu\u00e9 le droit d’imposer celui-ci.”<\/p>\n Three cumulative tests emerge. First, an express and irrevocable written election (une demande expresse et irr\u00e9vocable): you must actively claim the flat rate on your return; silence means taxation at the progressive scale. Second, a single undivided payment (un versement non fractionn\u00e9): the capital must be paid in one go. Third, proof about the contributions: you must show that during the build-up phase the contributions, including the employer’s, were deductible from your taxable income or related to income that was exempt in the State entitled to tax it, which for a British career means Britain. British higher-rate taxpayers normally satisfy this test precisely because British pensions tax relief made the contributions deductible in Britain, but you must evidence it with scheme certificates and not with bare assertions.<\/p>\n The single-payment condition is the trap most British savers walk into, because British drawdown habits encourage taking the 25% in slices. A November 2024 ruling of the Lyon Administrative Court of Appeal shows the price. A French tax resident who had belonged to the Swiss second pillar (the compulsory occupational scheme) from 1 October 2003 to 30 June 2012 declared Swiss retirement capital of 631,934 euros for 2013 and 207,761 euros for 2014 under the 7.5% option. On audit, the administration withdrew the option and taxed the sums at the progressive scale under articles 79 and 158, plus late interest and the 10% penalty. The court upheld the reassessment, recalling first that the statute offers individual recipients of capital-form retirement benefits who find it advantageous a choice between the progressive income-tax scale and a discharging 7.5% flat levy. It then held that the split payments, spread over two years and across the compulsory and top-up layers, were a fractioned payment within the meaning of the statute, so the claim to the derogatory regime for both payments had to be rejected, and it dismissed the couple’s appeal in full (CAA Lyon, 28 November 2024, No. 22LY01728). The Swiss facts transfer directly to a British file: if you take your 25% in tranches, or spread lump sums across tax years, expect the French administration to cite this exact reasoning. Take the lump sum once, in one payment, in one tax year, after confirming the election wording with your tax office (the service des imp\u00f4ts des particuliers) in advance.<\/p>\n The second possible shelter is narrower: some capital payments are fully exempt from French income tax by statute, notably benefits paid on the exercise of exceptional early-release rights (the facult\u00e9s de rachat exceptionnelles) listed in the Insurance Code. Do not stretch this shelter to an ordinary British lump sum. Its real use in your file is defensive: if the administration tries to add social levies to an exempt capital, the courts push back, as the next section shows. Finally, note the boundary the doctrine draws for foreign contracts whose contributions were never deductible anywhere: the doctrine section cited above redirects those benefits toward the investment-income regime rather than the pensions regime, which can mean flat-tax treatment without the 10% allowance. That classification fight, pensions versus investment income, is technical litigation territory. If your British scheme is unusual, an employer-financed unapproved arrangement, a small-pot trivial commutation, or a transfer from a scheme that never gave relief, get advice before filing rather than choosing the box that looks cheapest.<\/p>\n French tax does not stop at income tax. On top of it come the social levies (the pr\u00e9l\u00e8vements sociaux): the general social contribution (the CSG, contribution sociale g\u00e9n\u00e9ralis\u00e9e), the contribution for the repayment of the social debt (the CRDS, contribution au remboursement de la dette sociale) and, for many pensioners, the solidarity contribution for autonomy (the CASA, contribution additionnelle de solidarit\u00e9 pour l’autonomie). For retirement pensions the headline CSG rate is set by article L. 136-8 of the Social Security Code<\/a>, which states that “Sont assujetties \u00e0 la contribution au taux de 8,3 % les pensions de retraite, et les pensions d’invalidit\u00e9”, with a reduced 3.8% rate for households whose reference income sits between statutory thresholds. The CSG base itself is deliberately wide: as restated by the Cour de cassation from article L. 136-2 of the same code<\/a> in the wording applicable to that case, it takes gross employment and replacement income including pensions with child supplements, together with annuities and replacement income. A lump sum that escapes income tax through an exemption can therefore still attract social levies, which is exactly the fight the Cour de cassation settled in favour of pensioners in 2020. An employee had used his exceptional early-release right to cash in his employer’s top-up pension contract in full in 2017, and the insurer deducted 2,633.02 euros of social levies from the capital. He sued for the money back, and the local court agreed. The insurer appealed, arguing that the income-tax exemption in article 158, 5, b quinquies concerned only the income-tax base and not the CSG, CRDS or health contributions. The Cour de cassation, Second Civil Chamber, 8 October 2020, appeal No. 19-16.078 (Allianz Vie), dismissed the insurer’s appeal outright, holding as a matter of principle that lump sums paid to the holder of a defined-contribution top-up retirement contract who exercises the buy-back right under article L. 132-23, second paragraph, of the Insurance Code fall outside the base of the CSG and CRDS levies on employment and replacement income and outside the health, maternity, disability and death contribution base.<\/p>\n The lesson for a British file is twofold. First, keep income tax and social levies analytically separate: winning on one does not automatically win the other, and losing on one does not automatically lose both. Second, if a French body deducts CSG or CRDS from a capital payment that the statute excludes from those bases, the deduction itself is recoverable through the courts. Readers with an S1 healthcare certificate (the portable document proving you remain covered by the British health system) face an additional layer: S1 holders affiliated to another scheme are outside parts of the French social-levy system built on article L. 160-1 of the Social Security Code<\/a>, under which any person working or stably residing in France is covered for health costs, and the calculations differ between pensions, capital and investment income. The full S1 mechanics are set out in our companion guide on CSG and CRDS on British pensions and the S1 refund route<\/a>, which you should read alongside this article before filing.<\/p>\n Filing correctly is your first line of defence. Declare the lump sum for the year of actual payment, convert sterling at the Bank of France rate on that date, attach the scheme’s P60-style certificate and the British tax voucher if any tax was withheld, and claim the 7.5% election expressly on the return where the form allows it, keeping a copy of everything. If British tax was withheld on a pension the treaty reserves to France, do not deduct it on the French return as if it were French tax: apply for repayment in Britain under the treaty procedure and declare the gross amount in France. If the French assessment that comes back is wrong, challenge it in the French order. Start with a written formal claim (une r\u00e9clamation contentieuse) to your tax office, identifying the exact legal basis: treaty article, income-tax article, contribution evidence, single-payment proof. Courts do correct these files. In March 2023 the Lyon Administrative Court of Appeal cut the French social contributions on a Swiss lump-sum survivor’s pension paid in 2015 down to a fraction of what had been charged, holding that the social contributions due on the lump-sum survivor pension paid to the claimant in 2015 were reduced to 3,094 euros, and ordering the State to refund her the difference between the contributions originally paid and that amount, against roughly 111,000 euros originally levied on a capital of about 1.5 million euros (CAA Lyon, 16 March 2023, No. 21LY03252). The reasoning in that case turned on European coordination rules specific to Switzerland, so do not copy its arguments mechanically into a British file, but its outcome proves the wider point: assessments on foreign lump sums are challenged successfully, and refunds are actually paid.<\/p>\n Do not move your British pension pot to a QROPS simply because a promoter tells you Brexit makes it necessary. Test the 25% overseas transfer charge and its five-year relevant period first, verify the scheme’s current recognised status on GOV.UK rather than in a brochure, and weigh the French treatment of the receiving scheme before you sign, because a transfer that is clean in Britain can still produce fully taxable French benefits. If you keep the British scheme, the treaty makes France the sole taxing State for private pensions, France taxes the 25% lump sum that Britain paid tax-free, and the 7.5% flat-rate levy is your best friend only if you elect it expressly, take the capital in one single payment, and prove the contributions attracted relief in Britain. Split the payment across years and the Lyon case law will be quoted back at you. Keep income tax, social levies and the S1 position in three separate columns, file the gross amounts with the treaty claim in Britain where needed, and challenge a wrong French assessment first by formal claim and then before the administrative court, where foreign-pension assessments are regularly reduced. Pensions are the one asset you cannot earn again, so treat every transfer form and every tax box as if an auditor were already reading over your shoulder.<\/p>\n Call +33 6 46 60 58 22<\/a> for a telephone consultation within 48 hours with a lawyer of the firm. Or write to us through our contact page<\/a> with your scheme name, transfer date and latest French tax notice.<\/p>\n","protected":false},"excerpt":{"rendered":" British resident in France with a UK pension pot? QROPS transfers can trigger a 25% British charge, and the 25% tax-free lump sum is usually taxable in France \u2014 unless you secure the 7.5% flat-rate option. Treaty, rates and challenge routes explained.<\/p>\n","protected":false},"author":251031309,"featured_media":16514,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_kj_source_type":"","_kj_official_id":"","_kj_official_url":"","_kj_judilibre_id":"","_kj_jur":"","_kj_lieu":"","_kj_chambre":"","_kj_rg":"","_kj_date":"","activitypub_content_warning":"","activitypub_content_visibility":"","activitypub_max_image_attachments":4,"activitypub_interaction_policy_quote":"anyone","activitypub_status":"federated","footnotes":""},"categories":[80312,80314],"tags":[],"class_list":["post-2120558","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-british-desk","category-decryptage"],"yoast_head":"\nB. Can you keep your British scheme and draw your pension as a French tax resident?<\/h3>\n
II. How is your 25% tax-free lump sum taxed in France, and how do you fight double tax?<\/h2>\n
A. Is your 25% pension commencement lump sum really tax-free in France, and do you qualify for the 7.5% flat tax?<\/h3>\n
B. What social levies apply to the lump sum, how do you file it, and how do you challenge a wrong bill?<\/h3>\n
Conclusion<\/h2>\n
Need a quick opinion on your case?<\/h2>\n