You did everything by the book. You moved to France after Brexit, registered with the French tax office, and when the time came you drew the 25 per cent tax-free lump sum from your SIPP (self-invested personal pension) or your former employer’s workplace pension, exactly as your British adviser suggested. The money arrived in full, with no British tax deducted. Then, a year later, the French tax office sent you an income tax assessment (avis d’imp\u00f4t) that treats the whole lump sum as taxable income, and the bill runs into tens of thousands of euros.<\/p>\n
This shock is one of the most common and most expensive misunderstandings among British residents in France: what His Majesty’s Revenue and Customs (HMRC) allows you to take tax-free in the United Kingdom is not tax-free in France. Once you are resident in France for tax purposes, France taxes you on your worldwide income, and the double tax treaty signed by France and the United Kingdom on 19 June 2008 gives France, as your state of residence, the exclusive right to tax your private pensions, including a lump sum paid in place of a pension. The good news is that French domestic law provides two specific relief valves for a one-off pension capital payment: a flat-rate levy of 7.5 per cent after a 10 per cent reduction, under strict conditions, and the averaging mechanism known as the quotient system (syst\u00e8me du quotient). The difficulty is that both are easy to lose through misclassification of the payment, a split withdrawal or missing proof, and the French administrative courts decide cases on exactly these points every year.<\/p>\n
This article sets out, with the exact statutory wording and recent court decisions, how your regular British pension income is taxed in France, why the lump sum is caught, how to declare both correctly, and how to challenge an excessive assessment. It is written for a British reader living in France; every French legal term is explained when it first appears. The figures and thresholds given are those in force at the date of writing, October 2026.<\/p>\n
The starting point is residence. Article 4 A of the French General Tax Code (code g\u00e9n\u00e9ral des imp\u00f4ts) provides: “Les personnes qui ont en France leur domicile fiscal sont passibles de l’imp\u00f4t sur le revenu en raison de l’ensemble de leurs revenus.” (Article 4 A, code g\u00e9n\u00e9ral des imp\u00f4ts, on L\u00e9gifrance<\/a>), which means that a person whose tax home (domicile fiscal) is in France is liable for French income tax on all of their income, while “Celles dont le domicile fiscal est situ\u00e9 hors de France sont passibles de cet imp\u00f4t en raison de leurs seuls revenus de source fran\u00e7aise.”. You are treated as having your tax home in France if, among other tests, you have your household there or your principal place of stay there: “1. 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 ;” (Article 4 B, code g\u00e9n\u00e9ral des imp\u00f4ts, on L\u00e9gifrance<\/a>). If you moved your family home to the Dordogne or your flat in Paris is where you spend most of the year, this test is met, and the detailed tie-breaker analysis for people torn between the two countries is set out in our guide on how France decides where you are resident for tax<\/a>.<\/p>\n Once you are resident, the source of the income does not matter. Article 158 of the same code states the rule for the composition of worldwide taxable income: “1. Les revenus nets des diverses cat\u00e9gories entrant dans la composition du revenu net global sont \u00e9valu\u00e9s d’apr\u00e8s les r\u00e8gles fix\u00e9es aux articles 12 et 13 et dans les conditions pr\u00e9vues aux 2 \u00e0 6 ter ci-apr\u00e8s, sans qu’il y ait lieu de distinguer suivant que ces revenus ont leur source en France ou hors de France” (Article 158, code g\u00e9n\u00e9ral des imp\u00f4ts, on L\u00e9gifrance<\/a>). Your British State Pension, your workplace pension and your SIPP drawdown are therefore all, in principle, within the French tax base.<\/p>\n The treaty then decides which country actually taxes what, so that the same pension is not taxed twice. For private pensions, the answer is straightforward. Article 18 of the France\u2013United Kingdom treaty, on pensions, reserves pensions and similar payments for past employment received by a resident of one of the two states to taxation only in that state, subject only to the government-service exception. In plain terms, a private pension received by a French resident is taxable only in France (France\u2013United Kingdom treaty of 19 June 2008, consolidated text, on impots.gouv.fr<\/a>; see also the official commentary confirming that private pensions fall under Article 18 of the treaty (BOFiP INT-CVB-GBR)<\/a>). If you live in France and receive a British private pension, France alone has the right to tax it, and the United Kingdom should not. The mirror image applies to pensions paid for British government service: Article 19, paragraph 2 of the treaty reserves pensions paid by the United Kingdom for public duties to United Kingdom taxation, so a former local-authority employee or civil servant needs to check which article covers each of their pensions before declaring anything.<\/p>\n French domestic law then computes the tax in three steps. First, pensions and retirement income benefit from a standard reduction (abattement): “Les pensions et retraites font l’objet d’un abattement de 10 % qui ne peut exc\u00e9der 4 439 \u20ac. Ce plafond s’applique au montant total des pensions et retraites per\u00e7ues par l’ensemble des membres du foyer fiscal”, with a minimum reduction of 454 euros per pensioner (Article 158, 5, a, code g\u00e9n\u00e9ral des imp\u00f4ts, on L\u00e9gifrance<\/a>). Second, the resulting net income goes through the progressive scale (bar\u00e8me), which for the calculation in force runs at 11 per cent above 11,600 euros per share, 30 per cent above 29,579 euros, 41 per cent above 84,577 euros and 45 per cent above 181,917 euros (Article 197, code g\u00e9n\u00e9ral des imp\u00f4ts, on L\u00e9gifrance<\/a>). Third, social charges (pr\u00e9l\u00e8vements sociaux) may apply on top of income tax. The base for the contribution on investment and replacement income is defined by Article L. 136-6 of the Social Security Code (code de la s\u00e9curit\u00e9 sociale), on L\u00e9gifrance<\/a>, and which country’s social legislation covers you follows the single-legislation principle: as the Conseil d’\u00c9tat (the supreme administrative court) recalled, “les personnes qui rel\u00e8vent du champ du r\u00e8glement ne sont soumises qu’\u00e0 la l\u00e9gislation d’un seul Etat membre, d\u00e9termin\u00e9e selon les r\u00e8gles d\u00e9finies aux articles 11 \u00e0 16 de ce r\u00e8glement, ce qui exclut d\u00e8s lors toute possibilit\u00e9 de cumul de plusieurs l\u00e9gislations nationales pour une m\u00eame p\u00e9riode et, de mani\u00e8re corollaire, qu’un m\u00eame revenu soit expos\u00e9 au paiement de doubles cotisations” (Conseil d’\u00c9tat, 25 October 2024, no. 473997, on L\u00e9gifrance<\/a>). In that same decision, the court dealt with generalised social contribution (CSG), reimbursement-of-debt contribution (CRDS) and autonomy solidarity contribution (CASA) assessed on a survivor’s pension paid as a single capital sum, which confirms that a lump-sum pension payment does not escape the social-charges analysis simply because it is paid in one go. Whether you owe French social charges on your British pensions in practice depends on your health-cover status, in particular any S1 certificate of cover under the Withdrawal Agreement, so this point should be checked against your CPAM (caisse primaire d’assurance maladie) position before you accept the assessment.<\/p>\n On the British side, the rule is the one most readers know. GOV.UK explains that you can generally take up to a quarter of each pension pot as a lump sum free of British tax, up to a ceiling of \u00a3268,275, that tax is taken off the remainder before payment, and that the tax-free slice does not affect the Personal Allowance (GOV.UK guidance on pension tax relief<\/a>). This is the pension commencement lump sum (PCLS): free of British income tax at source, within the allowance. Nothing in that British rule binds the French tax authority, because once you are resident in France it is French law, read with the treaty, that decides how the payment is taxed.<\/p>\n French law starts from a deliberately broad definition. Article 79 of the General Tax Code provides: “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 retirement benefit paid as capital is therefore part of your overall taxable income in the year you receive it (Article 79, code g\u00e9n\u00e9ral des imp\u00f4ts, on L\u00e9gifrance<\/a>). Article 158 confirms the mechanism. In the wording applicable to the decided cases, as recalled by the Bordeaux court: “b quinquies. Sous r\u00e9serve de l’application du 6\u00b0 bis de l’article 120, le a est applicable aux prestations de retraite vers\u00e9es sous forme de capital (…). Le b\u00e9n\u00e9ficiaire peut toutefois demander le b\u00e9n\u00e9fice des dispositions du II de l’article 163 bis (…)” (CAA Bordeaux, 3 December 2025, no. 23BX02970, paragraph 2, on L\u00e9gifrance<\/a>). In other words, the default treatment of your SIPP lump sum is taxation as pension income at the progressive scale, and the 7.5 per cent option is an express request you must make, not an automatic reduction.<\/p>\n That option is Article 163 bis, II of the code, and its wording matters because every word is a condition the tax office will check: “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. Ce pr\u00e9l\u00e8vement est assis sur le montant du capital diminu\u00e9 d’un abattement de 10 %.” The same paragraph continues: “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.” (Article 163 bis, II, code g\u00e9n\u00e9ral des imp\u00f4ts, on L\u00e9gifrance<\/a>). Three practical consequences follow. First, the request is express and irrevocable: if you do not claim the levy on your return, the progressive scale applies. Second, the payment must not be split: taking your lump sum in two or three instalments across tax years to stay under a threshold destroys the flat-rate option for the whole operation. Third, you must be able to prove the history of the contributions, including employer contributions, with payslips, scheme statements or employer certificates showing they were deductible from taxable income or attached to exempt income in the state that had the right to tax that income at the time.<\/p>\n A concrete example shows what is at stake. Take a lump sum of 200,000 euros received in a single payment, with the contribution history properly documented. Under the flat-rate levy, the base is reduced by 10 per cent to 180,000 euros and the levy is 7.5 per cent of that base, or 13,500 euros, which discharges income tax on the payment. At the progressive scale, the same 200,000 euros, added to your other income for the year, would be taxed at your marginal rate of 30, 41 or 45 per cent, with only the standard 10 per cent pension reduction capped at 4,439 euros to soften the blow. The difference between the two routes can easily exceed 30,000 euros on a payment of this size, which is why the classification of the payment and the validity of the option are the two points the tax office attacks most often.<\/p>\n The classification point deserves emphasis because a recent court decision shows how brutally it can go wrong. In a December 2025 judgment, the Bordeaux administrative court of appeal examined a former expatriate employee who had received 411,091 euros in capital from an international employer plan and claimed the 7.5 per cent levy. The court distinguished the employer’s genuine retirement plan from a profit-sharing vehicle (plan de participation), holding that the disputed sum “ne pr\u00e9sente pas le caract\u00e8re d’une pension de retraite vers\u00e9e en capital mais rel\u00e8ve de la cat\u00e9gorie des revenus de capitaux mobiliers”, that is, it was investment income rather than a pension paid in capital (CAA Bordeaux, 3 December 2025, no. 23BX02970, on L\u00e9gifrance<\/a>). The administration was allowed to substitute a new legal basis for the assessment, taxing the payment under Article 120, 6\u00b0 of the code, which covers “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 hors de France, lors du d\u00e9nouement du contrat, et les gains de cessions de ces m\u00eames placements” (Article 120, 6\u00b0, code g\u00e9n\u00e9ral des imp\u00f4ts, quoted in the same judgment<\/a>). But the story did not end there: because only the growth on the contributions is taxable in that category, the court limited the taxable increase to 257,135 euros instead of 411,091 euros, ordered that “Les bases des cotisations suppl\u00e9mentaires d’imp\u00f4t sur le revenu mises \u00e0 la charge de M. et Mme C… au titre de l’ann\u00e9e 2015 sont r\u00e9duites de 411 091 euros dans la cat\u00e9gorie des traitements et salaires et major\u00e9es de 257 135 euros dans la cat\u00e9gorie des valeurs mobili\u00e8res \u00e9trang\u00e8res”, and discharged the surplus tax and penalties. The lesson for a British reader is direct: a SIPP lump sum that genuinely represents pension rights is a pension for French purposes, but any payment whose plan documents look like a savings pot, a bonus account or a profit share will attract the same searching analysis, and even a losing classification argument can substantially reduce the bill when only the gains are taxable.<\/p>\n Two further warnings complete the picture. A transfer of pension rights between schemes, for example moving a SIPP to a QROPS (qualifying recognised overseas pension scheme), is not by itself the receipt of a pension payment, but any cash you personally receive in the course of the operation is judged on its nature at the date you receive it, and the British overseas transfer charge is a separate British matter that does not reduce your French base. And where the 7.5 per cent levy is unavailable, for example because the payment was split or the contribution proof is missing, the quotient system described below is the fallback, not an additional discount to be combined with the levy.<\/p>\n Declare everything, even what the treaty reserves to the other country. France computes your overall ability to pay on your worldwide income and then eliminates double taxation by the method the applicable treaty prescribes, rather than by leaving foreign income off the return. The Bordeaux court put the principle plainly in a pension case: where the treaty reserves the right to tax to the source state, the pension must still be included in the French computation and double taxation is eliminated by a French tax credit equal to the French tax on that income, so that the taxpayer’s capacity is assessed on everything they receive (CAA Bordeaux, 3 October 2023, no. 21BX02149, on L\u00e9gifrance<\/a>). For a British private pension covered by Article 18 of the France\u2013United Kingdom treaty, the position is simpler in one respect: since France alone may tax it, there is normally no British tax to credit, and any British withholding suffered in error must be reclaimed from HMRC while the gross pension is declared in France. Our walkthrough of your first French tax return after the move<\/a> shows which forms carry foreign pension income and the foreign-account reporting that sits alongside it.<\/p>\n Where the 7.5 per cent levy is unavailable, the quotient system (syst\u00e8me du quotient) prevents a one-off receipt from being punished by the progressive scale as if you earned that amount every year. Article 163-0 A, I of the code provides: “Lorsqu’au cours d’une ann\u00e9e un contribuable a r\u00e9alis\u00e9 un revenu qui par sa nature n’est pas susceptible d’\u00eatre recueilli annuellement et que le montant de ce revenu exceptionnel d\u00e9passe la moyenne des revenus nets d’apr\u00e8s lesquels ce contribuable a \u00e9t\u00e9 soumis \u00e0 l’imp\u00f4t sur le revenu au titre des trois derni\u00e8res ann\u00e9es, l’int\u00e9ress\u00e9 peut demander que l’imp\u00f4t correspondant soit calcul\u00e9 en ajoutant le quart du revenu exceptionnel net \u00e0 son revenu net global imposable et en multipliant par quatre la cotisation suppl\u00e9mentaire ainsi obtenue.” (Article 163-0 A, code g\u00e9n\u00e9ral des imp\u00f4ts, on L\u00e9gifrance<\/a>). A deferred-income variant in paragraph II spreads arrears over the years they should have covered. In practice, a 120,000-euro exceptional pension capital payment received by a taxpayer whose average net income over the previous three years was 40,000 euros is taxed by adding one quarter of it to ordinary income and multiplying the resulting extra tax by four, which keeps the payment out of the top slices of the scale. The request is made on the return, it applies only to income taxed at the progressive scale, and it must not be confused with the 7.5 per cent levy: you claim one route or the other for the same payment, after comparing the two computations.<\/p>\n Readers who are not yet French residents need the mirror rule. Pensions of French source paid to persons who are not domiciled in France for tax purposes are subject to a withholding at source (retenue \u00e0 la source): “A l’exception des salaires entrant dans le champ d’application de l’article 182 A bis et de la fraction du gain net impos\u00e9e dans les conditions pr\u00e9vues au IV de l’article 163 bis H, les traitements, salaires, pensions et rentes viag\u00e8res, de source fran\u00e7aise, servis \u00e0 des personnes qui ne sont pas fiscalement domicili\u00e9es en France donnent lieu \u00e0 l’application d’une retenue \u00e0 la source.” The withholding is computed on an annual scale at 12 per cent on the part of the net sums above 17,275 euros up to 50,112 euros, and 20 per cent above that, with the thresholds adjusted each year, and it is credited against the final income tax computed under Article 197 A (Article 182 A, code g\u00e9n\u00e9ral des imp\u00f4ts, on L\u00e9gifrance<\/a>). If you receive a French-source pension while still living in the United Kingdom, for example a French supplementary pension from a career in France, this withholding is the mechanism to watch, and the treaty may limit or remove it depending on the nature of the pension.<\/p>\n Start by reading the assessment the way the tax office wrote it, not the way you expected it. Identify whether the lump sum was taxed as pension income at the scale, whether the 7.5 per cent option was applied or refused and on what ground, whether the quotient was considered, whether social charges were added, and whether any British tax was credited. Each of these lines corresponds to a distinct legal argument, and a challenge that mixes them up is weaker than five precise ones.<\/p>\n The first step is the administrative complaint (r\u00e9clamation contentieuse) to the tax office that issued the assessment. The admissibility deadline is strict: “Pour \u00eatre recevables, les r\u00e9clamations relatives aux imp\u00f4ts autres que les imp\u00f4ts directs locaux et les taxes annexes \u00e0 ces imp\u00f4ts, doivent \u00eatre pr\u00e9sent\u00e9es \u00e0 l’administration au plus tard le 31 d\u00e9cembre de la deuxi\u00e8me ann\u00e9e suivant celle, selon le cas : a) De la mise en recouvrement du r\u00f4le ou de la notification d’un avis de mise en recouvrement” (Article R*196-1, Book of Fiscal Procedures (livre des proc\u00e9dures fiscales), on L\u00e9gifrance<\/a>). File within that period even if discussions with the inspector are ongoing, because an out-of-time complaint fails whatever its merits. Attach the contribution history for the 7.5 per cent levy, the scheme rules showing the payment is a pension benefit, the payment statements showing a single transfer, the HMRC correspondence on British treatment, and your computation under both the levy and the quotient so the office can grant the better route without a second exchange.<\/p>\n Complaints do succeed. In the Bordeaux case discussed above, the tax office had already granted partial relief before the court stage, “un d\u00e9gr\u00e8vement \u00e0 concurrence des sommes de 25 178 euros en droits et 4 935 euros en p\u00e9nalit\u00e9s” (CAA Bordeaux, no. 23BX02970, paragraph 1, on L\u00e9gifrance<\/a>), a tax rebate (d\u00e9gr\u00e8vement) of over 30,000 euros on the disputed assessment, before the court reduced the base further and discharged the remaining surplus. Expect the office to defend itself by changing legal ground: the administration “peut, \u00e0 tout moment de la proc\u00e9dure, invoquer un nouveau motif de droit propre \u00e0 justifier l’imposition, d\u00e8s lors que cette substitution peut \u00eatre faite sans priver le contribuable des garanties qui lui sont reconnues en mati\u00e8re de proc\u00e9dure d’imposition” (CAA Bordeaux, no. 23BX02970, paragraph 9, on L\u00e9gifrance<\/a>), which means a successful attack on the first basis can be met with a substitution of legal basis (substitution de base l\u00e9gale), as happened when the Bordeaux court allowed reclassification of the payment as investment income. Your reply should therefore always include a fallback position, typically the quotient or the limitation of the base to the gains, so that defeating the levy does not leave you with the full-scale assessment by default.<\/p>\nB. The lump sum: why the 25 per cent tax-free amount becomes fully taxable in France<\/h3>\n
II. Declaring correctly, paying the right amount and challenging the bill<\/h2>\n
A. Declaring the pension and the lump sum without creating double tax<\/h3>\n
B. Challenging an excessive assessment: deadlines, proof and the courts that actually reduce bills<\/h3>\n