UK Pension in France: How Much Tax You’ll Pay (DTA, CSG & CRDS Explained)

How UK Pensions Are Structured

Before understanding how UK pensions are taxed in France, it is important to understand the different types of UK pension and how they work.

The UK pension system consists of three layers:

• The UK State Pension - A government pension paid by the Department for Work and Pensions to individuals who have paid sufficient National Insurance contributions (currently GBP 230.25 per week in 2025/26)
• Workplace pensions - Occupational schemes run by employers, typically either defined benefit (DB, based on salary and service) or defined contribution (DC, a personal fund)
• Private pensions - Self-Invested Personal Pensions (SIPPs) or ordinary Personal Pension Plans set up by individuals

Most British expats moving to France have frozen UK workplace pensions from previous employers, which sit dormant until retirement. These are typically defined contribution schemes, where you can access 25% as tax-free in the UK.

For French tax purposes, the distinction is critical:

• Government pensions (UK State Pension) receive specific DTA protection
• Private pensions (SIPPs, workplace DC schemes) are subject to French income tax and social charges

This distinction drives the entire French tax planning analysis.

The French Tax System: How It Treats Foreign Pension Income

France operates a worldwide income tax system, meaning all income (from any source, anywhere in the world) is subject to French tax if you are a French resident for tax purposes.

For 2025, the French income tax rates on foreign pension income are:

• Up to EUR 10,777: 0% (abated portion of standard rates)
• EUR 10,777 to EUR 27,478: 11%
• EUR 27,478 to EUR 78,570: 30%
• EUR 78,570 to EUR 168,994: 41%
• EUR 168,994 to EUR 252,949: 45%
• EUR 252,949 and above: 48% (after 3% additional levy)

For pension income, the taxable amount is reduced by a 10% abatement before calculating tax. So a GBP 50,000 private pension becomes GBP 45,000 taxable, with tax calculated on that reduced amount.

Additionally, all pension income is subject to mandatory social charges:

• CSG (Contribution Sociale Généralisée) - 8.3% for higher income, 7.3% for moderate income
• CRDS (Contribution pour le Remboursement de la Dette Sociale) - 0.5% on all income

The CSG rate depends on your total income:

• Up to EUR 60,000 per year: 7.3% CSG
• EUR 60,000 and above: 8.3% CSG

For a UK retiree receiving a GBP 50,000 (approximately EUR 58,000) private pension:

• Taxable amount after 10% abatement: EUR 52,200
• Income tax at marginal rate (41%): EUR 21,402
• CSG at 7.3%: EUR 4,234
• CRDS at 0.5%: EUR 291
• Total tax and social charges: EUR 25,927 (approximately GBP 22,000)

Effective tax rate: 44.6% of pension income

This is substantially higher than most jurisdictions and significantly higher than the UK, where private pension income is tax-free for non-residents.

The UK-France Double Taxation Treaty: What It Says About Pensions

The UK-France Double Taxation Agreement came into force in 2008 and provides specific rules for pension taxation between the two countries.

Article 19 of the agreement addresses pensions and makes a critical distinction:

• Government pensions are taxable in the country where the government service was rendered
• Other pensions and annuities are taxable in the country of residence

For the UK State Pension (a government pension), the treaty provides that it is taxable in the UK (where the service was rendered). France cannot impose income tax on the UK State Pension under the treaty.

However, France treats CSG and CRDS as income tax for DTA purposes. This was clarified in 2024 following campaigns by British pensioners. The current position is:

• UK government pensions are not subject to French income tax under the DTA
• UK government pensions are not subject to CSG or CRDS under the DTA
• Double taxation relief is available for any taxes paid to the UK (though typically there is none)

For private pensions, the position is different:

• Private pensions are taxable in the country of residence (France)
• France applies the 10% abatement to private pensions
• France applies income tax and social charges to private pensions
• There is no exemption or relief from French taxation

This distinction is enormously important. UK government pensions receive full treaty protection (including social charges). UK private pensions receive no protection and are fully subject to French income tax and social charges.

This creates a powerful incentive to maximise UK State Pension income (which is tax-free) and minimise private pension drawdown (which is heavily taxed).

UK State Pension: How It Is Taxed in France

The UK State Pension is a government pension and receives specific DTA protection in France.

Following the 2024 clarification, the position is clear:

• UK State Pension is not subject to French income tax (DTA Article 19)
• UK State Pension is not subject to CSG or CRDS (social charges are treated as income tax under the DTA)
• There is no reporting requirement for UK State Pension income in France

This is a significant advantage compared to private pensions. The current UK State Pension is approximately GBP 230.25 per week (GBP 11,973 per year or approximately EUR 14,000).

For a British expat in France:

• UK State Pension: EUR 0 tax and social charges
• Net income: EUR 14,000

This is in sharp contrast to private pension income, where the effective tax rate exceeds 44%.

The practical implication is that maximising UK State Pension income should be a priority for British expats in France. Filling any National Insurance contribution gaps (at the reduced rates available before April 2026) is one of the highest-return financial decisions available.

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Private and Workplace Pensions: Tax Treatment

UK private pensions (SIPPs, Personal Pension Plans) and workplace defined contribution schemes are subject to French income tax and social charges under the DTA.

The tax treatment is:

• Taxable income = 90% of actual pension income (10% abatement applied)
• Income tax calculated on taxable income at marginal rate (up to 45%)
• CSG applied to taxable income at 8.3% or 7.3% depending on income level
• CRDS applied to taxable income at 0.5%
• No exemptions or concessional treatment

For example, a GBP 100,000 private pension in France results in:

• Gross pension: EUR 116,000 (approximately)
• Less 10% abatement: EUR 104,400 taxable
• Income tax at 45%: EUR 46,980
• CSG at 8.3%: EUR 8,665
• CRDS at 0.5%: EUR 522
• Total tax and charges: EUR 56,167
• Net income: EUR 59,833 (approximately GBP 51,000)

Effective tax rate: 48.4%

This highlights the critical importance of the UK State Pension, which is entirely tax-free. For a retiree with GBP 12,000 State Pension and GBP 50,000 private pension:

• State Pension: EUR 14,000 (100% net)
• Private Pension: EUR 26,500 net (after EUR 29,500 in tax and charges)
• Total net: EUR 40,500 (approximately GBP 34,800)
• Combined effective tax rate: 33% of total pension income

This is where the new residence-based inheritance tax system that replaced UK domicile creates an interaction opportunity. Understanding how UK and French retirement income sources work together is essential for long-term planning.

The 25% Tax-Free Lump Sum: Does It Work in France?

The Pension Commencement Lump Sum (PCLS) is a significant UK pension benefit: 25% of your total pension value is available tax-free under UK law. However, the French tax treatment is straightforward and unfavourable.

The French tax authority (Direction Générale des Finances Publiques) does not recognise the PCLS as tax-free. The PCLS is treated as ordinary income and is fully subject to French income tax and social charges.

The 10% abatement applies to the PCLS as it does to all private pension income. So a EUR 50,000 PCLS becomes EUR 45,000 taxable after the abatement.

For example:

• You have a SIPP worth GBP 200,000
• You elect to take the PCLS: GBP 50,000 (approximately EUR 58,000)
• Taxable amount after 10% abatement: EUR 52,200
• You are in the 45% income tax bracket
• Income tax: EUR 23,490
• CSG at 8.3%: EUR 4,333
• CRDS at 0.5%: EUR 261
• Total tax and charges: EUR 28,084 (approximately GBP 24,000)
• Net PCLS: EUR 29,916 (approximately GBP 25,700)

The PCLS is therefore not tax-free in France. For most French residents, taking the PCLS immediately is tax-inefficient. The alternatives are:

• Defer the PCLS until retirement and lower income brackets
• Spread the PCLS over multiple tax years to minimise the marginal tax rate
• Consider whether a French registered account might provide better tax treatment

For most British expats in France still earning employment income, deferring the PCLS until retirement is significantly more tax-efficient than taking it while earning.

The 10% Abatement: What It Means for Your Net Income

The 10% abatement (abattement) is a critical feature of French taxation of private pensions and is frequently misunderstood.

The abatement is not a tax rate. It is a reduction in taxable income.

If you receive EUR 100,000 in private pension income:

• Abatement reduces taxable income to EUR 90,000
• Remaining EUR 90,000 is subject to income tax, CSG and CRDS
• The EUR 10,000 abated portion is not taxed at all

The effective benefit of the abatement depends on your marginal tax rate:

• If your marginal rate is 45%, the abatement saves you 45% of EUR 10,000 = EUR 4,500
• If your marginal rate is 30%, the abatement saves you 30% of EUR 10,000 = EUR 3,000

Additionally, CSG and CRDS apply to the abated income. So the abatement also saves you CSG (8.3%) and CRDS (0.5%).

For a EUR 100,000 pension:

• Abatement benefit: EUR 10,000
• Tax saving (45% rate): EUR 4,500
• CSG saving (8.3%): EUR 830
• CRDS saving (0.5%): EUR 50
• Total benefit of abatement: EUR 5,380

The abatement therefore reduces your tax burden by approximately 5-6% of pension income. This is meaningful but does not change the fundamental calculation that private pensions are heavily taxed in France.

For government pensions (UK State Pension), the abatement is irrelevant because the pension is entirely exempt from French tax under the DTA.

CSG and CRDS: Understanding France's Social Charges

CSG (Contribution Sociale Généralisée) and CRDS (Contribution pour le Remboursement de la Dette Sociale) are mandatory social charges that apply to all income, including pensions.

They are separate from income tax but function similarly:

• CSG is a social charge at 8.3% (high income) or 7.3% (moderate income) applied to taxable income
• CRDS is a social charge at 0.5% applied to taxable income

For 2025, CSG is 7.3% on income below EUR 60,000 per year and 8.3% on income above EUR 60,000.

CSG and CRDS are in addition to income tax. For a pensioner in the 41% income tax bracket receiving a EUR 58,000 private pension:

• Taxable income after abatement: EUR 52,200
• Income tax at 41%: EUR 21,402
• CSG at 7.3%: EUR 3,811
• CRDS at 0.5%: EUR 261
• Total tax and social charges: EUR 25,474
• Effective rate: 43.8%

The CSG rate changes based on income level. If your total income exceeds EUR 60,000, the CSG rate increases from 7.3% to 8.3%, adding approximately EUR 580 in additional charges.

Critically, CSG and CRDS were historically not treated as income tax for DTA purposes. However, following clarification in 2024, the French tax authority now treats CSG and CRDS as income tax for double taxation agreement purposes. This means UK government pensions are exempt from CSG and CRDS (treated as income tax), while private pensions remain subject to both.

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How Professional Planning Support Actually Fits

For someone with UK pensions relocating to France, professional planning is most valuable when it:

• Clarifies your French tax residency status - This determines whether the DTA applies and how your pension income is taxed
• Models the PCLS decision in the French tax context - The cost of the PCLS in French tax (40-50%) is substantial, and deferral is often more efficient
• Distinguishes government from private pension treatment - Understanding that UK State Pension is tax-free while private pensions are heavily taxed is critical
• Calculates the full cost of pension income including CSG and CRDS - Many expats focus on income tax and miss the social charge component
• Sequences UK pension access with employment income timing - Drawing pension while earning employment income creates marginal rate compression and higher CSG

The goal is to structure your pension access so that you are complying with both UK and French tax law while minimising the overall tax cost of your retirement income.

The Soft But Decisive Next Step

If you are reading this and thinking:

• "We are moving to France with UK pensions but have not understood the French tax implications"
• "We are not sure whether taking the PCLS now or waiting until retirement is more tax-efficient"
• "We want to understand the full cost of CSG and CRDS on our pension income"
• "We want to ensure we are claiming the full DTA protection available on our State Pension"

Then the next step is usually a structured conversation about your specific pension structure and French tax position. Not because something is urgent. But because France gives you time (before you become tax resident) to understand the tax impact and plan accordingly.

The best time to understand the French tax cost of your UK pensions is before you take the first payment. The second-best time is immediately after arriving in France. The worst time is when you are filing your first French tax return and realising you have taken the PCLS at the wrong time or structured your drawdown inefficiently.

Final Takeaway

Drawing a UK pension in France is not about:

• Assuming the PCLS is tax-free (it is not, it is fully taxable as ordinary income)
• Thinking the DTA provides relief from French taxation on private pensions (it does not)
• Neglecting CSG and CRDS in your tax planning (they add 8.8% on top of income tax)
• Treating all pensions equally (government pensions are entirely tax-free; private pensions are heavily taxed)
• Overestimating the benefit of the 10% abatement (it saves 5-6% of pension income, not 10%)

It is about:

• Understanding that UK government pensions are entirely tax-free in France (under the DTA)
• Calculating that UK private pensions are subject to 40-50% combined tax and social charges
• Distinguishing the treatment of the two pension types and planning accordingly
• Deferring PCLS access until lower income brackets if possible
• Ensuring compliance with both HMRC and the Direction Générale des Finances Publiques

British expats in France who plan carefully around the distinction between government and private pensions, understand the full cost of CSG and CRDS, and defer PCLS access until lower income brackets typically achieve significantly better retirement outcomes than those who treat all pensions identically.