Are S1 form-holders exempt from French social charges?

Reader Question:  The Connexion reported on a couple of retired pensioners who were refunded €14,000 in social charges after contesting. Am I right that if you are covered for your healthcare under an S1, and the UK pays for your healthcare, you are exempt from the charges?

It was a stressful situation for the couple you referred to, who made a successful challenge with help from a tax avocat.

In their case, this related to income from UK police pensions, which are, under the UK-France double tax treaty, treated as UK government service pensions exempt from assessment for French tax and social charges, in the case of retired public sector workers living in France. 

There is one main exception: pensions of former UK public sector workers who are French, and only French, and live in France, in which case France, not the UK, taxes these.

Usually, this exemption is automatic if the income is correctly declared as income attracting a tax credit with regard to French tax.

Read more: Must I pay social charges if I have private healthcare in France?

'Mention expresse' on tax return

Another, separate, rule states that all foreign pension income of French residents is exempt from French social charges if the recipient is not a burden on the French health system. 

This can be proved by submitting a copy of your S1 to the tax office and/or drawing attention to this in a ‘mention expresse’ at the end of the tax return online. 

In recent years there was also a box 8RP/8RQ that some tax experts have recommended selecting to draw attention to this.

Finally, reduced social charges are payable on French-taxable investment income and capital gains (7.5% instead of 17.2%) for non-residents or residents attached to a UK or EU/EEA/Swiss social security system, eg. via the S1. This can be claimed by selecting box 8SH/8SI.