Belgian Pension and Tax

Annemos

Previous 3 posts are now updated. 

Belgian Assessment year 2014 is income for 2013. 

The new rules seem to kick in for payments that started paying out from January 1 2013  (not 2014). 

(Apologies for that confusion on my part. That article where it says "Next Calendar Year Following" must then be referring to the Aseessment Year. No wonder we all get so confused! )



HMRC also says this which is much clearer. 

Note 7: The 2009 Protocol changes the treatment of pensions from 1 January 2013 (Article 18 of the convention). The changes only apply to new pensions. Pensions first credited or paid to a UK resident on or after 1 January 2013 are taxable solely by Belgium and need not be returned for UK tax purposes.

https://www.gov.uk/hmrc-internal-manuals/double-taxation-relief/dt3403

Annemos

UPDATE to anyone monitoring this. All Belgian State Pensions may be taxable now! 


There is currently a big discussion going on between HMRC and the Belgian Tax Authorities. 

BTA now want to tax ALL the Belgian state pensions. They are saying the treaty protocol article applies to Belgian Pension Schemes, but the Belgian State Pension does not fall into that category. 

When I find out more, I will update to confirm if that is indeed the new position. And if it is, how far are they going to go back?

(What will be the first year they will apply the new position? Could amended UK tax returns have to be done, if it has already been reported and then taxed by HMRC?).

As far as I know, there is no official HMRC confirmation of this yet, but a couple of people have been advised of this new position by HMRC for their own personal tax returns.  I am also attaching a link. Last entries are recent updates. 






https://community.hmrc.gov.uk/customerforums/sa/8f4a790e-a0b4-ea11-bf21-00155d9c9e46?msCorrelationId=1d4ddb2e-ce86-4d71-b935-36e790777c6d&instanceId=45bc5646e5f63163a799271f995382b84c5f2334391266b6d89f9667ca2e960a&tenantId=ac52f73c-fd1a-4a9a-8e7a-4a248f3139e1&portalId=e1cfc2ea-2de6-4c96-8e99-76600a349358&orgId=13212d7e-6a5d-4598-95ba-4a07545dbb67&environmentId=302efd07-28d9-4d2d-b558-96167951ad6a&portalApp=site-e1cfc2ea-2de6-4c96-8e99-76600a349358-UKw&portalType=Community%20Forums&portalProductionOrTrialType=Production&licenseType=Dynamics365&portalDomain=https%3A%2F%2Fcommunity-origin.hmrc.gov.uk&page=7

Annemos

Happy New Year to all

Oh well...... a piece of VERY GOOD news on this. 

(I just went into the HMRC Community site to see if there have been any happenings.)

Here is one for us. We do NOT need to file a UK tax return, just to declare that we have had a Belgian state pension. (For example, describing it on the Extra Information  page at the end of a UK tax return.) 

This is great news for people like me that do not normally need to file a UK tax return. I am thrilled to bits not to have to do a UK tax return!

=================================


Here is what the Community site says....

Posted 8 months ago by HMRC Admin 19 

Hi GwenShack,

If your pension started prior to 1 January 2013 then is will be subject to UK tax only.

If your pension began on or after this date, then it will be subject to Belgian tax only.

Thank you. 

=========================================

Posted 15 days ago by HMRC Admin 2 

Hi,

Pensions paid after 2013 would be subject to tax only in Belgium and would therefore not be reportable to the UK.

To claim tax back for previous years you would need to follow the guidance here:

Self Assessment tax returns

https://www.gov.uk/self-assessment-tax-returns/corrections

Thank you.

============================================


As I am not in that position of having already declared a Belgian State pension on the UK tax return, I don't know how many people need to file to correct their UK tax returns. And if so, I don't know how far the Belgians actually went back to tax them, which has created the problem of the double taxation. 

Martkimwat

I am in the same situation having paid UK tax on my Belgian pension since I retired in 2012. I have now started receiving requests from the Belgian tax authority  to fill out a Belgian Tax return which is either in French, Flemish or German none of which do I speak or understand. (I was aircrew in Belgium) I contacted HMRC who I have been paying tax to on my Belgian pension and they advised me that since Brexit, I no longer need to declare my Belgian pension to them, and that I could claim back the tax I paid which was a very nice lump sum thank you. However, I still have the issue of how to complete the Belgian tax returns. They can be done on line by registering with myfin.be where a lot of the information is pre filled but it still only gives a choice of French, Flemish or German. The site seems just as complex as UK tax returns (or worse) so I'm  fearful of how I am going to complete the returns. Does anyone know if there is a service available either in UK or in Belgium who can help make ones returns, like a tax accountant here in UK, which is what I do here for my UK returns? The one good thing is that not being taxed on my pension here in UK has brought my UK tax down to almost the basic rate and the rate in Belgium appears as though it might be lower than the basic rate here in UK.

xylophone

https://www.expatica.com/be/directory/finance/accountants-tax-preparation/

might help.

Annemos

I have received my first Belgian Tax Return assessment today.

Great news. No tax to pay. 

I will do a new post now, to give a clean summary of what I reported and how I have been taxed. 

(It was so difficult to work out what they would actually do in practice....... until they send you the actual tax assessment.) 

Mariolanza

Martkimwat said:

I am in the same situation having paid UK tax on my Belgian pension since I retired in 2012. I have now started receiving requests from the Belgian tax authority  to fill out a Belgian Tax return which is either in French, Flemish or German none of which do I speak or understand. (I was aircrew in Belgium) I contacted HMRC who I have been paying tax to on my Belgian pension and they advised me that since Brexit, I no longer need to declare my Belgian pension to them, and that I could claim back the tax I paid which was a very nice lump sum thank you. However, I still have the issue of how to complete the Belgian tax returns. They can be done on line by registering with myfin.be where a lot of the information is pre filled but it still only gives a choice of French, Flemish or German. The site seems just as complex as UK tax returns (or worse) so I'm  fearful of how I am going to complete the returns. Does anyone know if there is a service available either in UK or in Belgium who can help make ones returns, like a tax accountant here in UK, which is what I do here for my UK returns? The one good thing is that not being taxed on my pension here in UK has brought my UK tax down to almost the basic rate and the rate in Belgium appears as though it might be lower than the basic rate here in UK.

Hello
Were you able to sort your problem out??

I was born and lived in Belgium for 39 years and now live in England.

I am unable to register with MYFIN.BE because I don't have a Belgian bank account, or an eID card reader, itsme, etc. So I do the paper form. 

My mother tongue is French so no problem. 
If I can offer help, please let me know.

😊

pinnks

Just for completeness this has nothing to do with Brexit (for a change) but a misinterpretation of the new Double Taxation Treaty that was introduced in, I think, 2013. 

Under the old DTA non-government service pensions were taxable in the receiving state but under the new treaty that is reversed, so they are now taxable only in the paying state.  Both sides initially thought the grandfathering clause, that allows the old tax treatment to continue for pension that started before the new treaty came into effect, applied also to state pensions.  However, some bright spark in the Belgian Tax Authority noticed that that was not the case because the state pension is not a "pension scheme" as defined in the DTA.  HMRC ultimately agreed (I failed to see why it took them so long) and that is why people are now receiving Belgian tax returns and why HMRC is repaying tax for some or all of the years affected.