Pension from Italy

I am Italian and moved to England in 2006 where I started to work in the UK until I retired last year. I have UK citizenship and UK fiscal residency as well. I have started receiving a state pension from Italy in September 2023 but they have deducted the income tax already. I have started the procedure to ask them to not deduct the income taxes (I sent the Ep-1 form to HMRC to get a UK fiscal residency certificate so that I can send it to them) but it will take time for this to complete. As I would like to start looking into compiling the UK 2023/24 tax return, I have this question: I know that UK and Italy have a double taxation agreement, but I am not sure if I have to pay the taxes here for my Italian pension first anyway and then claim it back or I can just say when I compile my UK tax return that this particular income is "taxed at source" so I am not due any taxes for that in the UK. Many thanks for any advice.

Hi,

You need to declare it in the UK. if the tax is deducted in Italy you can claim this as foreign tax credit relief to reduce your UK tax liablility.

Relief for Foreign Tax Paid 2023 (HS263)

Thank you.

Hi Nic, Thank you for your post. I am in the same situation as you described in your note above. May I ask to which HMRC Office and address did you send the Ep-1 form (Application form to claim the exemption from the italian pay as you earn as applied to pensions) to be certified for acceptance (Stamped, signed and dated) before returning it to INPS. Also, do you happen to have any contact telephone number of the HMRC office to further enquire on this specific issue? Many Thanks for any help.

Surely, if Italy has incorrectly tax the income, in contravention of the DTA, which is the case here because the treaty awards taxing rights only to the UK for pensions, then one should reclaim that incorrectly withheld tax from Italy? Otherwise the UK is down on its tax take and Italy has ignored the treaty it has entered into and has tax to which it is not entitled, or am I missing something?

@G Bruno, I didn't, who did it for me were the wonderful people at the INCA Patronato in London. They prepared the form (3 copies), I signed it and they sent it to HMRC. Once HMRC returned it to me (that took 9 months) I took it back to the Patronato and they sent it over to the INPS office in Naples. I did call the HMRC office a couple of times to check progress as I was getting worried - telephone number 0300 200 3300. Be patient, they take about 40 minutes to answer.

@Gary C - you are absolutely right. I wasn't clear how to declare it on the Tax Return, hence my question. I appears that I need to declare the full gross amount, and then hope that Italy repays back what I have paid already to them.

Nic Zarrilli, That would be my understanding - the UK should be interested only in the gross pension if it is taxable only in the UK.

@ Nic Zarrilli, Thank you very much for the information, really useful ! Kind Regards