Entering Belgian State Pension and Belgian Private Pension Lumpsum payment in Self Assessment

I am completing my UK Self Assessment for 2022/2023. I started receiving a Belgian State Pension in February 2022. Where do I enter this on the Foreign income part of Self Assessment and do I pay tax in the UK on this state pension in terms of the Belgium Tax Treaty with the UK. Secondly I received a lump sum payment from my Belgian Private Pension from the years I worked in Belgium. This was paid in February 2023 as well. The Belgian Tax authorities deducted the 16.66% withholding tax on the gross lump sum payment. As I understand in terms of the Belgian Tax Treaty I do not pay tax in the UK on this capital payment. Do I have to enter it on the self assessment form. Many thanks for your help and advice.

Hi
The Belgian state pension is only taxable in Belgium so you do not need to declare this.
As the private pension started in February 2023, this also does not need to be included.
Please note the return that it has been received but is exempt under Article 17 of the DTA.

Many thanks for your reply. So I do not declare the Belgian State Pension on the tax return. Secondly to just be clear, do I need to declare the amount of lump sum payment I received on the tax return or not. Thank you for confirming that I do not need to pay any extra UK tax on it as it is exempt. And if I have to declare it, where do I enter it? Many thanks again.

Hi
Belgian state pension is not taxable in the UK and should not be shown on the tax return.  
If the lumpsum relates to the state pension, then it should not be included on the tax return.  
If the lumpsum arises from a private pension first credited or paid before 6 April 2013, then it should not be included in the tax return.  
If the pension is first credited or paid after 6 April 2013, then it is taxable in the UK and should be declared on the tax return.

Many thanks for your reply. I am still not clear on this. The lump sum is from a private pension and paid in February 2023. However, in terms of the Belgian UK tax treaty - I have paid the tax on it in Belgium and do not have to pay tax on it in the UK but do I have to declare it on the UK tax return and where do I do this as I cannot find this when filling in the form online. I do not receive any regular private pension payment from Belgium. Sorry to keep asking to try to get a clear answer. Thanks in advance

Hi Eileen Heenan,

You will declare the private pension under foreign income and at the pension section within that claim foreign tax credit relief for the Belgian tax paid.

Thank you.
 

Thank you again - so the tax return will take this Article 18 into account in determining what tax I pay as this says I do not pay any tax on it. Early in this thread - there was a statement that as I do not pay tax in the UK on them, I do not have to enter them.(The Belgian state pension is only taxable in Belgium so you do not need to declare this. As the private pension started in February 2023, this also does not need to be included. Please note the return that it has been received but is exempt under Article 17 of the DTA.) Your last comment contradicts this. Here is Article 18 of the Double tax treaty between UK and Belgium: ARTICLE 18 – PENSIONS Subject to the provisions of Article 19, (a) pensions and other similar remuneration arising in a Contracting State and paid to a resident of the other Contracting State shall be taxable only in the first-mentioned State; (b) however,wherepensionsandothersimilarremunerationunderapensionschemewerefirst credited or paid before 1 January in the calendar year next following that in which the first Protocol to this Convention entered into force, all payments under that scheme shall be taxable only in the other State. So it seems it is not foreign income - its pension. My apologies for keeping asking but want to complete the return correctly and now have conflicting advice. Many thanks

Hi,
 

Article 18(2) of the UK / belgium double taxation agreement, refers to the date 31 January 2013.  Any state pension first paid to an individual before that date, is taxable only in the UK, but any state pension first paid to an individual after that date, would be taxable only in Belgium .

Thank you.

Hi Thanks for your reply. I am referring to the lump sum capital payment I received for my private pension in my question and not the State Pension. For the State Pension it is clear that I do not declare it on the UK tax return. Please can you read my question again and let me know regarding the lump sum which is also covered by the Double Taxation agreement. And could you let me know if there is anyone I can talk to to get further advice here as I would like definitive answers to my questions. Many thanks again, 

Name removed admin .

Hi,

Your lump sum payment falls under Article 18 (a) so is only taxable in Belgium.

Thank you.

My wife's situation appears to be similar but I am thoroughly confused by the information given here. She is UK resident and starting receiving a Belgian State Pension (relating to past non-government employment in Belgium) in April 2023. So far, this has been paid gross but we understand is taxable only in Belgium, although no Belgian return has yet been requested, issued or made. Her UK tax return 2023-24 appears to require this pension to be entered, despite not being taxable in the UK. If this is done, a dummy run appears to result in a charge to UK income tax. If she declares the amount and notes the circumstances and refers to the double taxation agreement, will that result in the tax being cancelled? She cannot claim FTCR as no tax has yet been deducted, nor is the amount (if any) known for certain. Will someone please state clearly whether or not this pension does need to be declared in her UK return and, if so, what entries are needed to ensure that it is not taxed in the UK.

Hi Puffer, I think I have the answers for you. I spoke to the Belgian Tax Authorities a couple of hours ago. Your wife will need to do a Belgian tax return for this - however, for non-residents the forms will be issued in September/October 2024. I was told if I had not received it by 15/10/24 to call them She will then have a month or 2 to complete. She can do this on the paper form she receives or make an appointment for them to help do this over the phone. Once they have completed it for her, they will send a printed copy or her to sign. So that takes care of the Belgian reporting. Due to the tax agreement the UK has with Belgium, she does not declare this on her UK tax return (HMRC confirmed this to me). So for the UK return only her UK state pension and all other income here in the UK or other countries. Hope this helps - all very simple in the end!

Thank you, Eileen; that is helpful. I would hope that the Begian return could be done online. If Belgian tax is then payable, I suppose it will be necessary to buy euros for a bank transfer to Belgium - something of a nuisance when the pension itself has previously been credited here in sterling. It would make sense if the Belgian pension needs no declaration whatsoever in a UK tax return, but the return itself suggests otherwise. The 'Foreign Notes' state: 'Fill in columns A to F if you received a pension or social security benefits from overseas during the 2023 to 2024 tax year.' (which implies declaration regardless of the pension's tax status) and go on to say ' If you have a pension that’s not taxable in the UK because of a DTA, give full details of the pension’s payer, pension and relevant DTA in the ‘Any other information’ box on your tax return.'. Maybe we should just give the latter information, assuming that HMRC will raise a query if this is not sufficient.

Hi Puffer,

You wont declare the Belgian state pension in the UK tax return. You only need too make reference to it in the comments section and that under the DTA is only taxable in Belgium.

Thank you.

Thanks for the comments and for letting me know I should mention it in the comments section of my tax return. If there is tax to pay, fortunately I still have a Belgian Bank account so do not have that problem but sure if you have a Revolut account, you can change your GBP to Euros and easily make a transfer then to their Belgian bank account for the tax. Hope this suggestion helps.

All noted; thanks. My wife's monthly pension arrived today - and was more than twice the usual amount! We wonder if there has been a (significant) increase in the rate of payment, or maybe a backdated supplement? Is there info on this?

Puffer, The point HMRC is making is on page FN8 of the foreign notes "If you have a pension that’s not taxable in the UK because of a DTA, give full details of the pension’s payer, pension and relevant DTA in the ‘Any other information’ box on your tax return. " Revolut has been mentioned but you could also look at other options like Starling Bank, who offer a € account. We have such accounts to receive an EU pension in €, to spend in Euroland, or change to £ as and when it is needed. Just a thought...

Gary C: Thank you. If you look back at my earlier post, you will see that I had quoted the same note. My point was that the first paragraph of the same section of notes appears to require declaration of the pension as income regardless of it not being taxable in the UK. As to paying tax in euros, I realise that this is not difficult, by any of several routes. My point was that it is a nuisance (and involves loss) if one receives a pension here converted into sterling and subsequently has to buy back euros to pay tax.

Having looked at FN8 again, I can see where you are coming from but had not read it in that way. One for HMRC to tweak for future years perhaps? My reference to that particular bank was to indicate that you could just have the pension paid in Euros and then convert to £ at a time of your choice. That of course necessitates having sufficient other income to live from. If you visit Euroland you also have an account with a debit card to spend your Euros without incurring exchange costs... Just a thought.

Hi Puffer, Just seen your comment re the large Belgian pension payment last month. I had a look and I received a large one too - and looked closer. Its what they call "pecules de vacance" ie holiday pay so just an extra to help with summer holidays. When I worked in Belgium we received this once a year too. Next month the payment will be the same as the month before. Hope this helps.