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Posted Fri, 04 Jun 2021 15:03:14 GMT by reesy40
My father (who is 81 yrs old) lived and worked in Belgium between 1974 and 2019. He retired in 1999/2000 and received his Belgian State Pension prior to 2013. He paid his taxes on his Belgian income in Belgium until he moved back to the UK in September 2019. He completed his 2019/20 UK Self Assessment and declared his Belgian pension therein for the part year he was in the UK and completed his 2019 return for the part year he was in Belgium with the Belgian Tax Authorities. My understanding, from reading this thread and other information sources is that in the opinion of HMRC and the UK government he should be paying his tax on all Belgian income in the UK as detailed in the Double Taxation Agreement 2009. Other contributors to this thread seem to have had much more correspondence from the Belgian Tax Authorities than my father has and I wonder whether this is because they have not yet caught up with the fact that he is no longer a Belgium Tax Payer (even though they have sent some correspondence to his UK address). I don't know how best to deal with this for my father and would welcome any suggestions from HMRC or other contributors.
Posted Sat, 05 Jun 2021 10:38:38 GMT by Suquie Hart
Reesy40. I think you are almost correct in your assumption. I have spoken twice to tax experts in HMRC and their answer is that if you obtained your pension before the new convention ie 1 January 2013 then you continue to declare in the UK. If after 1 January 2013 ie in the new convention then you have to declare in Belgium. I started my pension on 1 May 2012 so in the old convention so according to the UK HMRC I should declare in the UK which I have done up until now - I returned to the UK in 2003 - but Belgium does not agree. I am at a loss to know what to do. I have sent documents to HMRC but in my opinion someone high up in the tax office has to speak to the tax office in Belgium and sort this out. Please HMRC can you help us? I only get a government pension so can not afford to be fined but I am getting worried now and wondering if I should fill in the tax form for income 2019 in the hope that all this gets sorted out before the next tax form from Belgium. If I have misunderstood please anyone correct me.
Posted Thu, 08 Jul 2021 16:58:00 GMT by RTDGM
Although related responses from HMRC have said that Belgian state pensions begun before Jan 2103 are subject to UK, not Belgian, tax the Minister responsible for UK taxation (Jesse Norman) has recently written a letter to a local MP in Cheltenham accepting the Belgian position that the provision of the Double Taxation Treaty between the two countries had perviously been wrongly interpreted and the pre-2013 exception does not apply to state pensions. It seems that there is considerable confusion within HMRC. If I pay the tax requested in Belgium and file amended returns in the UK for 2019/20 and 2020/21 will HMRC agree to repay me?
Posted Fri, 09 Jul 2021 13:34:01 GMT by Birch
9th July 2021 I too have recently discovered the different opinions held within HMRC. My previous post was after a phone call to people close to the negotiating team. The indications were that things were moving on the Belgian side and that the Belgian pension should still be reported and taxed in the UK (for pre 2013 pensions). Since then I have been informed of a different position expressed in the following letter written to our MP from HMRC. “Thank you for your email of 16 June 2021 about your constituents Mr and Mrs X. I am replying on behalf of the Chief Executive. I am sorry to hear about the difficulties Mr and Mrs X have had in trying to resolve this matter. The taxation of pensions paid from Belgium to residents of the UK is governed by the Double Taxation Convention (DTC) between the UK and Belgium. Mr and Mrs X can find this online at: www.gov.uk/government/publications/belgium-tax-treaties. The DTC has a provision on pensions that was renegotiated in 2012. Pensions are now only taxable in the country from which the payment is made – in this case, Belgium. Before, they were taxable only in the country in which the recipient was resident. A separate provision applies this change only to pensions first paid on or after 1 January 2013. But the Belgian tax authority recently realised that this provision does not apply to state pensions, and that it had not been taxing some state pensions when it should have been. The Belgian tax authority is now writing to the affected parties to correct this error. If Mr and Mrs X have been paying tax in the UK on a Belgian state pension, they will be able to make a claim for repayment. They can find guidance about this at: www.gov. uk/claim-tax-refund. Mr and Mrs X should only record the Belgian state pension in the ‘any other information’ section of a UK tax return. They can find forms and guidance for Self Assessment returns, including the foreign income pages, at: www.gov.uk/government/ publications/self-assessment-tax-return-sa100. I hope this helps you to reply to Mr and Mrs X. Yours sincerely, xyz DEPUTY DIRECTOR” There is a problem tying all this together in that the period Jan-March 2021 is covered by UK 2020-2021 tax return with tax paid by end of January 2022. The Belgian tax return for this same period will not be until autumn 2022 with a demand for payment in 2023. So, we shall not know what Belgium really demands until then as the tax currently being deducted is merely “provisional”. At that juncture, no doubt we shall discover which of HMRC’s theories is correct, whilst in the interim we pay to both countries. What a mess. I hope both countries will be lenient with the time cut off for reclaiming overpaid tax in whichever country that turns out to be.
Posted Fri, 09 Jul 2021 14:51:48 GMT by Gary Coombs
I am following this thread from a general interest perspective and fear Belgium is probably correct in its interpretation, as indicated in the above letter from HMRC. My reading of the Convention is that Article 18(a) gives taxing rights to the paying country unless overridden for pre-2013 pensions by 18(b). That paragraph requires the pension to have been paid under a "pension scheme", a term defined in Article 3(1)(l). My reading of that paragraph is that state pensions are not within its definition of "pension scheme". Indeed, Article 3(l)(ii)(A) appears not to include state pension arrangements and (B) specifically excludes social security schemes. Perhaps HMRC could run that past their specialists and give a response from them.
Posted Sat, 10 Jul 2021 07:37:11 GMT by Roger Cox
There should be no confusion as to the meaning of the wording and its interpretation by the parties. ARTICLE 19 of the convention (GOVERNMENT SERVICE) to which Article 18 is subject, states: 1. a) Salaries, wages and other similar remuneration paid by a Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State. In other words (!) pre2013 Belgian pensions which are being paid in respect of previous GOVERNMENT SERVICE (eg in Belgium), should be paid in Belgium, but pre2013 pensions which are paid in respect of other employment or services should not.
Posted Mon, 12 Jul 2021 10:42:52 GMT by HMRC Admin 10
Hi RTDGM

Currently HMRC does not have any revised guidance on this matter.

The current guidance is that if a Belgian State Pension started/paid before 01/01/2013 then it is only taxable in the UK and is exempt from Belgian tax.

If you are in that situation and Belgium are trying to tax you, you will need to speak to the Belgian tax authority.

Thankyou.

Regards.
Posted Mon, 12 Jul 2021 12:45:17 GMT by RTDGM
I cannot comprehend the answer from HMRC Admin 10 which is diametrically opposite to the one given the Deputy Director of HMRC, on behalf of the Chief Executive, that is quoted in the July 9 posting by Birch. The implication of the Deputy Director's letter is that the Belgian position on the UK Belgium Tax treaty for Belgian state pensions beginning before 2013 has now been accepted and that tax should be paid there, not in the UK; moreover it clearly states that HMRC will refund taxes previously paid in the UK for the years (2019 +) in which the Belgium is now demanding retroactive payments. How can it be that guidance has not been revised to the relevant HMRC administrators? Incidentally, I have corresponded with the Belgian tax authority and they have insisted that I pay tax on my Belgian pension there and that my only potential recourse is to apply for a review by the "Service de conciliation fiscal".
Posted Mon, 12 Jul 2021 14:22:21 GMT by HMRC Admin 10
Hi Gary Coombs

HMRC are currently in discussion with the Belgian Tax Authorities regarding this and an update will be given as soon as discussions are complete.

Thankyou.

Regards.
Posted Tue, 27 Jul 2021 09:48:20 GMT by HMRC Admin 2
Hi,

We are sorry for the conflicting messages that have been posted on these pages about the tax treatment of Belgian state pensions.

The Belgian tax authority appears to have recently changed its view on the taxation of state-pensions paid from Belgium to UK-residents (and therefore UK pensions paid to Belgium-residents). This follows the renegotiation of the UK/Belgium double taxation agreement (DTA) that took effect from 1 January 2013.

Under the pre-2013 DTA, all pensions (apart from Government-service pensions) were taxable only in the country in which the recipient was resident. This changed from 1 January 2013 so that all pensions (apart from Government-service pensions) became taxable only in the country in which the pension arises (that is, the country from which the pension is paid). This change was not intended to apply to pensions that were already being paid prior to 1 January 2013; that is, a person who was already receiving their pension before that date would continue to be taxed according to the old rules. The continuity of treatment for older pensions was dealt with by a “grandfathering clause” in the amended DTA (sub-paragraph 2 of Article 18).

It now appears that the Belgian tax authority considers that the grandfathering provision does not apply to state pensions. This is because the grandfathering provision refers to “pensions…under a pension scheme” and the definition of “pension scheme” (in paragraph 1(l) of Article 3) does not include state-pensions. As a result, Belgium are now seeking to tax all state pensions paid from Belgium to UK-residents, including those that were first paid before 1 January 2013. 

To be clear, this change in view is not connected with the UK’s exit from the EU. The UK’s DTAs have not been affected by Brexit because they are negotiated with individual Member States, rather than with the EU.

We are discussing this issue with the Belgian tax authority, but it appears that their revised interpretation is likely to be correct.

We will update this forum and our guidance once we have further clarity on how (and for what periods) Belgium are implementing this change and what mitigations, if any, are possible.

Thank you.
 
Posted Wed, 28 Jul 2021 08:36:54 GMT by PPG
Thanks for the post attempting the clarify the position with regard to the UK Belgium double taxation agreement. Many UK tax payers will be focussing on 2020-2021 self-assessment returns in the latter part of this year so it would be good to have a timeframe to work to with regard to whether to include Belgian pension. When do you envisage this situation being resolved? As others have previously stated we are dealing with different periods when it comes to tax years which complicates matters. I have asked my MP to intervene on my behalf and on behalf of all those caught up in this situation and stated that I believe that any change in arrangements should be made going forward and that the Belgian tax authorities should not be claiming tax retrospectively - after all, we all did what we were told to do. It is not our fault that they misinterpreted the wording of the agreement. I would expect the UK Government and HMRC to support us in this
Posted Wed, 28 Jul 2021 16:54:59 GMT by Roger Cox
Dear HMRC Admin 2 You note : It now appears that the Belgian tax authority considers that the grandfathering provision does not apply to state pensions. This is because the grandfathering provision refers to “pensions…under a pension scheme” and the definition of “pension scheme” (in paragraph 1(l) of Article 3) 'does not include state-pensions'. In interpretation of this 'grandfathering provision', it is important to consider what is actually written in the text rather than to try to reinterpret it many years after the provision has been in effect and used by both parties to the Treaty, by adding or subtracting wording which is not mentioned in the text. In the text of paragraph 1(l) of Article 3), the term "pension scheme" means any plan, scheme, fund, trust or other arrangement established in a Contracting State: (i) to the extent that it is operated to administer or provide pension or retirement benefits or to earn income for the benefit of one or more such arrangements, and (ii) provided that it is in the case of Belgium, an entity, including pension funds, or a pension scheme arranged through an insurance company, that is organised under Belgian law and is regulated by the Banking, Finance and Insurance Commission or registered with the Belgian tax administration;' Presumably the Belgian authorities do not dispute that the state pension scheme is 'an entity', that it is 'organised under Belgian law', and that it is 'registered with the Belgian tax administration'. The definition of a 'pension scheme' in Belgium is very broad. If it had been the intent of the parties to the Tax Treaty to exclude the principal pension scheme in Belgium (ie the 'state-pension') from the grandfathering provision about Belgian pensions, why then was it not specifically excluded? Please do not be persuaded to 'give in' to this specious interpretation being put forward by the Belgian tax authority, Thank you.
Posted Thu, 29 Jul 2021 12:42:57 GMT by HiFi
Thank you to Admin 2 for the update, it is much appreciated. I do, however, totally agree with Roger Cox’s argument. I also don’t see how the Belgian State Pension falls outside of the Article 3 definition of a ‘pension scheme’, and it is ludicrous to claim that it would be excluded from the ‘grandfathering clause’ without being specifically referenced. As I mentioned in a previous post, the following document is a Bill, submitted to the Belgian Senate in 2011, approving the First Protocol for amendment of the 1987 UK-Belgian DTA. It provides an analysis of the technical provisions of the Protocol. ARTICLE XI: Pensions, on page 11 of the document, describes how the taxation of pensions and other remuneration is modified by the Protocol. It concludes with the statement (translation): “To avoid modifying the tax regime of persons who retired before the entry into force of this Protocol, pensions and similar remuneration paid to such persons shall continue to be taxed in their State of residence.” That seems pretty clear to me that the intention of the negotiators was to avoid disrupting the taxation arrangements for ALL existing pensioners / retirees. If state pensioners were to be specifically excluded from this clause, I’m sure that the lawyers at the time would have factored that into the agreement.

[Link removed - Admin]
Posted Tue, 03 Aug 2021 15:34:15 GMT by XExpatbe
I am UK resident and receive a Belgian State Pension which commenced April 2014. This year I received a Belgian Tax Form which was duly completed. A Belgian tax bill later arrived for tax to be paid on the Belgian Pension amount received for income year 2019. I have subsequently contacted HMRC twice for advice on how to claim back UK tax already paid on this pension amount. In both cases I have been told to use DT-Individual Form. This does not appear to be the appropriate form as its use is for non UK residents and refers to income arising from the UK. Paragraph on the DT-Individual: “For use by an individual resident of a country with which the UK has a double taxation treaty that provides for relief from UK Income Tax on pensions, purchased annuities, interest or royalties arising in the UK. For specific forms for residents of certain countries go to www.gov.uk" I am now further confused……
Posted Thu, 05 Aug 2021 13:46:07 GMT by Gary Coombs
XExpatbe, I believe you need to make an overpayment relief claim for the previous 4 years and then make a Mutual Agreement Procedure (MAP) claim to obtain repayment of the 2 year preceding that. Given that the UK had no taxing right over the pension, it is a good question whether you can obtain repayment for any earlier years but I think the normal rules would get you back to 2015/16 tax year.
Posted Thu, 05 Aug 2021 15:22:57 GMT by XExpatbe
Gary Coombs Thanks for your comments - will look into following that route.
Posted Thu, 09 Sep 2021 16:29:57 GMT by HiFi
Is there any update on the discussions, yet...?
Posted Mon, 11 Oct 2021 10:02:25 GMT by HMRC Admin 17

Hi
 
mhewitt,

 
 
Discussions are still ongoing and updates will be posted as soon as discussions come to a close.

Thank you.
Posted Tue, 12 Oct 2021 21:51:09 GMT by Seagull86
I received the Belgian Non-Residents’ Tax Return for 2020 last week (deadline 04/11/21). I receive a small state pension after working for 3 years in Brussels from 2006-2009. I returned to U.K. in 2009 and started to receive my Belgian state pension (with no deductions as a non-resident) in 2016. This week I managed to get help from the Belgian accountant who took care of staff tax returns for my organisation in Belgium. I was told that I should put my Belgian pension only (Tax Form Code left column: 1228-33) and not my other pension income (a French state pension after 30 years of working in France and my U.K. state pension for the remaining years). So this is what I have done. On what basis/threshold (%) will they therefore tax me? No idea. All my 2019-2020 and 2020-2021 income has already been declared anyway to HMRC so if I am now taxed again on the Belgian 2020 pension I will have to claim back a small amount of tax paid in two U.K. tax years. Moreover, I cannot access my Belgian tax status online (no e-ID which I can only get apparently by going in person to some office in Belgium to confirm my identity) so what will happen if I am away (e.g. on holiday - I AM retired) and fail to pick up the brown envelope before it is too late? The Office National des Pensions is fully online with no e-ID but the SFP uses a different system. I can find no help anywhere. I hope HMRC can come to an agreement with the Belgian authority to simplify this process so that tax is paid where tax is due (for public services) and hope France doesn’t start to do the same…. I don’t quite understand why I should pay tax in Belgium when I don’t benefit at all from Belgian public services - the purpose of tax surely? Isn’t that a loss to the U.K. where I do benefit from public services? No social security deductions are made on the Belgian pension because I benefit from no social services. This situation is very confusing and beyond my comprehension frankly.
Posted Wed, 20 Oct 2021 17:03:01 GMT by Claire Firmin
I am very relieved to find this thread! My father, who died in June, received a small Belgian state pension which started when he was 65 in 1989. He worked in Belgium from 1959 to 1964 and lived in the UK ever since..He has always declared this income to HMRC and paid a small amount of tax. Last year for the first time he received the Belgian Declaration a L'impot des Non-residents. Last year there was an email address to contact in Belgium, which I did. I got a helpful reply advising me to send the form back blank with a covering letter and evidence that tax on the Belgian pension had been paid to HMRC, which I did and heard nothing more. This year, another form has been sent to my father's 'successor'. It was sent at the end of September to Dad's address, but I only picked it up yesterday as no-one is living in his house. The deadline for returning the form is 4 November. No email address to write to this time so I phoned the Centre Particuliers Bruxelles number and talked, in halting French, to Jeffrey Le Beque. He was adamant that the form had to be completed and that the Belgian pension was taxable in Belgium under Belgian rules and that it always had been. After challenging this, he did then look at the rules and asked what year Dad started receiving his pension. He then agreed to go away and look into it further and ring me back. I am still waiting. To make matters worse, I had to fill in paper HMRC tax returns for 20/21 and 21/22. It is not possible to do this online when a person has died. These were posted off in August. I phoned the HMRC bereavement helpline today to ask when these returns would be processed and was told it would not be until the end of December . I asked if I could have a letter for the Belgian tax authorities confirming that I was waiting for this so cannot provide evidence of tax paid in the UK and was told 'no'. So I am left with having to fill in a Belgian form for tax I don't owe, a deadline of 4 November and no evidence that I have not yet been able to pay the tax due in the UK because of lengthy delays at HMRC. Does anyone know what actually happens if the Belgian form is not returned in time? Should I just send it back blank as I did last year with a covering letter saying I can't provide evidence of tax paid in the UK? I wonder what action they could actually take against my late father , or me, if I don't comply.

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