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  • RE: UK Belgium Tax treaty

    HMRC Admin 2's post dated 12 November appears to have brought this on-going debate to a conclusion all turning on the definition that a 'Pension Scheme' does not include a 'state pension'. Writing as one who has been in receipt of 2 Belgian State Pensions since retiring and returning to the UK in 2008, the outcome from my standpoint is very far from satisfactory. At the time of my retirement I received about one third of my income from Belgium and two thirds from the UK. The fall in the value of Sterling since the Brexit vote in 2016, the triple lock on the UK state pension, coupled with much lower stock market returns, has almost reversed this position. In fact my UK income now falls almost entirely within the personal allowances and consequently I am now liable for little or no income tax on my UK income while my Belgian income is being taxed at about 27.5%. The amount of Belgian tax due aside, I am positively sickened that I am now obliged to pay tax to a country from which I am unable to draw any benefit. Taxes surely are paid in return for services rendered? What benefit can I derive in the way of services from Belgium while I am permanently resident in the UK? It may well be that there is little that can be done by way of negotiation should any country decide to tax non-residents by source of income rather than by residence. On the other hand it is totally disingenuous and utterly illogical from the UK's point of view that the outcome of such negotiations is to give away most or all of the tax on UK residents' income to another country. What kind of negotiation is that? From my standpoint, the outcome of this protocol to the convention is not so much a tax as a straight reduction of 27.5% in my Belgian State Pension rather than income tax as such. I can only be grateful that neither Belgium nor HMRC regard it as such, while the double taxation agreement allows me to avoid paying UK tax on my Belgian income, albeit at 20% rather than 27.5%. For the first time in my life I am shedding tears for HMRC (and my country)! Hopefully next time the protocol comes up for review HMRC will be more circumspect and open their negotiating position on the utterly unacceptable consequences of the present text!