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  • RE: UK Belgium Tax treaty

    Justme47 - thank you so much for your reply. We’ve filled in mum’s return as I thought fit and given all the relevant information, so if there is a problem I’m sure they’ll get back to us. That’s great that you no longer need to file a UK self assessment return. The Belgians won’t tax you on your UK income and I think you enter it on their final non-taxable income section. I think that they ask for your worldwide income so that they can work out what percentage is attributable to your Belgian source income. I’m not sure of the exact details but it might affect the rates at which they charge you tax and / or your personal allowance. I don’t quite know what the position is with mum’s Belgian Tax. We never had a reply after returning her tax return for last year and haven’t been sent another one, so I’m inclined to wait and see what will happen. Admin 2 - thank you very much for your response. It didn’t quite answer my queries, but I think I am reasonably clear on how to proceed. If I get stuck on re-claiming UK tax paid on mum’s Belgian pension, I’m sure that I will post here again. Happy New Year everyone…..
  • RE: UK Belgium Tax treaty

    Thank you to everyone for contributing to this thread and relaying your personal experiences, which have all been very helpful. Now that it has been agreed that pre-2013 Belgian State Pensions are taxable only in Belgium, could an admin please confirm that it is no longer necessary to report them on the ‘Foreign Income’ pages of the tax return? I think I have read that the details should only be recorded on the ‘Any other information’ section of the main self assessment tax return… is this correct? Also, I’m still not quite clear how to claim a refund of UK tax paid in respect of these pensions. Following the link given to how to ‘Claim a Tax Refund’ do we choose the ‘Self Assessment Tax return’ or the ‘Foreign Income’ option? Going down the the ‘Foreign Income’ route is a bit confusing as it involves claiming Foreign Tax Credit Relief, which I’m not sure is appropriate in this case. Many thanks.
  • RE: UK Belgium Tax treaty

    Is there any update on the discussions, yet...?
  • RE: UK Belgium Tax treaty

    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]
  • RE: UK Belgium Tax treaty

    Suquie Hart - Yes you're right. It's been a great relief to find out you're not alone and to learn from the experience of others in the Forum. I'm sure (....hope...) that discussions are going in the background so I will probably also put this to one side for the time being until I either hear from the Belgian authorities or the position is clarified by HMRC. If there are any more developments from our side, I will post on this thread. I would also be really interested in updates from anyone else who is in a similar position. Many thanks to all for your help.
  • RE: UK Belgium Tax treaty

    Suquie Hart - When mum received the Belgian tax return last November, I was very distressed and initially thought that it had been sent to her in error. I was assured by HMRC that tax was not payable in Belgium and that sending a Certificate of Residence for the year in question (2019) was the way to proceed. I did feel very isolated and it wasn’t until I found this Forum thread that it became apparent the issue was more widespread and that it had arisen because of Belgium’s unilateral ‘reinterpretation’ of the DTA. There is no way that my mother, now 88, could have dealt with all this on her own. I imagine everyone whose Belgian pension is affected by this is in their 70s now, with many in their 80s or even 90s. It has been an incredibly stressful and worrying episode for those affected and I think the action taken by the Belgians is cruel, unnecessary and against the spirit in which the Agreements were made. I don’t know what will happen if you don’t complete the Belgian tax return. They say you could be fined, but perhaps they wouldn’t do that whilst you were in discussions with them. For what it’s worth, in completing the Belgian tax return, I included Mum’s Belgian pension in Box XIII (Foreign and exempt Belgian source income) rather than Box VI (Pensions), so that it wasn’t recorded as taxable income. There was no option to enter the Belgian and UK pensions separately in that section, so I entered the total on the form then gave separate figures for her Belgian pension and her net UK pension income in the covering letter. HMRC say that if you believe you have been taxed in error, you should send them the correspondence and they will take up the case on your behalf. However, both countries are claiming the right to tax these pre-2013 Belgian state pensions so how are we supposed to know which country is in error? If tax is paid in both countries (and some people have already had tax deducted from their Belgian pension) potentially neither would give a refund. For whatever reason, the Admins on this forum seem unable to acknowledge that this is a widespread issue or provide reassurance that HMRC are working to resolve it. However well intentioned, there is little point in repeating the published guidance in increasingly simplistic terms. I think anyone who has read through this thread will be well aware of the official guidance by now, and it doesn’t really address the points that we have all been trying to make. Hopefully enough people will have sent in their relevant correspondence to HMRC for the authorities to recognise the extent of the problem. We don’t, as yet, have anything meaningful to send in, so I am still hoping that the position will soon be clarified publicly and on this Forum thread. Until then, it will be difficult to complete the 2020-21 UK tax return, as we can’t be sure these Belgian pensions (at least from Jan-April 2021) won’t be taxed twice.
  • RE: UK Belgium Tax treaty

    Brian Down… That’s interesting that you had an email from the Belgian Finance Ministry confirming that you don’t need to pay Belgian tax on your pre-2013 pension and that you shouldn’t receive a tax return in the future. This seems to be at odds with correspondence received by some of the contributors to this thread, some of whom have already had tax deducted from their pre-2013 Belgian pensions since January 2021. (Perhaps there has been a change of heart…) Most of my emails to the Belgian Tax authorities remain unanswered, apart from one response which stated that: “Pursuant to article 18b of the Belgian-British Double Taxation Agreement, Belgian pensions are all taxable in Belgium, regardless of whether they were paid for the first time before or after 01.01.2013.” I have not yet had any reply to the letter I sent back with Mum’s completed tax return and Certificate of Residence (UK), setting out why she should be exempt from Belgian Tax. I don’t think that she has had tax deducted yet from her Belgian pension as the amounts paid in 2021 are similar to those paid in 2020. Interestingly, I have just found this document via the ‘International Documents’ section on the FPS Finance website. https://www.senate.be/www/webdriver?MItabObj=pdf&MIcolObj=pdf&MInamObj=pdfid&MItypeObj=application/pdf&MIvalObj=83887326 This 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. The following excerpt is from page 11 of the document, under ARTICLE XI: Pensions (translation): “The text of Article 18 (Pensions) of the Agreement has been replaced. Pursuant to the new Article 18, pensions and other similar remuneration (including non-periodic payments) arising from a Contracting State are, in principle, exclusively taxable in that State. In accordance with the intention of the Belgian and British negotiators of the Protocol, pensions and other similar remuneration derive from a Contracting State when such income is paid by that State itself, one of its political subdivisions or local authorities or by a resident of that State (including a pension scheme, defined in Article 3 of the Convention, which is established in that State). With the exception of public pensions referred to in Article 19 (Public service), paragraph 1 covers all pensions and other similar remuneration, including those which are not paid in respect of previous employment (for example, self-employed workers' pensions or a life annuity that the beneficiary would have built up directly from capital accumulated outside a work-related pension scheme). The taxation of pensions and other similar remuneration is thus modified. At present, pensions and other similar remuneration are taxable exclusively in the beneficiary's state of residence either by virtue of article 18 or by virtue of article 22 (Other income). 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.” Thus it seems to me that it was ALWAYS the intention of the negotiators that people who were receiving their pension (including State pensions) before the 2009 protocol came in to force (1 Jan 2013 in Belgium) should NOT have to change the way they pay tax following its introduction. For these pensioners, all pensions and similar remunerations (other than Public Service pensions) should continue to be taxed in the recipient’s country of residence. For the Belgian tax authorities to claim that they had ‘misread’ the revised Treaty is quite mischievous. Granted, it is possible to change the meaning of a sentence with the addition or omission of a comma or two, but I think it unlikely that the protocol has been incorrectly applied for the past 8 years. The current taxation arrangements (as per HMRC guidance) are in line with the clear intentions of the negotiators set out in the Senate Bill, and I am sure that at least some of those who were responsible for implementing the revised Treaty at the time were also part of the negotiation process. Presumably Belgian residents who receive a pre-2013 state pension from the UK are treated in the same way by HMRC?
  • RE: UK Belgium Tax treaty

    So… to sum up: - The Belgian authorities now require non-residents in receipt of a Belgian-source income to complete a Non-Resident’s Income Tax Return every year. Apparently this applies from 2019 onwards, which explains why many people, including my mother, have been sent a Belgian Tax Return for 2019. - The Belgian Authorities have ‘reinterpreted’ the wording of Article 18 of the UK/Belgium Double Taxation Agreement to insist that Belgian State Pensions (Pillar 1) are not covered by the first Protocol (2009) which they say only applies to Pension SCHEMES (Pillar 2). Their letter to Birch states that there has been an exchange about this subject with the UK Tax Authorities, but their position does not seem to have been adopted by HMRC. The HMRC guidance remains that Belgian state pensions first paid before 1 Jan 2013 are taxable only in the UK. - Birch and Oldie have been notified that their pension will be subject to Belgian tax from 1 Jan 2021, when seemingly they should be exempt from Belgian tax under 18b of the DTA. Tax has already been deducted from Birch’s pension. Horrifyingly, there is also an implication that the Belgian authorities may seek to tax all pensions since 2013 (Roy Davis) with a refund for any UK tax paid to be claimed from HMRC. HMRC - I understand that individual circumstances vary and the paperwork / correspondence needs to be reviewed before individual responses can be given. However, there will be many UK taxpayers affected by this issue and we all do need clarification on Belgium’s reinterpretation of the Double Taxation Agreement. The 5th April will soon be with us and, obviously, the correct information and guidance is necessary in order that UK Tax returns can be completed accurately.
  • RE: UK Belgium Tax treaty

    Oldie... that's quite shocking that the Belgians say there is a new interpretation of Article 18b of the UK-Belgium Double Taxation Agreement, which doesn't seem to have been agreed with HMRC. Perhaps you could contact the International Pension Centre for clarification? https://www.gov.uk/international-pension-centre I'm sure that a lot of people will be affected by this.
  • RE: UK Belgium Tax treaty

    Thank you, Birch. That's useful to know that you receive duplicates of your pension documents by post. I have now asked the pension service (via their website) to send her documents by post, but haven't heard back yet. She has never been able to log in to her online account, even back in 2013 but we didn't worry too much as the 'Certificate of Life' still arrived by post. For the more recent change in 2019, I previously asked about getting an 'activation code' from the UK but was told that this wasn't possible. (Mum could, however, send someone with power of attorney to Belgium as long as she had a medical certificate ..... also not possible). She didn't receive a 'Certificate of Life' to complete last year (2020) and I assumed it was because of the pandemic (she was still receiving her pension). I thought that the brown envelope from Belgium in November was the Certificate of Life, but it turned out to be a Tax Return. We normally ask the local Town Clerk to sign and stamp the certificate, which he does free of charge. I have no idea what deductions have been made from Mum's Belgian pension this year as we haven't seen any documents. I'm not sure how far I would pursue any claims for deductions on her behalf though, as I am already losing the will to live. I have now sent off Mum's Certificate of Residence from HMRC to the Belgian authorities to add to her Tax Return file along with a covering letter explaing why she should be exempt from Belgian Tax on her pension (because she first received it before 1 January 2013). HMRC also say that if the Belgian authorities refuse to grant the relief that you should be entitled to, they will consider contacting them on your behalf under the Mutual Agreement Procedure.