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Referring to the post of CharlesM, I would also like clarification on this: I am resident in the U.K. and in 2019 I declared both to HMRC and to the Belgium tax office a complementary pension lump sum (from a corporate scheme) received in 2019 as a one-off payment alongside my small state pension that year. I paid tax in the U.K. on both as regular income.
Is this type of payment treated the same as a pension and reported to Belgium rather than U.K.? 2019 was also the first year I received a Belgian tax return.
Am I now allowed to go back over two tax years (2019 & 2020) and rectify/claim back the amounts reported as state pension and the one-off complementary pension lump sum to HMRC with a possible tax refund from HMRC?
The amounts involved are not very big. Thank you for your help.
In reply to HIFI above, it is my understanding that if you are resident in the U.K., only the Belgian income should be reported. Tax starts at €0 so even small pensions fall into the Belgian tax bracket. For 2020, I have not reported my French or U.K. pensions - only my Belgian one as advised by the Belgian international accounting firm that dealt with staff tax issues when resident in Belgium. So far, I have submitted the Belgian tax return only for 2020 and will not include 2021 income on the next U.K. return (less than €2,000 a year from Belgian and a lot of admin to receive that between tax returns & Certificates of Life).
I still find it hard to understand why this situation is acceptable to the U.K. What if ALL my pension were Belgian? I would effectively be living in the U.K. tax-free and paying into a system from which I derive no benefit at all. It seems unfair. Can treaties not be renegotiated? It seems logical to me to pay tax in return for services in the country of residence.
1. I recently registered for the Belgian e-ID which enables you to submit and view all tax information online. It required making an appointment via email and sending a copy of my passport and Belgian National number. I then had a video call and was helped to set it up. I can now log in with my user name and I receive an email one-time code. However, it’s only in French/German and Dutch. You can also see your pension information here so useful to see all tax and pension records in one place. Hope this is helpful. 2. When I recently sent back my tax return I was instructed by the Belgian tax accountant, who used to deal with all staff tax affairs when I worked there, only to put my (very small) Belgian State Pension (I worked there for 3 years). I did NOT include other income. The tax starts at €0 anyway. This is explained here: “ Residents of Belgium are taxable on their worldwide income, while non-residents are only taxable on Belgian-source income”. As I understand it, my tax could amount to 25% of my Belgian pension (€0-€13,540 tax bracket). There is no Personal Allowance in Belgium. The Belgian and U.K. tax years are different and it will require a bit of working out what to claim as a refund. I already have to use an accountant to help me with my self-assessment at substantial cost.
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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.