Puffer

BellaBoo: Thank you, but I had already seen the legislation, which is of no comfort! I can see that withdrawal of an election is only effective from the following tax year - but WHY does this limitation exist? It seems that taxpayers are to be assumed to have crystal balls and thereby to know what their income will be for the next tax year, in order to decide before it starts whether an election is to continue. The ability to make a new election that is to apply currently or retrospectively is of no relevance where an unwanted election is already in force.

Yes, that is what the notes say - but why cannot the transfer be cancelled for the year in which this is requested? Maintaining the allowance when no longer needed (usually because income changes) can easily create a problem.

It would appear that Marriage Allowance cancelled by the 'donating' spouse during a tax year will still be applied for that year and only then cancelled for later years. Why is this - when a decision on the need to cancel may only be possible after respective incomes are known, late in the tax year or afterwards? Surely it should be possible to cancel the transfer at any time before assessments are confirmed?

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.

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?

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.

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.