Further Taxation on Pension Lump Sum?

Good Day, I would appreciate it if you can answer these questions for me.
I am 58yr-old UK Ex-pat who has been working full-time in the Dutch system for around 8 years, previously from 2001 I was working with UK Agencies in Holland continuing in the UK Tax system. In my last job in UK 1992-2001 I contributed to a Works Pension Scheme and recently I approached them about cashing in any benefits I have accrued. They have sent me an offer of a lump sum circa 18k plus approx 220 GBP per month.
My questions are.
I expect to pay HMRC UK tax on my lump sum before transferred to my Dutch Bank account but will I be expected to pay a further sum to the Belastingdienst, therefore suffering double taxation?
The same question for my monthly payments from the old Pension Scheme of 220 per month?

I would call the Belastindienst for these answers but they will only speak to me in Dutch but mine is not quite good enough to hold this conversation with them..



Hi and welcome to the Forum.

Had this happen to me (I'm an ex-serviceman) when we moved to Holland.  Income tax previously assessed in the UK will not be an issue, there is a double taxation agreement in place between the UK and NL you won't be charged again if the money has already been assessed by HMRC.  What will hit you (as it did me) is the social taxes - these are not part of the double taxation agreement, so you can expect to pay 28% (up to a maximum ceiling of 9.400 euros) of any world-wide income to the Belastingdienst since you became resident.  That charge will be reckoned from the date you first became resident in the Netherlands for that whole tax year; the Dutch tax year runs from Jan > Dec - I got hammered for 16 months worth.

They will take part payments !!!

That figure will drop drastically once you reach Dutch retirement age (18% of the tax is for a Dutch State pension), so you will qualify for a Dutch State pension and your tax bill will drop to 10% of any worldwide income.

Hope this helps.

Expat Team

Thank you for your reply, seems pretty hefty but I did expect something along those lines.
One final question; should I wait for the lump sum and first monthly payments to arrive in my ABN account before informing the Belastingdienst or wait until year end tax declaration?

Thanks again for your help

Hi again.

I waited until my annual tax return (I was blissfully unaware of all this until that point).  They will want to see documentation to back up the numbers you give them, so a copy of the letter awarding you the pension; they will use the figures in those letters to come up with how much you owe; plus a copy of the bank statements showing that sum hitting your account (no matter where that is).  You can use any costs you incur in this process to offset your tax bill, so I went to a Dutch tax advisor because I didn't have a clue what all this was about, I was able to offset my bill for that.

Hope this helps.

Expat Team

Thank you so much, I will indeed approach a Tax Advisor over the year to handle my year end. Your help has been invaluable.

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