Dutch taxation on a UK lump sum pension

I am due to retire next year and have the option to take part of mu UK final salary pension as a lump sum (which is tax free in UK). Can anyone advise on whether this is also considered tax free in the Netherlands (the initial tax liability - not the ongoing Box 3). Or if not, does anyone recommend a tax advisors who is specialised in this area.

Many thanks

Hi and welcome to the Forum.

How old are you now and where do you live?

Expat Team

I am currently 64 and will be 65 in February, and live outside of Den Haag

Hi again.

OK - so you aren't of State retirement age in either country; this is relevant - there's nothing stopping you retiring, just you can't claim any of the pension related stuff until you do.  Also, you are resident in the Netherlands, so have registered there and have been allocated a BSN number, so are making your annual tax declaration and are liable for your tax affairs being dealt with by the Belastingdienst, not HMRC.

Also, the thing that allows UK pension savers to certain tax benefits (i.e. start drawing down some of your pension pot tax free from age 55) is only open to UK residents and is currently being reviewed by HM Government, so the Belastingdienst may well have an interest in this extra income you have.

There is a double-taxation agreement in place between UK/NL, which means that income tax will not be charged twice on the same money, so you shouldn't pay income tax as the money will already have been assessed for Income Tax by the HMRC (so falls under the agreement).  Where you'll come unstuck is with the social taxes, as these are not part of the tax agreement (they're not income taxes), so potentially, you'll be paying 28% social taxes on your total world-wide income until you reach Dutch retirement age (67).

My advice is to speak to a Dutch tax consultant before you decide whether to retire.

Hope this helps.

Expat Team

You will need to pay Dutch tax on your lump sum - and indeed anything further Uk pension - bit of a disappointment I know!

The best you can do is call 0800-0543 the tax department. The can give you all about the rules over your end of working salary.
Good luck,


Sa270255 wrote:

You will need to pay Dutch tax on your lump sum - and indeed anything further Uk pension - bit of a disappointment I know!

Unless it's a UK Government pension, these are always taxed at source (i.e. by UK) and is recognised by the dual-tax agreement.  However, they will subsequently be assessed for social taxes if the recipient is not of Dutch retirement age.  Private pensions paid from the UK will be assessed for all Dutch taxes (both income tax and social taxes).

I think I've got this right, but taxes are a very complicated subject and I would always recommend consulting a tax expert who trades in the country where you live.