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bigduckontax
bigduckontax, Accountant
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Can you help. I am a British national resident in

Customer Question

Hello,
Can you help. I am a British national resident in Belgium (for 30+ years). I worked for NATO until 1988 and have not worked since. I would now like to start working as a nutritional therapist having studied this subject for many years but due to my age do not want to work full-time. If I work in Belgium I am going to be subject to around €3,000 in social cotntributions and also this will mean that my UK pension (I have made voluntary contributions and have 32 years) will then be transferred here.
I own a small flat in Canterbury, Kent which is rented out at the moment so I do complete a UK self-assessment tax form.
If I were to travel to the UK once a month to work for a couple of days in a health clinic, and were to exceed the 90 days that I am allowed in the UK (I have 2 daughters in Scotland) - how would this affect my residency for tax purposes. Neither my husband (who stopped working 2 years ago but is not receiving his pension yet) nor I have any income in Belgium.
Many many thanks. I understand this is a long question and if you cannot answer then could you please point me in the right direction?
Hilary Wallace
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello Hilary, I am Keith, one of the experts on Just Answer, and happy to help you with your question.
You retain your non resident tax status provided you do not exceed the magic 90 days in any one tax year. In theory this can be averaged over four tax years, but the general consensus of opinion amongst experts on this site is never to exceed the magic number!
You will, of course, continue to be liable to UK taxation on your net rental income from which can be deducted your Personal allowance, currently 10.6K, which is available to all EEA citizens. The following are allowable deductions from rental income [source, Which]:
'The most common types of expenses you can deduct are:
Water rates, council tax, gas and electricity
Maintenance and repairs to the property (but not improvements)
Contents insurance
Interest on a mortgage to buy the property
Costs of services, including the wages of gardeners and cleaners (as part of the rental agreement)
Letting agents' fees
Legal fees for lets of a year or less, or for renewing a lease of less than 50 years
Accountant’s fees
Rents, ground rents and service charges
Direct costs such as phone calls, stationery and advertising for new tenants
The expense should be incurred wholly and exclusively as a result of renting out your property.'
You will have to check whether your UK pension is subject to Belgian tax. I have an old colleague who retired to France and none of his pensions are taxable under the French system except for his State Pension so it is essential to check. It is normal for pensions to be taxed within their country of origin. You are protected from being taxed twice on the same income stream under the Double Taxation Convention between the UK and Belgium, but this does not protect you from differences in tax rates. Protection is by means of tax credits, tax paid in one country being allowed against liability in the other. Finally, I have another school friend who retired to the Belgian Ardennes; small world, isn't it.
I do hope my answer will be of assistance to you.
Customer: replied 2 years ago.

Hello Keith,

Many thanks for your very full answer. I just wondered what are the consequences if I DO exceed the 90 days once averaged out. Do I then start to have dual-residency and what does this mean?

Many thanks

Hilary

Expert:  bigduckontax replied 2 years ago.
Have a look at this article from The Telegraph Hilary as things, as always in the tax world, are changing:
http://www.telegraph.co.uk/finance/personalfinance/expat-money/9923007/Be-prepared-for-Aprils-new-tax-residency-status-test.html
It looks as though you will continue to be classed as non resident, but I still caution you never to break the 90 day rule despite the average option. Dual residency is a nightmare you do not want to experience. You might end up being taxed on all income in both countries and have to juggle with tax credits under the Convention; a Tom Tiddler's ground for argument and confusion. The 90 day rule can be eased for emergencies or sickness.
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Expert:  bigduckontax replied 2 years ago.
Thank you for your support.

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