mickyvero

I'm just joining in this now: I have been contacted by the Agenzia del Entrate who want to tax me on my private pension for 2016 and expect me to claim back from HMRC tax already paid. I have been a pensioner since 2011 and have paid all my taxes to HMRC so far under what I was told was the Reciprocal Tax Agreement. I was told by the Agenzia that I had to pay tax in Italy only on my private pension; my State Pension or pension for working for a government dept (ie teacher) can be paid in the UK.
The problem arises from the fact that they expect me somehow to recover all the tax paid to HMRC since 2016 and pay Italy instead!
Anyone had a similar request? Any advice on how to proceed? Or how to find a commercialista able to deal with the problem? I live north of Rome
thanks

Pulaski

You need to contact HMRC to reclaim the tax paid in the UK that should have been paid in Italy. You might find this daunting, but it is an entirely routine matter, and likely pretty common, so getting HMRC to refund the tax that you were not liable for in the UK should be fairly easy. You will also need to contact the pension administrators of your private pension to tell them that you're tax-resident in Italy and need your pension paid gross.

I hope that someone else can chip-in on the matter of your UK state pension as generally that is also usually taxed where you live, so not in the UK if you're tax resident overseas.

I suspect that you are going to get very little sympathy from Agenzia del Entrate, and no concessions, regarding the tax that you owe in Italy.

Margaret heather

I would suggest that you contact HMRC. They will confirm what I think is correct that you are liable for tax in Italy on both your private and state pensions. They can email you a form to complete for recuperating tax paid twice or you can find this on the British government website. The HMRC adviser I spoke to also told me that they will only go back 2 years. Good luck!

philat98

l could send you the details of an accountant in Umbria.

Listen Very Carefully

The tax agreement is very clear -state pensions and private pensions are taxed in Italy UK government occupational pensions are taxed in the UK.This can actually work out to your advantage depending on the amounts of your pensions.

Geordieborn

Interesting how the state/government pension combination would be impacted. In the UK the deduction of tax for the state element is achieved by reducing your tax allowance (tax code) on other income i.e. in this case your government pension – seems messy to me.

I wonder how the AdE view a case whereby someone earns 12570 from UK pension(s) regardless of where payment of tax is designated. Nothing is payable in the UK if you have the full allowance. Does this make you liable for tax on the full amount in Italy?

Listen Very Carefully

If you are living in Italy or France where the tax agreement is the same regarding pensions then if the state pension is being taxed in Italy/France then your personal allowance reverts back to the full amount as it is only reduced to make taxation of the pension easier for HMRC.Therefore you get to keep more of your UK government occupational pension.Then your state and private pension will be taxed at the local level applicable plus you will get an allowance equivalent to the tax you would have paid locally to offset any UK tax paid .For most people this means that you pay no extra tax on your UK govt occupational pensions however it is actually possible for this to happen in certain circs eg exchange rate,high value pensions etc ....
.

jiminalpago

I haven't logged on to the Forum for some time, hence the late contribution.
I receive Civil Service and State pensions, both taxed in UK. Entrate accept that this is correct and in accordance with the double taxation agreement BUT I have a UK bank account (to receive and manage this income) which I had not declared. Italian tax regulations regard this account as a "financial activity"; since I have no other income, in Italy or elsewhere, I have never submitted an F24 and did not know of this wrinkle. Is it possible that the problem lies there?
The "fee" for registering an account is minimal - €35/pa in my case - the penalty for not doing so is stiff. I used the services of CAAF to sort things out.

pugliese

so you are saying that if we have a UK account it needs to be registered with the Agenzia delle Entrate in Italia? My commercialista said it wasn't necessary to declare anything if there is less than 10.000 pounds in the UK. But maybe declaring and registering are two different things .....
I'll ask have to ask him!

jiminalpago

During our exchanges (Apr - Nov 21) Entrate mentioned that there had been a "less than" concession but that had been abolished.
The declaration is under "Quadro RW" in the classes of income in the annual tax return.

nicktonight

This might be relevant here - According to the France-Italy double taxation agreement French pensions are taxed in France unless you have Italian Nationality. All French websites for French people living in Italy say that the terms of the DTA mean that you don't have to pay tax on them in Italy (so this year I only declared my French pension in France). However I have just read that last December the Italian tax authorities subjected several dozen French pensioners to a tax adjustment for 2015.
Here is the article in French explaining how the Italian tax authorities are claiming up to 13000 Euros tax for 2015 from some 80-year old French Pensioners https://lepetitjournal.com/rome/comm...ustifie-324661
000
I should also add that my Italian Commercialista went along with me not declaring my French pension provided it was a public pension and not a private pension. Also it has been suggested that the Entrate went after these French pensioners as their pension providers had changed names and were no longer recognized as public pension providers

Bomber Harris

I believe "public pensions" are classed as pensions paid after service to the French government, rather than all pensions (standard old age pension) paid by the French government.
The relevant tax treaty

jiminalpago

The UK/IT Treaty may be differently worded (I haven't read it) but the Belluno office of the Entrate accept that the UK state pension is covered by the Treaty if it is taxed in UK (I had explained and demonstrated to them the method of tax collection in my case.)
However, from Nick's, and earlier posts, there seems to be a lack of consistency across the Entrate net, a hint that they are making it up as they go along.

Bomber Harris

My post included the link to the FR/IT tax treaty, read Articles 18 and 19, specifically 19.2a.
Any pension paid by, or out of funds created by, a State or one of its political or administrative subdivisions or local authorities (in the case of Italy) or territorial authorities (in the case of France) to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State.
Which is the same condition that is written in every tax treaty the UK has signed (I've not found any tax treaty signed by any country with any other country that doesn't contain that same clause), public service pensions are taxed in the state paying the pension, state pension is taxed in the state of residence.
I think what's now happening is the Italian tax authority is realising that they have been incorrectly classing a state pension as a public service pension and are now claiming the tax that should have been paid to them all along.
As far as you (UK pension) are concerned, below is a link to the UK/IT tax treaty, it has the same Article 19.2a condition as the FR/IT tax treaty. I wonder when Brits are going to start getting the same demands for back tax that they're currently sending the French?
UK/IT tax treaty

Listen Very Carefully

Yes I agree with Bomber when I lived in Italy I was advised that my police pension and my wife's teacher pension was only taxed in the UK but had to be declared and that when I eventually got my state pension it would be taxed in Italy having been paid tax free in the UK. At that time there did seem to be a certain amount of confusion with different tax offices taking the view that as long as you paid tax somewhere it was OK and not helped of course by some less than straight forward commercialistas telling ex pats what they wanted to hear( for a fee of course)
I now live in France and the tax agreement is exactly the same wording as the Italian one ie all pensions except government occupational pensions are taxed in your country of residence the others are taxed in the originating country but have to be declared in your country of residence