Planning to cheat the taxman? Do it at your own peril

It doesn’t pay to cheat the Belgian taxman as a former colleague came to find out. Marie-Thérèse had left school at 16 and had taken a job as a “girl Friday” at a small family-run enterprise owned by a friend of her father’s.

She had stayed on well into her 20s , receiving her wages under the table and giving not a thought to the far off date when she would have to retire.

The years had flown by and as the date of her retirement loomed, Marie-Thérèse came to rue the day she had accepted to work in the black.

Marie-Thérèse finally emerged from the shadowy world of the black economy when the family enterprise went under and she was forced to seek employment elsewhere.

With no particular qualifications other than the clerical and typing skills she had acquired over the years, she mostly found temporary work, finally landing a permanent position as a typist when already in her early 50s.

Although the age of retirement for both men and women is 65 years, had Marie-Thérèse paid her taxes and contributed to the social security kitty right from the beginning, she would have benefited from the provision that allows women who have worked for 40 years to retire at 60 on a full state pension.

But having effectively cheated herself out of a decade’s worth of contributions, Marie-Thérèse found she had no choice but to continue working for another five years as the amount of a pension is based on, among others things, the salary earned, the number of years worked and the unemployment benefits received.

Marie-Thérèse never married and once she retired, she gave up her rented apartment in Brussels and retreated to the small house in Namur that she had inherited from her parents upon their demise.

Lost years and decades of a modest wage had led to a meagre pension which Marie-Thérèse finally decided to supplement with a Rente Viagère, a scheme that would enable her to release equity on a house whose mortgage was fully paid up and that had no other encumbrance.

She found a willing buyer, agreed on the amount of the lumpsum – known as the bouquet – to be paid to her up front and the annuity that she would receive until her death when the buyer would take ownership of the property.

The scheme is a perfectly legal way for an elderly home owner to raise extra income while continuing to occupy the property and, while both the bouquet and the annuity are assessed on the basis of life expectancy among other parameters, there is the restriction that the seller must not be terminally ill.

Essentially, the buyer takes a gamble that the seller will drop dead not too long after receiving the bouquet but such gambles have been known to backfire to devastating effect as happened to a lawyer in neighbouring France.

Madame Jeanne Calment had negotiated a Rente Viagère with the lawyer then aged 47 years when she turned 90 in 1965.

Not only did Madame Calment outlive the lawyer, but his wife had to continue making the payments to her until her death in 1997, the couple finally dishing out over $180,000, more than double the value of the property.

Madame Calment’s husband, daughter and grandson had all long predeceased her as well but she continued to live on her own in her apartment until the age of 110 when she moved to a nursing home where she died at 122 years and 164 days, the longest confirmed human lifespan in history.