Taxes on a British Army pension

Hi, my husband left the British Army last month after 22 years. He works now for a german firm, just like I do. We were told now, that he has to declare his army pension in our German tax declaration at the end of the year. Can anybody help, if this is true? And if it is, what amount does he have to declare? Before British tax or after? He gets it paid into his English account, so what exchange rate would we have to use?
Thanks!
Steffi

strange that. if i remember rightly and i could be wrong as i'm not a tax consultant but if its taxed in the uk then he shouldnt have to pay taxes here on it. the uk still being an EU country and all that.

Obviously you dont get taxed twice. In theory I would have thought they would pay someone living overseas the GROSS amount once you have told the UK authorities, as of course you always pay tax at local level - so you could be living in Monaco, Germany or Hong Kong etc. (all different tax rates).

Then you just pay the tax locally.

Exception are normally property as the income from property is always taxed locally (e.g. UK), but then you just declare the tax paid and get a tax credit or debit over here accordingly.

So plan would be:

1. Get proper tax advice of course!

But I would personally:

1. Contact UK Army Pensions and tell them you are living overseas. My guess is income would then be paid gross.

2. Declare it as taxable income on my German tax form as usual at end of the year.

You forgot

3. Borrow a tank and visit the German taxman.

Under the EU taxation regulations, you are allowed to work up to 184 days in any EU country and pay tax in the country where you are being paid, not the "host" country. From day 185 your tax payments will be deducted from your salary and paid to your "host" country.

So, for an English citizen being paid in the UK, for 184 days you will be taxed under UK regime, and as soon as you hit the 185th day, your UK salary must be declared to the German tax authority and your tax will be calculated by and paid to the German state.

The day count doesnt include weekends away etc, only days you physically are present in Germany.

Speak to an accountant though for the real deal!

That can happen actually. Double taxation is not unheard of. Obviously you'd have to be a complete idiot not to sort it out but it can happen . . . . .

When I say "you dont get taxed twice" I mean legallly speaking. Obviously if you and the accountant are incompetent I guess you could pay tax any number of times!

There is an official "double taxation treaty" between Germany and the UK.

However if you earn UK taxable income (e.g. income from UK rented property), and you "would" have paid more tax on that income in Germany - you have to pay the extra over here!! All nice stuff.

Thanks for all your repies.
I found out now, that under the double taxation agreement his pension is taxed indirectly, because it raises our tax rate.


Steffi