GaryC

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About GaryC

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  • Location UK
  • Nationality British
  • Hometown Swindon
  • Gender Male
  • Year of birth 1959

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  1. Is my UK pension taxable in Germany

    I had forgotten that post - and I cannot recall where the other forum was (must be getting old).  It wasn't a conversation as such but trying to find out why said Major was making those allegations/suggestions.  As I say in the thread on here, I decided not to poke the other hornets' nest any more, leaving it to those potentially impacted to do the poking themselves via their local RBL branch(es).  
  2. Is my UK pension taxable in Germany

    Good luck!  
  3. Is my UK pension taxable in Germany

    Thanks for clarifying the point about the different treatment if it is an injury pension.  I rather assumed we were talking normal accrued retirement pension from serving for 7 years in the army.
  4. Is my UK pension taxable in Germany

    I'll limit my comments/thoughts to the tax treatment:   As a general point, it matters not whether a pension (or any other form of income for that matter) is paid into a UK or German bank account.  What is important is your country of residence.  You then look at who has taxing rights over that income.  As you are resident in Germany, they have prima facie taxing rights over your worldwide income (as does the UK for those resident here).  However, the UK has the right to tax income arising in the UK to non-residents, so-called UK-source income.  This would give the potential for the same income to be taxed twice, which is where the DTA (Double Taxation Agreement) comes into play.  It is a bilateral agreement between the two countries involved and carves up which taxing authority gets the taxing rights over the various types of income and gains that it covers.  So, in essence, the DTA overrides domestic legislation.  You have 2 sources of UK income which need to be considered in terms of how the DTA allocates taxing rights.   British Army pension I don't know who you spoke to in the UK but this pension is taxable income just like any other form of income.  It should be subject to PAYE by the paying entity and if they get your full tax code then no tax would be deducted at source and no tax would be due in the event the UK required a tax return. So, if it was your only source of UK income prior to you gaining German citizenship then it would be below the Personal Allowance of £12,570 and thus no tax would be due but it is certainly not some sort of tax-free income! An important point to remember when you come to look at the "Rückfallklausel"!   This is a UK "Government Service" pension dealt with in Article 18(2) of the DTA.  That Article states that normally such pensions are taxable ONLY in the UK but as you are a resident and a citizen of Germany that flips. It is now taxable ONLY in Germany and should be on your German tax return as taxable income since you got German citizenship in 2017.  For the period before you obtained German citizenship, i.e. while this pension was taxable ONLY in the UK it needs to be reported on Anlage AUS as it is subject to Progressionsvorbehalt, thereby increasing the rate at which you pay tax on your German income for that period.  You need a discussion with your Steuerberater to declare this pension for 2016 onwards to the Finanzamt, both for Einkommensteuer (2017+) and Progressionsvorbehalt (2016).  I am not sure whether 2017 onwards goes on Anlage R AUS but PandaMunich is the expert on all things German tax return and which forms you need.   Unfortunately, I think you need to be ready for a slap on the wrist from the FA for failure to declare the income in Germany, ouch.   As far as I understand it, this pension must also be reported to the KK for 2016 onwards, so you can look forward to a slap on the wrist from them too, I think.   You will need a discussion with HMRC too, so that they can inform the payer of this pension that it can be paid without deduction of tax and without utilizing any of your Personal Allowance under PAYE.  If I recall correctly, HMRC issues an "NT Code" for PAYE purposes, i.e. No Tax. I think they are likely to require you to submit a residence certificate/form to prove your German residence and citizenship. UK State Pension This is dealt with in Article 17(2) of the DTA, which overrides the normal treatment of pensions provided for in Article 17(1). As a result is taxable ONLY in the UK.  The UK/German DTA differs in this regard from the DTAs with many other countries, so it looks as though WISO may not be giving detailed information - but as I have never used it, I'll say no more...   This pension is always paid gross, without deduction of tax, and you can set your personal allowance against it, meaning no UK tax will be due, at the moment, as it is your only source of income that is taxable in the UK.  I say "at the moment" because the personal allowance if frozen at £12,570 until at least 2027/28 and with high inflation your £8000 could start to get close to £12,570 by the time the government decides to increase the allowance again, so you will need to keep an eye on that.   When you have that discussion with HMRC, you'll want to inform them that you have the state pension for 2022 onwards (2021/22 or 2022/23 tax year onwards) but as it is your only source of UK-taxable income, and as the Personal Allowance more than covers it, you assume they will not require a tax return until and unless anything changes...   As PandaMunich said, this pension is subject to Progressionsvorbehalt in Germany because of the wording of Article 23(1)(d), i.e. you have to declare it in Anlage AUS, line 36 and it will serve to increase the rate at which you are taxed on your income that is taxable in Germany. At least the 2022 German tax return can be completed correctly in this regard - no slap on the wrist for this one.   The fact that no UK tax is payable dos not mean that the income is "tatsächlich nicht besteuert".  For that to be the case it would need to be "exempt" from UK tax, and it isn't. It is "taxable income" and is "subject to tax". However, no tax is ultimately due because the income is lower than the allowances you have, so, it is "effectively taxed" or "tatsächlich besteuert" and the "Rückfallklausel" does not bite.   German Pension This is of course taxable in Germany and is of no interest to HMRC.   Hope this helps.
  5. Is my UK pension taxable in Germany

    As PandaMunich says, the UK state pension is taxable only in the UK - point your Steuerberater at Article 17(2) of the UK/D double tax treaty (Germany: tax treaties - GOV.UK (www.gov.uk) - though your adviser will no doubt have access to the German version), where the tax treatment is absolutely clear: "2) Notwithstanding the provisions of paragraph 1, payments which are made in accordance with the social insurance legislation of a Contracting State shall be taxable only in that State."   The UK state pension is always paid gross, without deduction of tax, and it is your responsibility to inform HMRC of any new source of income (i.e. your state pension) and to submit a tax return if you receive a notice to file from HMRC (unlike Germany, where you have to submit a return each year, in the UK you are obliged to notify HMRC of new taxable sources of income within strict time limits but only have to submit a return if you get a notice to file).  If you are a UK or EEA citizen you can claim the UK personal allowance (currently £12,570), meaning that if you have no other UK-taxable income, no UK tax will be due on your UK state pension as the maximum new state pension is currently under £10,000. As HEM says, if it is clear that no tax will be payable, HMRC are likely to confirm that you will not be required to submit a tax return and need take no further action until and unless your UK-taxable income exceeds the personal allowance.     If HMRC were to require you to submit a tax return, then as you are not UK resident, only "UK-source income" has to be reported on it.    In terms of reporting the UK pension in Germany, your Steuerberater needs to look at Article 23(1)(d) of the treaty, which is what allows Germany to take the income that is taxable only in the UK into account when setting the rate at which you pay tax on your income that is taxable in Germany - but that UK income is not taxed in Germany: "Germany, however, retains the right to take into account in the determination of its rate of tax the items of income and capital, which are under the provisions of this Convention exempted from German tax.   If you have any other UK income like bank interest or rental income, then you will need to have a similar discussion with your Steuerberater to make sure that income is reported/taxed in accordance with the double tax treaty... 
  6. Transfer money from UK to Germany

    Why would you want to waste money in that way, especially if the amounts involved are substantial?  That is the whole reason why people use Wise...
  7. Double taxation of an Estate's income - AStG

    I don't know the answer but as I understand sumguy, we are not taking about Inheritance Tax.     When a person dies, their estate is administered by persons appointed as their personal representative or Executors.  They must call in all assets and settle liabilities, pay any Inheritance Tax and ultimately distribute the residue of the estate to the beneficiaries.    If, during the period of administration income or capital gains arise because of the activities of those administering the estate (interest on bank deposits, capital gains on the sale of assets and so on) then a tax liability arises on the personal representatives and they must submit a tax return and pay those taxes.  If I understand the OP, it is this situation he is asking about.   What I don't understand is by §15 is applicable, i.e. why the estate of a deceased person falls within the meaning of a "Familienstiftung", but leave others to explain why...
  8. Short answer is "no", especially for those not yet claiming it.   Longer answer is that for those who claimed the pension before April 2016 and for those whose transfer from the old rules to the new rules gave rise to what is called a "protected payment" then there is a very limited form of inheritance but neither of those circumstance are likely to be relevant to anyone on this forum considering paying voluntary NIC.
  9. If you paid Class 2 at £150, then payback is 8 months, not 3 years...
  10. Definitely worth it in my view and not about the triple lock.  The UK new state pension must rise by at least the amount by which average earnings increase each year.  The triple lock is a government commitment to increase it by the higher of that amount, price inflation (CPI) or 2.5%.   The payback for topping up those 4 years (4 x £5.29 = £21.16) is about 8 months assuming you can pay Class 2 voluntary NIC (£165 per year at the moment), or about 3 years if you have to pay Class 3 at £825 for each year.  So as long as you expect to live at least 8 months/3 years into claiming your UK state pension it is essentially cheap money. If you have a terminal illness, then spend your money elsewhere as your state pension stops at death.    The application for the German pension only has a bearing on the UK pension if you have less that 10 full NI years in the UK.  On the other hand, paying UK voluntary NIC can increase your German pension - only by a few Cents per month for each year but every little helps...   Edit - the UK state pension is a benefit payment, not a pension scheme and the law bases it on a weekly amount.  The norm is that it is paid on a 4-weekly basis (13 times a year) but you can ask for it to be paid weekly or two-weekly (not that I can see any point to that personally...)
  11. I would assume not as he would still have no income taxable in Germany.
  12. Not if he declares residency - then it is unbeschränkt, subject to the DTA.  If he remains non-resident, then beschränkt looks only at German-source income.  
  13. If you do not fall to be treated as tax resident in Germany the UK retains the right to tax your worldwide income in any event.    If you do become tax resident in Germany then you would need to look to the double taxation agreement, which states that unless you have German citizenship (sole or dual with the UK) the Civil Service pension, as a Government Service pension, is taxable only in the UK, and the UK state pension is taxable only in the UK, irrespective of citizenship.  So, if you have no other sources of income that might fall to be taxed in Germany under the DTA, e.g. bank interest above 801€ (rising next year, I think, to 1,000€), nothing would change.   I am not sure about the S1 if you are still resident in the UK as it is, so far as I am aware, intended to cover the situation where you are no longer resident here but where the UK remains responsible for your health care costs. My guess would be that you would have to continue using travel insurance and/or your GHIC card for your travels.
  14. Filing a tax return - help on how to file

    Civil Servants in the UK are not allowed to receive any sort of present.  It is, what it is...