GaryC

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Everything posted by GaryC

  1. Tax payable on sale of UK Property

    Interesting - subtly different from the UK.   This article explains the basics of the UK process quite well.  Exchange and completion - Which?    Exchange is when your legal firms swap copies of the signed contracts but they are not executed at that date.  As the article says, you are committed at that point to completing the purchase and will be subject to penalties if you back out - usually loss of your deposit.  Execution of the contract happens at completion when the date is entered and the transfer of ownership occurs.  Vendor gets their money; purchaser gets the keys and can move in.  This triggers some admin for your legal firm. They have 14 days to file your Stamp Duty Land Tax (SDLT) return and to pay the SDLT.  They also register the transfer of Title at Land Registry, generally within 30 days of completion.  There may be other tasks behind the scenes but I cannot think of any.  For all tax purposes (SDLT, CGT, Council Tax etc) completion is the crucial date.   If I understand correctly, that is subtly different from Germany, in that the processes after signing the contract are more protracted in Germany but in both countries it seems to be when the contract is actually executed.  If so, the OP would, I think, have to use the completion date, not exchange date for calculating the 10 years.     
  2. Tax payable on sale of UK Property

    I assume that "the date of the purchase contract" is what we would call "completion", i.e. the date on which one legally signs the contract, pays the purchase price and takes legal possession of the property.  Exchange of contracts pre-dates that and one owns nothing at that point.
  3. Transfer of UK pension fund with Standard Life

    I have done a bit of Googling and most of what I have read seems to suggest there should not be a problem.  Perhaps they are talking about not paying into a non-UK account, rather than not paying at all?  Here is but one of the articles I browsed...  What happens to my pension if I move abroad? | PensionBee   I am not sure how you become "UK resident for a day" but worth a thought I suppose
  4. Transfer of UK pension fund with Standard Life

    Out of interest, what reasons do they give for not paying a pension under a contract you entered into however many years ago, or are they saying they will not sell you an annuity when the time comes?  I am no expert but it seems strange to say the least...
  5. Working after state retirement age

    My thoughts exactly. 
  6. Working after state retirement age

    I am not a pensions adviser and don't know how the German employment system operates but "retirement age" is, in my view, the wrong description.  In the UK, the state pension can be claimed at "state pension age", which is increasing from 65 to 67 as it is in Germany.  You can work up to and past that age without "retiring" from employment and still draw your state pension. And if you have an employment-related pension it too will have a "normal pension age", i.e. the age at which you can draw the pension, if you choose, without reduction.  Many employers in the UK offer some form of partial retirement where you can reduce your hours of work and draw your employment-related pension alongside your salary.  Working longer when you have an employment-related pension (while also drawing your state pension) may make more sense because you retain your salary and increase the employment-related pension, so win-win but state pensions are, I think, different.    The question of deferring your state pension is therefore an interesting one.    In the UK it is, in my view, a no-brainer to not defer taking the pension.  Sure, it too increases at about 5% per year deferred but once you have your qualifying contribution years to achieve the maximum you can achieve (you need 35 qualifying years and cannot add qualifying years after the end of the tax year before you reach state pension age), why would you not claim it at the earliest opportunity?  Tax could be a contributing factor if you are dropping from the highest rate to a low rate but leaving that to one side, to achieve an increase in perpetuity of 5%, you forego 100% for a year.  Ignoring inflation and changes in personal tax rates you need to live for 21 years past state pension age to make that worthwhile (1 year with 0% and 20 years with 105% of the normal pension).  Are you really going to live to 88?  And if you do, is it worth foregoing income while "young" and hopefully mobile to have more when you are "old" and potentially immobile, or disinterested in travel etc?    Germany is perhaps a little different because working longer will add more Entgeltpunkte as well as the 6% per year.  As I see it, the maths here is far more personal to you and your Entgeltpunkte at normal pension age of 66+ but, if you are on average salary and getting 1 point per year, then with, say, 45 years at state pension age you would have 45 points.  Working 1 more year would give you 1 more point or 2.2% more, plus the 6% for deferring, making about 8.3% if my maths is correct.  So, again, you get 0% state pension for that deferral year but then get 108% in perpetuity.  The payback is still about 12 years in addition to the year's deferral, so you still have to make it to about 80, subject to the impact of your changing tax rate upon retiring from your employment.  And as I understand it, once you reach normal state pension age in Germany, there is no limit to how much you can earn while drawing your pension (I am not sure what happens about pension contributions in such cases), so if you enjoy your job etc, why not carry on working and potentially accruing more work pension while also drawing the state pension?  Tax rates again? But you need to do your maths.   I ran through this sort of calculation when deciding whether to claim my German pension at 63 (actuarially reduced by 0.3% per month) or to wait until 66 and a bit.  My reduction is 11.4%, so 3 and a bit years at 88.6% compared to 0%, followed by the rest of my days at 88.6% compared to 100%, as it were...  As I am no longer in Germany I cannot add any more points and my tax rate is virtually the same for both versions of the pension.  My spreadsheet suggests, with a sensible-looking annual inflation, that I would need to live to at least 86 before waiting to 66+ would be worthwhile overall.  As my parents and grandparents all fell short of that, my decision was easy - jam today, or a bird in the hand.  Also, you get one shot at this life, so work hard, save hard and retire as early as financially feasible/sensible.   I'll now site back and wait for the pension experts to tell me I am barking up a gum tree!
  7. Purpose of V0100 form?

    As I understand it, the EU rules can only ever serve to increase the amount of pension, Article 52(1) of the EU regulations (EC 883/2004) requires the relevant authority (DWP in this case) to calculate the amount due under its rules and its years (para 1(a)), and then using its rules and all years (1(b)).  Paragraph 3, then says DWP shall pay the higher amount as a pension.  I understand that to mean the EU rules cannot reduce a pension in a particular country.   Also, the UK relies on paragraph 4 to not actually undertake the comparison where a person has the 10 years in the UK.  That paragraph says that if the amount under paragraph 1(a) is invariably equal to or higher than the amount under 1(b), and the pension is listed in Annex VIII, which it is, plus a couple of other conditions what will be met, then the DWP shall waive the comparison.  So, where you have the 10 UK years, the only calculation DWP do is the one they do for UK residents who have not worked abroad.   Your final question is a very good one!  I don't know the answer and it is too complicated to get my head round, to be honest.  Suffice to say, it can work out other than 1:1.  I think it relates to your career history.  For me, with a school, uni, work in Germany, work in UK, retire, the answer is a "nothing" but for my wife with a more chequered work history with school, dance school, work in Germany, unemployed in Germany, study in the UK, unemployed in the UK, employed, self-employed and employed in the UK before retiring, an extra 20% pops out of the bottom.  If you read the DRV internal material on " Über- und zwischen-staatliches Recht, Auslandsrenten Studientext Nr. 30"  Deutsche Rentenversicherung - Homepage - Über- und zwischenstaatliches Recht, Auslandsrenten (deutsche-rentenversicherung.de), you can see that they make clear to staff that although it is perhaps counter-intuitive to have to do both calculations (for the reasons you state), the amount payable under the zwischenstaatliche Berchnung can be higher than under the innerstaatliche.  It's a while since I cured my insomnia by reading the whole document and I cannot recall where it is in the document but have a read, as it tells you everything you never knew you don't know about how DRV calculates your pension using the UE rules...    
  8. Purpose of V0100 form?

    Re my first sentence, you can only have periods recognised, whether domestic or international if you are registered with DRV.  That happens when one starts working in Germany as a foreigner but I don't know how it works for nationals from birth, nor, to be honest, am I particularly interested as a non-German.  It would appear that you are "in" the system, so having your record complete will not harm and as you say, it may give extra points.  My record and that of my wife were updated in Germany for the periods from reaching 16 until starting work in Germany.  When we left, my wife was doing a teacher training course and that too was recognised as German years.  So, having worked in the country for, say, 10 years, one may end up with 15 years on the DRV system.   It was difficult to find documentation for some of the periods but DRV took a sensible approach to those periods and we got it sorted relatively easily.   What qualifies as which sort of time is complex and the best thing to do may be to talk with DRV and ask them why you need so much detail and what can be estimated/brushed over.   When you reach state pension age the UK will perform a calculation under the EU rules, though because our system is not earnings-related the only impact would be to get you past the 10-year minimum period requirement to then give you a UK years-only amount of pension.  So, if you had 5 years in the UK and 30 in some EU country, you would end up with 5/35 x max pension, whereas a person with 5 UK and no EU years would get nothing.   Germany will perform the full Article 52(1) calculations and award you the higher of the two.   First they calculate what you would receive based only on your Germany years - all years on their record including those added through filling out your life history.   Second they calculate a theoretical amount by assuming all years had been contributed in Germany (overlaps are counted only once) and then pro-rata that based on those German year.   Your denominator is therefore the total contribution years and the numerator is the years recognised in Germany, including those education etc years in another country.        
  9. Purpose of V0100 form?

    As I understand it, Germany will recognise a variety of years in other countries under its rules, e.g. post 17 education, mid-life retraining etc.  These may or may not result in extra Entgeltpunkte in Germany but will add to your qualifying years, getting you closer to the 5, 35 or 45 years for the different versions of the pension.  I am not sure how your non-employment time ends up being dealt with but on face value it would probably be beneficial to complete the form.   As you appear to have made contributions in Germany before the end of the transition period you would be protected by the Withdrawal Agreement. This means the EU regulations on the Coordination of Social Security Systems continue to apply as if the UK was still in the EU.  You will therefore get a pension from each EU country in which you have made contributions and it will, in simple terms, be a pro-rata of what you would receive from that country if ALL your contributions had been in that country.  So, live in Germany and the UK and get 2 state pensions, one from each country.   
  10. My account simply came with the card.  Only ever used it once to buy some train tickets in Greece as it had to be Visa and I wanted to use my €s, not my £s.  Loaded the amount onto the card and Bob was your aunty.  But now that I have the Visa debit card the pre-paid credit card is a waste of space (for me).  Just can't be bothered to figure out how to cancel that, while not messing up the rest, lol  
  11. My comdirect Visa credit card is a pre-paid card because (I assume) as a non-resident, they do not wish to extend me credit.  I have no problems with that but in reality the so-called credit card is virtually the same as a debit card.  Both are free for me under the new T&C.   But thinking about those who have to pay now for their "proper" credit card, do you really need one at all (other than car hire perhaps), on the assumption many people would pay off the full balance every month? Afterall both the debit card and the credit card are Visa cards, so useable in the same places worldwide?  Just a thought.   In terms of UK credit cards (assuming they are still obtainable by non-residents), Barclay Card Rewards Card has 0% fees for foreign currency purchases (and uses the Visa exchange rate which is far better than the banks generally), and the Clarity Card from Halifax is virtually the same, except it uses the Mastercard rate, which is slightly better than Visa's.  Other credit cards from those institutions still have fees of up to 3%, so beware...
  12. UK Private Pension - tax free lump sum

    This is exactly what I would have written but sitting reading it, it made me wonder.  What is the " pension, similar remuneration or annuity" in this context?  Is it each payment, or is it the total paid out in relation to the payments into the "pension scheme" over X years?  And if it is the latter, is the "pension" "effectively taxed" if the UK subjects pensions to tax at marginal rates but allows 25% to be taken tax free?  And if that does not mean "effectively taxed", and the whole pension therefore falls back into 17(1) territory, when would UK pensions ever fall into 17(3) as virtually all pension schemes are structured to pay out 25% tax free at retirement?   I think I know how the FA will view it, i.e. we tax the lump sum, but would they then tax the monthly pension payments too, relying on 17(1), or consider 17(3) applies to the rest?  And if it is the latter, are they not splitting payments under a single contract to suit their purposes? Seems like "cake and eat".  Surely someone has tested this?   I guess the other option, if 17(3) would otherwise apply is to forego the lump sum, essentially "un-commute" it, and take a higher monthly pension, if the rules allow for such.  That would lead to a higher annual taxable amount but also access to the UK personal allowance and tax rates on the excess over the PA, so overall perhaps less tax compared to the whole thing being taxed in Germany.  Time to get your spreadsheet out and to study the scheme rules in detail?