Is my UK pension taxable in Germany

[JohnnieBeGood 0]

Hallo, I can't find any clear information about whether I have to pay tax on my UK pension in Germany- and how is the tax if any calculated.

[ruapehu 3,756]

 

Hallo, I haven't done a search to see if there is already clear information about whether I have to pay tax on my UK pension in Germany- and how is the tax if any calculated.

 

Fixed that for you. (There's plenty of information on TT. Use the search function).

[PandaMunich 16,909]

It depends on what kind of pension it is, you'll have to look up who has the taxation rights on it in the Germany/UK double taxation agreement (DTA).

 

Here's an overview:

 

• 
  
  
• if it's a social security pension then it's taxable in the UK, but you will have to pay 7.3% (plus whatever Zusatzbeitrag your public health insurance charges, Techniker charges 0.8%. Plus Pflegeversicherung, if you have a child that's 2.35%, otherwise 2.6%) of it to your German Krankenkasse if you moved to Germany before getting this pension. If you moved here after that event then you can get a German public health insurance card for free, e.g. from Techniker, and the NHS will pick up the tab for you in the background.
  
• If it is a civil service pension, then it depends on your citizenship, see post 20 in Tax on UK pension. You will also have to pay 14.6% (+ Zusatzbeitrag + Pflegeversicherung, see above) of it to your German public health insurance.
  
• If it is a private pension to which you contributed at least 15 years out of tax-relieved income and the UK chooses to tax it, then it will not be taxed in Germany. You will however have to pay 14% (+ Zusatzbeitrag + Pflegeversicherung) of it to your German public health insurance.
  
• If it is a private pension to which you did not contribute at least 15 years out of tax-relieved income (or if it is one one that the UK chooses not to tax) then you have to tax it in Germany. You will also have to pay 14% (+ Zusatzbeitrag + Pflegeversicherung) of it to your German public health insurance.
  
• if it is a company pension to which only your employer paid in and/or to which you contributed at least 15 years out of tax-relieved income then the UK has the taxation rights. You will however have to pay 14.6% (+ Zusatzbeitrag + Pflegeversicherung) of it to your German public health insurance.
  
• if it is a company pension to which not only your employer paid in and to which you didn't contribute at least 15 years out of tax-relieved income then Germany has the taxation rights. You will also have to pay 14.6% (+ Zusatzbeitrag + Pflegeversicherung) of it to your German public health insurance.
  

 

 

Please also read Where to pay tax on German pension received in UK in its entirety.

 

********************************

 

Regarding the taxation, that's a whole other decision tree, with again many branches depending on which kind of pension it is.

If you don't mind, I will only answer that question after you tell me what kind of pension it is exactly.

[JohnnieBeGood 0]

Thanks for the quick reply.

It is the uk state (social security) pension. I moved to Germany before getting this pension. I should therefore contact my German Krankenkasse. According to the above I therefore don't have to pay German Income Tax on this state pension

[Tim Hortons Man 543]

Question, for most people they are looking for a general idea of who much tax they will pay. For example someone moving to Germany might ask, "what will my take home be on 5 grand a month" in that case you refer them to the German Wage and Tax Calculator which would give them a pretty good picture of how much they'd take home.

 

For someone looking to get an idea of what their net will be for planning purposes (as I tell my family, will I have enough take home to spend winters in Florida) on pension income. If I put in my income "without pension/unemployment" this should give a ball part figure, or do you calculate it with pension/unemployment income as you'll no longer have your employer paying your half of healthcare

 

Thanks

[PandaMunich 16,909]

As I said in my last post, the taxation of pensions is a bit more complicated than that.

 

But we've already been through that, haven't we?

Details in Working and receiving pension.

[ballygobackwards 97]

Quote: Panda Munich

if it's a social security pension then it's taxable in the UK, but you will have to pay 7.3% (plus whatever Zusatzbeitrag your public health insurance charges, Techniker charges 0.8%. Plus Pflegeversicherung, if you have a child that's 2.35%, otherwise 2.6%) of it to your German Krankenkasse if you moved to Germany before getting this pension

 

Since when does this apply? I never read or heard anything about this anywhere.

[PandaMunich 16,909]

Please read post 40 in Tax on UK pension.

 

That a foreign pension is also part of the contribution base for public health insurance is also mentioned on page 21 of this document issued by the "Spitzenverband Bund der Krankenkassen = GKV-Spitzenverband" detailing on which kinds of income you have to pay a public health insurance contribution.

[Tim Hortons Man 543]

 

As I said in my last post, the taxation of pensions is a bit more complicated than that.

 

But we've already been through that, haven't we?

Details in Working and receiving pension.

 

yes we have I'm still a few years away from collecting my pension but as you get older time speeds up, so blink your eyes and suddenly I'm an old cranky German pensioner demanding front of the line access at Aldis Once she sit's down to talk with HR than I'll talk to my Steuerbreater and run hard numbers. In the meantime I'm simply assuming I'd lose 25% to the tax man. The main issue I'm dealing with is the fact our pensions and investments will kick in over a 5 year period. So I need to make sure we can cover the initial short fall.

[Tim Hortons Man 543]

Edit: While Canadian healthcare leaves a lot to be desired (at least in compassion to German healthcare) the Canadian government takes very good care of seniors tax wise. Basicly if you're only income is from Government pensions (CPP OAS and GIS) than you pay no tax. Not only that one can live a modest but comfortable life on about $2000 a month, and considering the goverment will give over $3000 a month for just being old it's a pretty sweet deal! Add in a foreign pension and some income from a TFSA and perhaps some dividend income and you can earn a pretty decent income. For example my Father in law makes over 4 grand a month (including a small German pension) and pays not tax. I've been trying to run numbers but it's really hard to get exact numbers on either side. I did find a good tax program for Canadians but it's not terribly user friendly.

 

My best estimate is that purely from a tax point of view we'd be way better off, as seniors, in Canada, but what's hold me back is healthcare. Not sure about the UK but my feeling it's the same, it's simply better here.

 

There's another issue that hasn't come up much but Governments in the UK and Germany will force you to liquidate everything you own if you can't afford a home. Maybe it's because I'm Canadian but that is such BullShit with capital B and S. The wife and I we're watching a program on BBC about a lady and her struggle to find a home, she was in hospital after a fall and couldn't go back. Final comment from the narrator was about how they found a place but she'd was going to be forced to sell her home. Why would she not sell the place go to Vegas and gamble it all away, or better yet give it to the kids. It's even worse here in Germany because you're forced to pay a supplement to your healthhcare which is supposed to cover all of this

[stevejinde 0]

OK, I'm just trying to find out if anything has changed since the last time there was a post on this subject.

Now I will be getting a pension of just under €1000 here in Germany and around €500 from the UK. Now I'm under the Tax threshold with my German tax (I'm married), but my UK pension would put it over the top. I have heard that my Pension from the UK wouldn't be taxed here in Germany, though, as it comes from the NHS. Is that correct? And what about if I take on a so-called Mini Job?

Now what about doing a normal taxable job on top of all that? After all, I have the time...

[yesterday 2,039]

Normally you should apply to get your state pension from the Renten Versicurung place, tell them you get a UK, give them your NA number etc. They will contact the UK for that side of the pension.

 

It normal that you do not pay tax on money you put into the pension system and you pay tax based on your income when you draw your pension. So the UK may take some money off the 500 pounds you get from the UK as you avoided paying tax when you were paying for the pension

[GaryC 411]

There is a lot to unpack in this question.

 

First doing a Kontenklärung with the DRV so that they include the UK years as appropriate in the innerstaatliche Berechnung of the German State pension may prove beneficial.  Second, assuming you fall under the Brexit Withdrawal Agreement, then Germany will perform a zwischenstaatlich Berechnng of its pension by assuming all your British and German years were undertaken in Germany and then pro-rating the pension that falls out to your actual German years.  That could increase the German pension.

 

Then there is the question of the UK state pension.  You should have a "Starting Amount" for the new State Pension at April 2016, following which you add 1/35 x max state pension for each full qualifying year you have paid or been credited after 5 April 2016.  You may still be able to buy years from 2006/7 onwards by paying either class 2 or class 3 voluntary NIC in the UK.  For each year you buy you add the same 1/35 x max weekly amount to your UK pension and those voluntary years also feed into the German calculations.  You have until 5 April 2023 to buy those very old years. After that you can only buy up to 6 tax years in arrears.  If you can pay class 2 then payback is about 8 months into claiming the state pension so something of a no-brainer is you have the £160 or so available for each year you want to buy.  If you have to pay class 3 then payback is about 3 years as each years costs about £825 but still a good investment if you can afford it and don't plan on pegging it within 3 years of reaching state pension age, gasp!

 

Your UK State Pension is taxable only in the UK but will feed into the Progressionsvorbehalt in Germany to set the rate at which you pay tax.  If the UK and German pensions together take you over the Grundfreibetrag then you would pay tax on some of your German pension.  If you are a UK or EEA citizen you can claim the UK personal tax allowance meaning you would not have to pay tax in the UK if your total UK taxable income is less than £12,570.

 

The NHS pension is considered to be a Government Service pension for double tax treaty purposes  INTM343040 - DT claims and applications - Types of income: Pensions and Annuities - HMRC internal manual - GOV.UK (www.gov.uk) - see Note 1 which sets out the special case for NHS pensions and the UK/German tax treaty. This means that it is taxable only in the UK unless you have German citizenship (even if that is by dual citizenship), in which case it is taxable in Germany.  If it is taxable in the UK, it too feeds into the Progressionsvoorbehalt.

 

If I were to hazard a guess then at 1,000€ plus about 590€ NHS pension plus ? UK state pension, say £50 per week (equivalent to only 10 or so UK qualifying years), so 59€ per week, or 256€ per month, the income feeding into progression would be about 22,150€ per annum, so above the married Grundfreibetrag meaning some tax would be payable on your German pension.  Using those figures your UK income would be below the personal allowance, so no tax would be due but if you had the max UK state pension of about £9,600 per year, then with £6,000 from the NHS you would have to pay tax on about £3,000, so £600... 

 

 I'll leave others to comment on ongoing German employment...

[Bogies 6]

Is my UK pension taxable in Germany . I've no idea if this thread is still current. However, the answer is yes. If you receive a UK Pension, then you have to (!.) Tell the Krankenkasse. (Health Insurance.). They will work out what you have to pay them. For example. You receive  £160 / Week. (Doesn't matter what that is in € on your bank account.). You pay the AOK, for example £160 /7 = £22.86  x  30 days = £685.80 . This is divided by the German Central Bank Exchange rate. For example (0,86355) = €794,16 . Of this you pay the Krankennkasse  7,95% Kranversicherung and  3,05% Pflegeversicherung. a month. (2022)

(2) . On your Tax return, you do exactly the same. Work out what you theoretically receive. It is not the same as what is paid onto your bank account from the UK. And then put this amount onto the Form R-AUS . On this amount you will be taxed. In Germany. In the UK, you pay no tax.

 

[PandaMunich 16,909]

17 minutes ago, Bogies said:

(2) . On your Tax return, you do exactly the same. Work out what you theoretically receive. It is not the same as what is paid onto your bank account from the UK. And then put this amount onto the Form R-AUS . On this amount you will be taxed. In Germany. In the UK, you pay no tax.

No, actually this only applies to very few UK pensions.

 

For example, if you draw a UK State Pension (= social security pension), it has to be taxed in the UK, not Germany, because that is what the double taxation agreement between Germany and the UK lays down.
It is just subject to Progressionsvorbehalt in Germany, i.e. you have to declare it in Anlage AUS, line 36).
For details, please read:

 

[HEM 11,164]

47 minutes ago, Bogies said:

(2) . On your Tax return, you do exactly the same. Work out what you theoretically receive. It is not the same as what is paid onto your bank account from the UK. And then put this amount onto the Form R-AUS .

 

In my case I present the Steuerberater with a table of what actually arrives into my DE account in Euros and 74% of that (depends on year pension started) gets entered into Anlage AUS as Panda states.

[Bogies 6]

1 hour ago, PandaMunich said:

if you draw a UK State Pension (= social security pension), it has to be taxed in the UK, not Germany

Going to have to get back to you on this one, as I've heard otherwise. I receive a UK State Pension since Feb 2022 (my 66th). I receive a Deutsche Rente (2019) as I've worked here since 1980. According to my Steuerberater I have to tax my UK Pension on R-AUS this year when I do the return for 2022. I, or he could be wrong. I guess I'll find out in April. When the UK tax year starts and ends. But if this is the case, when and how will my UK Pension (SSP) be taxed. They haven't deducted, or asked for anything back. Yet.

Will study your report though. Thanks

 

1 hour ago, HEM said:

In my case I present the Steuerberater with a table of what actually arrives into my DE account in Euros and 74% of that (depends on year pension started) gets entered into Anlage AUS as Panda states.

Sounds similar to my situation.

[HEM 11,164]

21 minutes ago, Bogies said:

But if this is the case, when and how will my UK Pension (SSP) be taxed. They haven't deducted, or asked for anything back. Yet.

 

Looking at the notes I made concerning my UK state pension...

Back in April 2018 (I retired at the end of January 2018) I called HMRC - there was an international callers phone number +44 135 535 902 - check if still valid.

They stated that as long as my UK state pension is below the tax-free allowance I pay no UK tax (my UK state pension is well below the allowance limit).

The lady at HMRC confirmed that I do not have to submit anything to them (even if German tax office says I should).  They were shocked to hear that the UK state pension has to be reported to the Finanzamt.

 

[GaryC 411]

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... 

[Bogies 6]

On 2.1.2023, 19:29:54, GaryC said:

As PandaMunich says, the UK state pension is taxable only in the UK -

Hi Gary, hi PandaMunich, HEM and others . Many thanks for your infos and posts, you seem to know a lot more than me, and I am now totally confused.

Here is the situation chronologically. 

1.       Married, no children, lived and worked in Germany after coming out of the forces (7 Years) in 1981.

2.      British Passport of course and German Citizenship since 2017. (I have both)

3.       British Army Pension since 2016—£156 / Month. Payed into German Bank Account.

4.       German Pension (Rente) since 2019 €2100. / Month

5.       British, Social Security Pension (National Insurance) since 2022 £151.65 / Week (£7.912,88 / Year) paid every four weeks into German Bank Account.

6.        Pay no tax on the Army Pension anywhere. UK. Says it is tax-free because of the little amount. Pay no health insurance or Pflegeversicherung on this. It is not on my German Tax return. (Einkommensteuererklärung).

7.       Do a yearly Einkommensteuererklärung every year on the German Rente (Pension).

8.       Have informed the Krankenkasse about the UK Pension from 2022, on this I pay €90.32 / Month health insurance.

Therefore, the question remains for me, do I have to tell the Finanzamt about the UK payments, if so how and where if it is not R-AUS. They will know about the UK Social Security pension because the Krankenkasse will report it to them, and I can claim a tax reduction because of these contributions..

Having payments of roughly £762 / €850 coming from the UK. Will I have to pay UK tax.?

The WISO Tax programme says this, as does the Steuerberater.:

 

 

Kurz und knapp

 

·         Sie wohnen in Deutschland?

 

·         Sie haben im Ausland gearbeitet?

 

·         Sie waren in diesem Land sozialversichert?

 

·         Sie erfüllen die übrigen Voraussetzungen für eine Rentenzahlung aus dem Land, in dem Sie tätig waren?

 

·         Sie erhalten tatsächliche Rentenzahlungen aus dem Ausland?

 

Wenn Sie alle Fragen mit Ja beantwortet haben, sind Ihre Renten aus dem Ausland grundsätzlich in Deutschland zu versteuern.

 

Which means, if you have answered the questions with yes. Then your UK State Pension is taxable in Germany. 

So I don't get it?. Look forward to your comments on this, and then I'll promise to be still (laugh).

 

Have just found this: 

In manchen DBA gibt es noch sogenannte Rückfallklauseln. Diese erlauben es Deutschland die Renteneinkünfte zu besteuern. Das gilt aber nur, wenn sie der Staat aus dem die Rente stammt tatsächlich nicht besteuert. Solche Klauseln sind beispielsweise in den DBA mit folgenden Ländern geregelt:

Bulgarien
Dänemark
Großbritannien
Irland
Luxemburg
Neuseeland
Ungarn

So basically, it means if I don't pay tax in the UK. I have to pay tax on my pension and fill out the form AUS-R. As I thought in the first place. What do you reckon?