Claiming UK pension in Germany

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I will be 65 in a few days and will be eligable for my UK pension in July and my German pension in October. I have a dual British/German citizenship and am resident in Germany but do own a flat in the UK which I use when visiting my 87 year-old mother and a UK bank account for paying the utilities etc. on my flat.

 

My question is this: Do I have to let the Deutsche Rentenversicherung apply for my UK pension, in which case I might lose the index-link increases after Brexit, or can I apply myself and have the pension paid into my UK bank account and declare the income on my German income tax form.

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30 minutes ago, SteveYoung said:

My question is this: Do I have to let the Deutsche Rentenversicherung apply for my UK pension, in which case I might lose the index-link increases after Brexit,

Yes - you must apply via your local RV office who will forward the paperwork to RV Berlin (who in my case did nothing for 3 months) who then forward it to the UK for processing (who also did nothing for 3 months).  What happens with index-linked changes is another unkown.

 

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or can I apply myself

No

 

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and have the pension paid into my UK bank account

You can choose to have it paid into your UK account or via Worldlink to your German acoount.

You can also choose to be paid every 4 or 13 weeks.

 

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and declare the income on my German income tax form.

According to the Dual Taxation Agreement between GB & DE payments from social security are taxable in the country that pays.  The DTA is not dependent on EU membership of either side (can of course be changed if/as both sides see fit).

Thus you have to talk with HMRC about taxation but this is normally favourable to you as HMRC allows you the first 11k GBP tax-free even if you are resident outside the UK (the other way around the DE FA does not - mean b****s)..

 

TT taxation expertin PandaMunich will tell you that the German FA has a sneaky back door to also tax your UK pension called Progressionsvorbehalt.  There is it probably advantageous to have your UK pension paid direct to your German account as the FA will accept the actual values that arrive in your DE account - if you are paid into UK account they will use some ficticious exchange rate that will not be to your advantage (regardless of what rate you get when you later xfer out here).

 

 

 

 

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Thanks for the information, I suspected as much. What about the index-link on the British pension? Does anyone have any idea whether an agreement on this between the UK and Deutschland is likely after Brexit? I know UK pensioners in the USA get this whereas those in Canada don't. 

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16 minutes ago, SteveYoung said:

Thanks for the information, I suspected as much. What about the index-link on the British pension? Does anyone have any idea whether an agreement on this between the UK and Deutschland is likely after Brexit? I know UK pensioners in the USA get this whereas those in Canada don't. 

IMHO thats something the UK decides on its own without referal to other countries (who could not care less).  If the UK wants to double / halve what it pays in pensions its entirely up to the UK.

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On 02/02/2019, 09:21:05, HEM said:

Thus you have to talk with HMRC about taxation but this is normally favourable to you as HMRC allows you the first 11k GBP tax-free even if you are resident outside the UK.

 

 

I agree that this is favourable ... and it's now £11,850.

 

On 02/02/2019, 09:21:05, HEM said:

TT taxation expertin PandaMunich will tell you that the German FA has a sneaky back door to also tax your UK pension called Progressionsvorbehalt.  There is it probably advantageous to have your UK pension paid direct to your German account as the FA will accept the actual values that arrive in your DE account - if you are paid into UK account they will use some ficticious exchange rate that will not be to your advantage (regardless of what rate you get when you later xfer out here).

 

I'd be inclined to think the opposite - if you have your pension paid in pounds into your German bank account, you will get whatever exchange rate your bank uses, which is normally penal. On the other hand, if you receive the pension in pounds in the UK and can choose yourself when to transfer it, you have the opportunity to choose the timing of transfers and gain from better exchange rates (though with the risk of loss), and you can obtain much better exchange rates than your bank will use. 

 

Furthermore, you declare your British income to the Finanzamt in Euros and can therefore choose your own exchange rate, even though you should use the official rate.. I doubt the Finanzamt would challenge it if it looks reasonable.

 

On 02/02/2019, 09:46:45, HEM said:

IMHO thats something the UK decides on its own without referal to other countries (who could not care less).  If the UK wants to double / halve what it pays in pensions its entirely up to the UK.

 

I agree with this, though I personally would be surprised if the UK discontinued index-linking in the short term.

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Don't count on continued Index linked once  Brexit  is done!   As Steve said- Index linked does not apply to ex pat  pensioners in Canada, Australia, despite intense lobbying about the  payment to those in the US!

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I am not completely certain, but I remember looking at this years ago.  Germany and the UK (pre EC EU or whatever) had index linked stuff in place so should be okay.  But not all EU countries.  I will check this out soon when I have a bit of time.   Though you are welcome to do so too!

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One thing that tends to be overlooked is the extent to which the UK has relied on EU labour in recent years.     Who will be getting these pensions? EU nationals who have been working in the UK and retired home.    While our (British) number will dwindle even further without free movement.

 

Will the UK be keen to index huge liabilities that are increasingly going to non-Britons?  Don`t hold your breath.    Cynically, easy UK exchequer saving there.

 

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I went through this four years ago and applied for my German pension through the Rentenversicherung. The DRV automatically sorted out my (minimal) UK pension, which is paid in euros into my German bank account. The exchange rate has fluctuated a lot, but has always been the current rate as given on standard websites. One unexpected bonus was that my wife, who had never paid any NI contributions, was also to receive a 60% pension. I actually phoned the DWP as I didn't want to commit fraud, but was assured she was indeed entitled to a spouse’s pension! Good luck with your retirement!

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2 hours ago, norris green said:

One unexpected bonus was that my wife, who had never paid any NI contributions, was also to receive a 60% pension.

 

Can you pls add some details?

Is your wife German or British? Or is this irrelevant? 

I've got a little while yet, but busy getting paperwork all lined up.  

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59 minutes ago, HH_Sailor said:

 

Can you pls add some details?

Is your wife German or British? Or is this irrelevant? 

I've got a little while yet, but busy getting paperwork all lined up.  

German.  According to the DWP, it was irrelevant, though.

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11 hours ago, norris green said:

One unexpected bonus was that my wife, who had never paid any NI contributions, was also to receive a 60% pension.

Are you sure they weren´t talking about a widow´s pension in case you should pass away?

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1 hour ago, jeba said:

Are you sure they weren´t talking about a widow´s pension in case you should pass away?

 

I don't think so. I receive a small British pension based on the years (21 years) I was married to a Brit. We were divorced 20 years when I applied at 60 and was still entitled. I never worked in the UK due to the kids being small while we lived there at the time.

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14 hours ago, norris green said:

One unexpected bonus was that my wife, who had never paid any NI contributions, was also to receive a 60% pension. I actually phoned the DWP as I didn't want to commit fraud, but was assured she was indeed entitled to a spouse’s pension! Good luck with your retirement!

My original question seems to have been answered but this is also very interesting. Do you mean your wife will recieve a 60% pension after your death or whilst you are still alive? My wife is German and has never paid into the UK NI system but has always paid German and Austria pension contributions. 

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25 minutes ago, SteveYoung said:

My original question seems to have been answered but this is also very interesting. Do you mean your wife will recieve a 60% pension after your death or whilst you are still alive? My wife is German and has never paid into the UK NI system but has always paid German and Austria pension contributions. 

 

Your question wasn't directed at me and I don't know how much percent my British pension is but I'm still receiving it since my ex-husband died 5 years ago. Last year they wanted proof that I'm still alive so they can continue with the payments. 

 

Edit: I also receive a German pension having worked here for a number of years and paying into the German Rentenversicherung.

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6 hours ago, SteveYoung said:

My original question seems to have been answered but this is also very interesting. Do you mean your wife will recieve a 60% pension after your death or whilst you are still alive? My wife

is German and has never paid into the UK NI system but has always paid German and Austria pension contributions.

Same here

6 hours ago, norris green said:

I assume she will continue to receive it after my demise (should I go first!)

 

That is still not clear to me. A widows pension yes, but for a spouse who has never made NI contributions or who only paid the married women's NI contribution I don't think there is anything until the husband dies. I would very much welcome being wrong as it would be very good for my wife, please clarify.

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