Pension from Germany and UK

67 posts in this topic

42 minutes ago, Gambatte said:

I was resident and employed in the UK until 2013 when I moved to Germany. Since then I've continued to pay voluntary NIC in the UK.

 

This means that are claiming them in line 6 (or in line 5) of Anlage Vorsorgeaufwand, since UK NI contributions are tax-deductible. 

And you will be sending your Finanzamt proof for your UK NI contributions.

--> then please also take care to check that the Finanzamt really did consider them in the Bescheid.

 

The problem is that if the caseworker at the Finanzamt is sloppy, he/she will simply query the Finanzamt database for the German social security contributions, which will overwrite the values from your filed tax return, i.e. will delete your UK NI contributions and will then not make a second pass through the tax return to also manually fill in the non-German contributions you had claimed for.

3

Share this post


Link to post
Share on other sites
21 minutes ago, PandaMunich said:

This means that are claiming them in line 6 (or in line 5) of Anlage Vorsorgeaufwand, since UK NI contributions are tax-deductible. 

Yes I do.

Although some years in the past it simply didn't cross my mind these were tax deductible (I thought only "private" pension contributions were tax deductible, these being to a government I though they were not)

 

21 minutes ago, PandaMunich said:

And you will be sending your Finanzamt proof for your UK NI contributions.

--> then please also take care to check that the Finanzamt really did consider them in the Bescheid.

I will only if/when they ask.

Right or wrong, I somehow thought this was/is the best strategy when dealing with the FA, never send them docs they don't explicitly request (of course I will always have the doc ready, in case they do ask).

Or I better send them even if they don't ask?

 

21 minutes ago, PandaMunich said:

--> then please also take care to check that the Finanzamt really did consider them in the Bescheid.

 

The problem is that if the caseworker at the Finanzamt is sloppy, he/she will simply query the Finanzamt database for the German social security contributions, which will overwrite the values from your filed tax return, i.e. will delete your UK NI contributions and will then not make a second pass through the tax return to also manually fill in the non-German contributions you had claimed for.

Thanks for pointing this out!
 

 

0

Share this post


Link to post
Share on other sites
15 minutes ago, Gambatte said:

I will only IF and WHEN they ask, not before.

Right or wrong, I somehow thought this was the best strategy when dealing with the FA, never send them docs they don't explicitly request.

 

Even though that is the official rule: "only send Belege after the Finanzamt asks for them", in this case I would still send the proof for the paid UK NI contributions, unasked.

That way, you make sure that the proof will be part of your folder at the Finanzamt, and if they then still "forget" about them, it will clearly be the Finanzamt's fault.

 

2

Share this post


Link to post
Share on other sites
21 hours ago, Gambatte said:

Is this not the case for every plan that is officially labeled "pension"?

 

No, not necessarily.  A simple private pension plan (Kapitallebensversicherung) can be cashed in at any time and thus in case of a personal bankruptcy the courts will force the surrender of the value to pay out to the creditors. Same is possible with a RIESTER pension plan.  A company pension plan (bAV-Direktversicherung, for instance) cannot be surrendered before you reach pension age. But when you reach retirement, there is a cash-option. In such a case it would also be possible to force a bankrupt person to cash in and turn over the accumulated capital to the creditors.

Only a RÜRUP pension, because it does not include any cash-option at all is safe from such proceedings. Having said that: there were cases reported that if people tried to put in large sums of capital shortly before declaring bankruptcy and thus withhold the capital from creditors, the repayment of such monies can be enforced by the courts.

 

Cheerio

 

I am a professional independent insurance broker, financial adviser, and authorised advertiser. Contact me.
2

Share this post


Link to post
Share on other sites
1 hour ago, PandaMunich said:

This means that are claiming them in line 6 (or in line 5) of Anlage Vorsorgeaufwand, since UK NI contributions are tax-deductible. 

Panda, I assume the same goes for my other half who is electing for unlimited liability treatment and who will be paying a voluntary NIC year in 2022?

0

Share this post


Link to post
Share on other sites
17 minutes ago, GaryC said:

Panda, I assume the same goes for my other half who is electing for unlimited liability treatment and who will be paying a voluntary NIC year in 2022?

Yes.

1

Share this post


Link to post
Share on other sites
3 hours ago, GaryC said:

You only ever pay one type of voluntary NIC - either Class 3 or Class 2

That is correct, and that was the administrative error they had made. I am waiting for the letter for the pensions forecast...although last time I think it took a couple of months to turn up!

0

Share this post


Link to post
Share on other sites

Good stuff.  But have you also checked whether you can pay Class 2 at £158 per year, rather than Class 3 at £800?  If you can it is a complete no-brainer to pay up missing years.  Also, if you have access to the Government Gateway, you can see your NI record and Pension Forecast online.  If you only left the UK a few years ago, you may well have already set it up and it should still work.

 

0

Share this post


Link to post
Share on other sites
3 hours ago, Gambatte said:

If you work in Germany, I don't think you have a choice regarding paying German contributions.

Of course how daft of me to overlook, I suppose all of you who are employed would be paying into the German system (and assumedly maintaining the remarkably cheap UK voluntary contributions)! Being self-employed, there hasn't been the same obligation on me, hence my question.

0

Share this post


Link to post
Share on other sites
1 minute ago, GaryC said:

But have you also checked whether you can pay Class 2 at £158 per year, rather than Class 3 at £800?

Yes, that was the error which led to overpayment (compounded in this thread by my error of again confusing the classes in my earlier post). I can, and once again now do, only pay the lesser sum.

0

Share this post


Link to post
Share on other sites
22 minutes ago, dstanners said:

Yes, that was the error which led to overpayment (compounded in this thread by my error of again confusing the classes in my earlier post). I can, and once again now do, only pay the lesser sum.

Excellent - all makes sense now...

 

0

Share this post


Link to post
Share on other sites

Panda,  if I understand what I have been reading correctly, then, following an EuGH decision, NIC-type payments (Pflichtbeiträge an eine berufsständische Altersversorgungseinrichtung) should also be tax-deductible for those subject to limited liability treatment, though, I think/fear, only for payments into schemes in EU/EWR countries?

 

Presumably therefore, if a UK resident subject to limited liability in Germany makes NIC payments they are not deductible against their German taxable income - another gift from the Brexit gift that keeps on "gifting"...  And annoying, as I must make quite significant NIC payments between now and 2024, which would have reduced my German tax exposure quite nicely for 2022 to 2024, but hey ho...

0

Share this post


Link to post
Share on other sites
16 minutes ago, GaryC said:

Panda,  if I understand what I have been reading correctly, then, following an EuGH decision, NIC-type payments (Pflichtbeiträge an eine berufsständische Altersversorgungseinrichtung) should also be tax-deductible for those subject to limited liability treatment, though, I think/fear, only for payments into schemes in EU/EWR countries?

You are, I think, alluding to this EuGH ruling of 06.12.2018 (C-480/17 "Montag"): https://dejure.org/dienste/vernetzung/rechtsprechung?Gericht=EuGH&Datum=06.12.2018&Aktenzeichen=C-480%2F17

However, even if the UK had still been in the EU, this ruling still wouldn't have applied to you.

It only applies to mandatory contributions to German Versorgungswerke (which is where certain professions like lawyers, tax advisers, architects, engineers, pharmacists and medical doctors have to contribute public pension contributions instead of to DRV - Deutsche Rentenversicherung) that these professions need to pay, in order to be allowed to exercise that activity in Germany.

 

2

Share this post


Link to post
Share on other sites
6 hours ago, PandaMunich said:

This means that are claiming them in line 6 (or in line 5) of Anlage Vorsorgeaufwand, since UK NI contributions are tax-deductible. 

 

Which unfortunately I did not realise was possible when I made 10 year's payments back in 2016.

 

I did do this (probably having been alerted by Panda) after I made the final single payment in May 2017.  I had a letter from HMRC confirming the receipt of the sum for that one year & enclosed it with Anlage Vorsorgeaufwand.  It worked!

1

Share this post


Link to post
Share on other sites
11 minutes ago, PandaMunich said:

You are, I think, alluding to this EuGH ruling of 06.12.2018 (C-480/17 "Montag"): https://dejure.org/dienste/vernetzung/rechtsprechung?Gericht=EuGH&Datum=06.12.2018&Aktenzeichen=C-480%2F17

However, even if the UK had still been in the EU, this ruling still wouldn't have applied to you.

It only applies to mandatory contributions to German Versorgungswerke (which is where certain professions like lawyers, tax advisers, architects, engineers, pharmacists and medical doctors have to contribute public pension contributions instead of to DRV - Deutsche Rentenversicherung) that these professions need to pay, in order to be allowed to exercise that activity in Germany.

 

Having taken another look, that is indeed what I had found.  Thanks for confirming the position.  At least I don't need to get cross at Brexit this time...  

0

Share this post


Link to post
Share on other sites
3 hours ago, HEM said:

Which unfortunately I did not realise was possible when I made 10 year's payments back in 2016.

I'm sorry for you.

But this makes me feel slightly less stupid, knowing it's not only me.

I was of course aware that "private" pension contribution are tax deductible, in Germany like probably everywhere else. But because these are contributions to a government pension, I stupidly thought they were not deductible.😭😳

0

Share this post


Link to post
Share on other sites

Wait, what? Voluntary NIC's are tax deductible here? So Irish PRSI (our NI) contributions towards an Irish state pension would also be I assume?

0

Share this post


Link to post
Share on other sites
5 hours ago, HEM said:

Which unfortunately I did not realise was possible when I made 10 year's payments back in 2016.

 

Same trap - different numbers... my 10 year payment was made in 2018 .

This Test.de page suggests I can badger the FA to correct my Bescheid 

for the previous 4 years.

 

Can anyone confirm how far back this goes (before the FA laughs me down the road) ?

 

0

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!


Register a new account

Sign in

Already have an account? Sign in here.


Sign In Now