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Where Taxpayers and Advisers Meet

German income tax

tatort
Posts:5
Joined:Sun Apr 09, 2017 9:00 am
Re: German income tax

Postby tatort » Thu Apr 27, 2017 2:31 pm

I've received a reply from HMRC which I will resume. German social security pensions are not taxable in the U.K. I can write to HMRC to have 2015/2016 amended, 2013-2014 and 2014/2015 cannot be amended but I can claim overpayment relief. The years up to 2012/2013 are out of date and cannot be reviewed. So I can only assume that in the case of 2010 up to April 2013 HMRC will not refund the overpayment and people will end up being taxed in both countries. As I've said before we will have been well and truly cheated through the combined incompetence of both tax authorities. As far as I can see it has never been pointed out by the Germans that the pensions were taxable in Germany and HMRC have been quite happy for people to declare income that had nothing to do with them. Comments welcome.

Taliskerplease
Posts:7
Joined:Fri Mar 17, 2017 5:21 pm

Re: German income tax

Postby Taliskerplease » Thu Apr 27, 2017 2:47 pm

Tatort,
I've received pretty well the same information.
I've told them I want this escalated to their dispute resolution center, and I have contacted my local (Conservative) MP who has said he is willing to meet and take this up with HMRC on my behalf.

The British tax authorities must be among the most bürgerfeindliche organizations in existence. The sheer unfriendliness and unwillingness to enter into a person-to-person discussion about such straightforward matters almost defies comprehension.

God help us all in our dealings with HMRC if we do finally end up with a hard Brexit.

I though these people were "public servants"?

tatort
Posts:5
Joined:Sun Apr 09, 2017 9:00 am

Re: German income tax

Postby tatort » Thu Apr 27, 2017 5:58 pm

Hi Taliskerplease,
Great to get a quick response. It really is disgusting that we should be out of pocket. Over the last couple of years I've rung up at least three times with regard to exactly how to fill in the UK tax return in respect of the German state pension and not once was I told that it was not taxable in the U.K. This would indicate that the so-called advisers I spoke to knew nothing about the situation (but obviously they should have done) so clearly we should not be penalised for their ignorance. I haven't yet received a letter from Neubrandenburg but I will have to contact them soon with a view to paying tax on my 2017 pension and then, of course, they will be asking for all the back tax. Good luck with your MP and keep us informed.

Upset
Posts:1
Joined:Sun Jun 04, 2017 11:44 am

Re: German income tax

Postby Upset » Sun Jun 04, 2017 12:19 pm

You are not the only one. My partner who only has a small German state pension in payment from 2011, and since 2013 the basic UK state pension, has been sent tax demands from Germany dating back 6 years with interest! HMRC did not know that German state pensions are taxable only in Germany. They were pleasant but lacked knowledge encouraging him to apply for a Certificate of Residency when that would be entirely useless in the circumstances. We actually got more information from forums like this one than any other source. The Germans sent us a page of HMRC's Double Taxation Relief Manual. This page was first published in May 2016 and covers Article 17(3) which states that German state pension is taxable in Germany. Of particular interest, however, is the following " The provisions of 17(3) will not apply if Germany does not effectively tax the pension." We consider that sending a tax demand 6 years late and with interest is ineffective and have written to say so. His income is below the tax threshold in UK, he has no property and no savings. He cannot pay, he was not told anything about this tax when applying for the pension or at any time since by any authority here or in Germany. Given that he has no funds but has lived on his small income how are the Germans to collect? What happens when he does not pay?

Taliskerplease
Posts:7
Joined:Fri Mar 17, 2017 5:21 pm

Re: German income tax

Postby Taliskerplease » Sun Jun 04, 2017 3:37 pm

I seem finally to be fairly close to resolution of my issue.

I made contact with Shaw Gibbs (shawgibbs.com) and spoke to a very informed and helpful young lady called Hannah Jevons, who told me how best to approach this. She did this free-of-charge but did say that should I need further assistance (e.g. when HMRC proved difficult) they would help but their charges would then amount to something in the order of 1,000pds.
https://www.shawgibbs.com/team/hannah-jevons

HMRC allows you to re-submit your tax returns for the last 3 to 4 years (there is a tax year related cutoff date). If you go to their website the forms (SA100) are only available back to FY2014 - but I cut & pasted an old form and used that to submit for FY2013 as well as for 2014-2016.

When re-submitting these, you must NOT complete the Foreign Earnings section - just leave it out completely (at least as far as it refers to receipt of the German State Pension. Obviously if you enjoy other taxable foreign earnings such as property rentals etc they will have to be declared). Refer in your covering letter to the fact that you have deleted the Foreign Earnings sections and give as reason that the German authorities are taxing these payments at source as they are entitled to do under the Double Taxation Agreement Article 14.2.

Within 3 weeks I received a payment of just over 3,000pds - which is actually about 3,500pds less than I expected.
I promptly wrote off again explaining that their payment did not match my calculations; needless to say they had not laid out their calculation in a covering letter. My calculation reasoning was that the 20% tax rate multiplied by each year's German payments must roughly equal the amount I am due (about 6,500pds).
I'm still awaiting a detailed reply regarding how they worked it out and why their payment is less than half of what I expected.

Last point, which may be important point for some: I am now under the UK tax threshold and HMRC have advised that I no longer need to submit Self Assessment forms each year. I now need to inform my bank that I would like my savings paid Gross of UK tax otherwise they will deduct 20% tax.

Hope this proves of some help.

Taliskerplease
Posts:7
Joined:Fri Mar 17, 2017 5:21 pm

Re: German income tax

Postby Taliskerplease » Thu Jul 13, 2017 12:49 pm

As I mentioned, the 1st sum received was about 3,500 less than my calculations had indicated.

A few weeks later, after writing again, I received a short letter advising that I would receive another 3,600 or so - NO explanation and no details whatsoever.
It appeared in my bank account very quickly.

Much ado about very little, but every little helps as Tesco says.

DannyBoy2
Posts:1
Joined:Wed Aug 30, 2017 9:21 am

Re: German income tax

Postby DannyBoy2 » Wed Aug 30, 2017 9:38 am

Seems like I found this forum a bit too late!
I am UK resident, retired 2011 and have a small German State Pension paid to my bank in UK.
Like others I have received a letter from Neu Brandenburg enclosing the page from the HMRC Double Taxation Relief Manual from 2016.
I contacted HMRC who told me that they were in order to have taxed my GSP prior to the 17(3) page being effective in September 2016.
I have returned the reply page to Germany stating that I have paid tax at 20% on 90% of monies received and enclosed an HMRC UK Residency statement hoping this will appease the Germans who are set to assess me for the tax years 2012 - 2014.
Does anyone have any updates on how they fared?


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