[....] So I will be sending off the info to show that I have paid tax in the UK in the first instance and be contacting the UK tax authorities. It seems logical that if Germany is making the payment, it should have any tax due and from the letter it seems that this will be the case going forward. [...]
I thought I share the essentials of a letter that I received from HMRC in reply to my doing what everyone here recommends, namely write to them and request correction of past UK Tax Returns. I had written to them requesting re-opening of my 2012-13, 2013-14 and 2014-15 self-assessment.
HMRC wrote that German State Pension is now dealt with under Article 17(2)
of a UK-German double taxation agreement, which came into force in the UK on 06/04/2011
, and that this "awards Germany with the sole right to tax this pension"
and that it is therefore exempt from UK tax. They then told me that I was due a refund. This has already happened for 2014-15 - it was paid in late May - but not yet for the earlier years.
HMRC then pointed out that "UK domestic legislation only permits HMRC to review the previous 4 financial years for any taxes incorrectly paid."
As we are now in 2018-19 and I wrote to them only in April, the fourth year back is indeed 2014-15. However, they continued, "there are provisions within the UK/Germany double taxation agreement which, in certain circumstances, may allow HMRC to review the previous 6 financial years in cases where there has been (or will be) taxation that is in contravention of the double taxation agreement"
, and that this applied to me. Since I had provided "sufficient information"
for them to initiate this process (I had sent them copies of the German Einkommensteuer-Festsetzung
and stated that I had paid the German tax due in November) they will take "unilateral action to relieve double taxation for the years 2012-13 and 2013-14"
, which may, however, take up to six weeks.
So, nothing really to complain about, and I personally think HMRC are handling this very well!
Finally, you may all be interested to know that there is a specific address for queries like this:
BAI - Personal Tax International
HM Revenue and Customs
BX9 1AU (no city!)