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Where Taxpayers and Advisers Meet

British resident in uk receive German Pension

TinaM
Posts: 5
Joined: Wed Apr 17, 2019 11:30 am

British resident in uk receive German Pension

Postby TinaM » Wed Apr 17, 2019 11:56 am

I’ve been a pensioner since May 2018 & now receive state pension, works pension and a pension from Germany.
I filled the online form in as required on the form and declared my foreign pension.
When finished I checked and was surprised that my German pension had been added to my taxable income?
Since I’m aware that my German pension is taxed in Germany ( I’m waiting for them to send me a bill) and I’m aware of the double taxation agreement. I was a bit flummoxed about how to fill in this form.
I phoned the tax office and was told by a lovely lady to simply delete the foreign income section. I told her that I’d written in the ‘any other info’ box and had declared my German pension also mentioned the double taxation agreement. She advised me to remove that statement.
She stated that too many people end up being taxed twice so it’s simpler not to mention the German pension at all.
I did as she’d advised and submitted my return but am now unsure if I’ve done the right thing?

Cap_Scarlet
Posts: 22
Joined: Sun Jun 17, 2018 2:59 pm

Re: British resident in uk receive German Pension

Postby Cap_Scarlet » Wed Apr 17, 2019 12:38 pm

Sorry don't have an answer but wanted to follow as I have the same situation.

Is the pension from Germany a state pension, a works pension or both.

My understanding was that, assuming you are UK resident, then the German pension would be declared as part of your worldwide income. Then you would claim a credit for any tax paid in Germany.

Interested to hear any other answers that deviate.

robbob
Posts: 2800
Joined: Wed Aug 06, 2008 4:01 pm

Re: British resident in uk receive German Pension

Postby robbob » Wed Apr 17, 2019 1:28 pm

My understanding was that, assuming you are UK resident, then the German pension would be declared as part of your worldwide income. Then you would claim a credit for any tax paid in Germany.
I think German pensions can be quirky - there is an old thread on here somewhere that will probably have more useful info than me (i know nowt)

I will try and dig it out and bring it to the top of the listings

robbob
Posts: 2800
Joined: Wed Aug 06, 2008 4:01 pm

Re: British resident in uk receive German Pension

Postby robbob » Wed Apr 17, 2019 1:31 pm

Here is the link to that thread

https://www.taxationweb.co.uk/forum/viewtopic.php?f=6&t=52409

darthblingbling
Posts: 252
Joined: Wed Aug 02, 2017 9:09 pm

Re: British resident in uk receive German Pension

Postby darthblingbling » Wed Apr 17, 2019 1:48 pm

Default position of UK Germany tax treaty is that it is taxable in the country of residence (in this case I am assuming UK) ONLY.

However, as mentioned it is a funny tax treaty and there are some conditions that will mean that it is taxable only in the country of course (Germany). If this is the case I would make a disclosure in the white space notes.

What is certain however is that no tax credit will be available as the tax treaty give sole taxing rights to either country, depending on the facts. I.e. it's taxable in either Germany or the UK only.

darthblingbling
Posts: 252
Joined: Wed Aug 02, 2017 9:09 pm

Re: British resident in uk receive German Pension

Postby darthblingbling » Wed Apr 17, 2019 1:49 pm

Source not course sorry. This forum doesn't let me edit messages...

Cap_Scarlet
Posts: 22
Joined: Sun Jun 17, 2018 2:59 pm

Re: British resident in uk receive German Pension

Postby Cap_Scarlet » Wed Apr 17, 2019 2:00 pm

Reading this:

https://www.gov.uk/hmrc-internal-manuals/double-taxation-relief/dt7909

The key for me seems to be this:

However, under Article 17(3) pensions paid to a United Kingdom resident will be taxable only in Germany where that pension is attributable in whole or in part to contributions which, for a period of more than 15 years, either:

Did not form part of taxable income in Germany;
Were tax deductible in Germany; or
Were tax relieved in some way in Germany.

The 15 years seems to be important and as I was in Germany for 17 years then I assume that makes any pensions I receive (whether corporate or otherwise) taxable in Germany only.

TinaM
Posts: 5
Joined: Wed Apr 17, 2019 11:30 am

Re: British resident in uk receive German Pension

Postby TinaM » Wed Apr 17, 2019 2:09 pm

A bit of clarification to my original post..
The only pension I receive from Germany is a state pension. This is definitely taxed by Germany, I’ve been told by the relevant German authority to wait for them to send me a bill.
This German pension should not be taxed in the uk.
Article 17(2) Uk German double taxation agreement.. doc. DT 7909.

I had, by looking through online sites previously, been led to believe that I should declare it in the foreign income section and mention the pension plus the Uk German taxation agreement in the ‘other info’ section of the online tax form.
But as I found out, doing this meant that it automatically got added to my income & counted toward uk tax, which it shouldn’t .

The advice I got yesterday from the advisor was to delete everything to do with the German pension. I just worried now, I know I shouldn’t be paying uk tax on this pension but am not sure if I should have followed the advisors advise & deleted the info I’d written in the info box 😳

TinaM
Posts: 5
Joined: Wed Apr 17, 2019 11:30 am

Re: British resident in uk receive German Pension

Postby TinaM » Wed Apr 17, 2019 2:15 pm

Reading this:

https://www.gov.uk/hmrc-internal-manuals/double-taxation-relief/dt7909

The key for me seems to be this:

However, under Article 17(3) pensions paid to a United Kingdom resident will be taxable only in Germany where that pension is attributable in whole or in part to contributions which, for a period of more than 15 years, either:

Did not form part of taxable income in Germany;
Were tax deductible in Germany; or
Were tax relieved in some way in Germany.

The 15 years seems to be important and as I was in Germany for 17 years then I assume that makes any pensions I receive (whether corporate or otherwise) taxable in Germany only.

Now I’m even more confused... I spent a long time on the phone to a German official who helped me apply for the pension. The length of time I worked in Germany and paid German taxes is under 15 years. I did however receive forms from Germany regarding tax on my pension. Another phone call to Germany revealed that I should wait for the German tax bill.

darthblingbling
Posts: 252
Joined: Wed Aug 02, 2017 9:09 pm

Re: British resident in uk receive German Pension

Postby darthblingbling » Wed Apr 17, 2019 2:17 pm

State pension is covered by 17(2) yes, so should be exempt in UK.

It shouldn't form part of your taxable income so yes it should be taken off your return. If you want to be transparent you can put a note in the white space area to say that you received a German state pension during the tax year, but this is not taxable in the UK under article 17(2) of the UK/Germany double tax treaty


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