Tax on German pension

1) You fill out the d/d form "Formular für SEPA-Lastschriftmandat (englisch)" from the Finanzamt Neu Brandenburg (RiA) website. If you click on "Formulare" and then on "Downloadcenter Formulare" in the box on the right your will find it in the list of forms under the heading, "Formulare und Hinweise für das SEPA-Lastschrifteinzugsverfahren". 2) If you set-up the d/d then broadly yes, but only if you have elected to have RiA assess you absent a tax return (Amtsveranlagung). If you do not elect for that treatment you will need to send a paper tax return each year without being prompted to do so! The form for this is also on their website and is called "Antwortformular englisch - Reply slip". Once that is in place you will receive a tax assessment each year once RiA have worked your case and tax will be taken automatically on the due dates, which I think are linked to the date the assessment is issued. (You have a right of appeal but I am not sure what happens about paying tax is you exercise that right when you receive your assessment). There is also a form to enable you to communicate by normal email. We are just getting up and running with all of this as my other half was able elect to be treated as if they are resident (a total tax fiction) which opens up access to the German personal allowance (normally non-residents do not qualify for any allowances or reliefs against their German-source income). This meant that for the first few years there was no tax to pay. However, this is only possible if at least 90% of your taxable income is German-source, OR, your non-German-source income is lower than the German Personal Allowance (Grundfreibetrag). Worth looking at if your UK income is less than 10,347€ for 2022. Anyway, my first tax assessment prepared by RiA shows an amount of tax due, which was collected by d/d on the due date. I had emailed them to confirm that they had received my d/d form and asked if they needed anything further - the answer was "no" and that they would send the assessment as and when as they are inundated. RiA will now take payments on account (POA) for tax year 2023 every 3 months (September, December and March for me), before (I assume) next year's assessment is issued with a balancing figure, then onwards and upwards with the next POAs... Hope this helps - it can seem a little daunting and to be honest, the German tax office is a little less customer-focused than HMRC, so we need to be thankful for what we have in the UK, lol.

Thanks for your help Gary. Can you please advise: 1) Which box do I need to tick at the bottom of the page: "This direct debit mandate is valid for all payments under the above tax number" or one of the other boxes below? 2) If I send the direct debit form this week, do you think they would process it in time for the due date of 18/20/23 or would you advise paying the first tax bill through the bank and setting up the direct debit at a later date? 3) Is there any cost involved in paying by SEPA direct debit? Thanks very much for your help. You ought to be working for the German Tax Department as an advisor!

Hi Jea7,

You would need to check this with the German tax authorities as this is not for HMRC to comment on.

Thank you.

Hi Jea7 1) I just ticked the one you mention. 2) that's a good question. I think I would be minded to pay this time and get things set up in good time for the next payment. 3) I have a € account and there are no costs. If you are using a £ account then there would be the exchange cost but you could ask your bank, just to be certain. You'll be making your first manual payment using SEPA anyway, i.e. entering their IBAN in your international payments part of your chosen bank, so that may answer your question. SEPA is just a Europe-wide system to keep costs down, so far as I know... I think I'll stay retired and just help people where I can, lol

Question to HMRC Admin10: I'm a bit confused. In response to Jea7 you mention that the German state pension doesn't need to be declared in the UK (because it's taxable in Germany). In response to Gary C, you mention that the foreign pension that is not taxable in the UK because of a DTA (as is the German state pension) needs to be declared in box 19 (on page TR7 of SA100). Do I need to declare my German state pension in the UK or not?

 As HMRC has said, the fact that one has a foreign pension, irrespective of whether it is, or is not, taxable in the UK, means you are cordially invited to submit a tax return each year. Also as stated, the German state pension is taxable only in Germany by virtue of Article 17(2) of the tax treaty, so you do not need to declare it as taxable income in the UK. However, if you look at the notes to the Foreign pages (page FN8) , you can see that in such circumstances you need to put a specified form of words into the "any other information box", Box 19, to alert HMRC to the fact that you have foreign income that is not taxable in the UK, hence, no foreign pages completed as part of the return. You do not enter the amount of the pension in Box 19, just the details requested. FN8 says, "If you have a pension that’s not taxable in the UK because of a DTA, give full details of the pension’s payer, pension and relevant DTA in the ‘Any other information’ box on your tax return." Does this clarify the position - one my wife and I have been "enjoying" for the past few years?

Thanks, Gary- what a joy! Welch ein Jubel!

Indeed, though I ran through the "do I need to submit a return" tool on GOV UK and it says I don't need to submit a return. Question 6 asks "Do you need to pay tax on any of the following?", one of which is "Income from outside the UK". As the answer to that is "No" because I do not need to pay tax on said income as it is exempt from UK tax under the DTA, it would seem that, either the tool cannot deal with complexities of that nature, or, if income is exempted under a treaty, then the need to send a return is lifted. One for HMRC to opine on...

Hi IKoenn
The German state pension does not need to be declared.
If you have any other type of German pension, this does need to be declared on the SA106.
You can put on the additonal information that you have the german state pension but under Article 18 of the DTA, it is not taxable in the UK.

Actually, it's Article 17, not Article 18 but be that as it may, does that still mean that people in receipt, only, of a German State Pension exempted from UK tax under Article 17(2), are still brought within self assessment, even though they have no taxable foreign income? Whatever the answer, it would be helpful if such circumstances were dealt with in the SA return tool and in the guidance more generally.

Hi
If this was the only reason that you were previously in self assessment, then there is no requirement for this to continue as the German state pension is only taxable in Germany.

Thanks Admin 10. That is what I was hoping. Up until now there has been another reason for being in SA but as of 2024/25 that reason falls away. I'll give the SA team a call at some point after the 2023/24 return is submitted...

1 Hello and many thanks to all for the helpful information provided on taxation of German pensions in UK especially HMRC, Gary C, Jea and others. 1 I have tried (unsuccessfully) to register on the Toytown Germany website in order to raise my own particular pension issues there – is the site still active? If no longer open to new members, can anyone suggest an alternative forum where similar tax issues can be raised for discussion? 2 My own personal situation is as follows: after 5 years working on the German net and 1 year in France (many, many years ago !), I started to receive a German State pension (DRV) in 2013 and a smaller French Pension from CARSAT (Assurance Retraite Normandie) in January 2014. (Both paid in Euros to my German bank). My wife also started to receive a DRV pension in 2020. I have now become aware that my German pension is taxable at source in the “Kassenstadt” (Germany) DTA 17.1 and also how this is calculated (as beschraenkt steuerpflichtig) but am still unsure exactly where tax is payable on my (small) French State/social security pension. Do the UK and France have a similar DTA arrangement (as the UK has with Germany) and if so, in which country is tax payable ? (If payable in France, on what basis is this tax calculated ?– and where is this information to be found?) . 3 Gary, I was v. interested to read your comment that German tax can be assessed on an "unbeschraenkt" basis - in order to qualify for the full Grundfreibetrag allowance - if the claimant's other income is less than this amount. Where can I find out more about this? In particular, what other income is included here and what sort of evidence/certification does the Finanzamt look for ? Keep up the good work and thanks for any help you can offer

Hi Bigjock, Toytown is still working but you need to disable Java in your browser for that site as something at their end is not working properly. If you search the web for how to do that you might/should be able to register. The state pension (social security pension) is actually dealt with in Article 17(2) of the UK-Germany DTA. The state pension is in Article 23(1) of the UK-France DTA and taxing rights are awarded to the UK, so it would need to go on the foreign page of your SA return in the UK. HMRC will no doubt provide you with the relevant links... Your German tax office will be Neubrandenburg (as we cannot post links, search for "finanzamt-rente-im-ausland"). When on that site (the German version is more comprehensive if your German is sufficient), go to "Who? What? How Much?" and then "How much do I have to pay?" and it explains the two categories of Limited Liability (beschränkte Steuerpflicht) and Unlimited Liability (unbeschränkte Steuerpflicht). If you submit a UK tax return you can use that as proof of income even though the tax years do not coincide - you use the tax return that captures the year that starts during the German tax year, so 2022/23 for 2022 and so on. Alternatively you can complete and send a form "Non-EU/EEA Certificate" (on their download page) to HMRC for "stamping", which you then send to the FA.

Many thanks for your advice Gary - my brain is beginning to hurt! From your response (above) am I right in thinking that I should complete Box 19 (SA return) with the wording - as you suggest in the thread above - that (1) I receive a DRV pension taxable only in Germany but (2) also complete the Foreign pages with details of my French Social Security pension as taxable in UK (this will complicate matters somewhat, especially going back over the past years !) Re Toytown I followed your advice about disabling Java and trying to register but this time got a message to the effect that I should install Java in order to complete the security (pictures). Any suggestions? I am disappointed that I have received no response from HMRC regarding my specific queries (above) regarding my small French social security pension and will raise this again in a new thread in the hope that it will get a response from HMRC along with their interpretation of the DTA and hopefully some clarification. (I note that the DTA UK/France Article 23 (1) which you quoted above deals with " Other Income" whilst Article 18 "Pensions" and Article 19 "Government Service". (I should clarify that I spent a year as a teaching assistant in France as part of an official exchange scheme). I presume that Article 18 applies only to French residents and Article 19(2) applies "Pensions and other similar remuneration paid by, or out of funds created by, a Contracting State or a local authority thereof, or, in the case of France, a statutory body,to an individual in respect of services rendered to that State, authority or statutory body shall be taxable only in that State. However, such pension shall be taxable only in the other Contracting State if the individual is a resident and a national of that State without being also a national of the first-mentioned State". Then there is the Article 23(1) you refer to dealing with "Other Income". Have you any idea which Article is relevant to my case? Alles Gute!

Hi Bigjock, Re the UK tax return, that would be my understanding but HMRC could confirm that for you. Re Toytown, I have no further ideas. I know someone recently managed to register. If I can get hold of them, I'll ask and feed back. Re the UK/France DTA, Article 23 is correct for state pensions. Article 18 deals with pensions "paid in consideration of past employment" and that is not the case for a social security pension. This is why it comes under the "Other Income" Article. So, if you have a French state pension it is Article 23; if you have a French occupational pension it would be Article 18, unless it was in relation to government service, when it would be Article 19. If you are receiving an occupational pension from your teaching assistant role then it would be Article 18, unless that pension falls within the list of government service pensions. In the UK TAs are in the local government pension scheme, which I think would be Article 19 but I have no idea who the French employer is for TAs (as opposed to teachers) and what pension they offer, over and above any social security, i.e. state pension. You just need to know what that French pension is.

Hi again Gary and many thanks for your advice above (and also in the other thread). Yes, HMRC response is indeed interesting (this is why I was hoping to check out with Toytown). I have asked HMRC for clarification regarding the change (which they referred to) in August 2017 and what arrangements were in place prior to this date. FYI My French pension is a basic State pension (“retraite de base” under the general scheme and amounts to less than €300 p.a. As you suggested I now assume this to be liable to UK income tax under Article 23 DTA France/UK (Other Income). I will follow up on your advice and contact RiA Neubrandenburg by phone (the website is pretty comprehensive). Have you any idea whether they will still hold a record of my previous tax number and a record of my DRV pension history since 2013 (or should I approach DRV for this) ? Alles Gute

I am trying to complete my Self Assessment online and having some difficulty. I receive a German State Pension and am resident in UK. For several years I declared my German State Pension as Foreign Income and was taxed by HMRC - until I discovered that I should be paying tax in Germany, not UK. I had to pay several years back-tax owed to the Finanzamt (plus penalty for late payment) but was able to reclaim the tax I had paid in UKJ from HMRC (thank you). I was advised that in future I should not declare my German pension on my UK tax return to avoid further complication. Having discovered this thread, I realise that I should declare that I receive the German pension in the Foreign Income section of the SA but add a note in the Any Other Information box (which I have copy-psted and entered, slightly edited, from this thread). My difficulty is that the software asks for the amount of my foreign income and will not let me proceed unless I enter the amount. This then appears in my tax calculation and I will be taxed on my income plus the German pension. My question is, at what point is the note I added in the Any Other Information box checkjed and acted upon? Does a tax official look at these notes and revise the calculations accordingly or is it all done by software (which might or might not appreciate my situation? Or should I go back and declare the total pension as £0?

Hi
When filing online, there is no manual intervention so any comments would not be looked at unless your return was selected for a review.
If you had previously declared the pension as other income, you will need to write in for earlier years to have this amended.
The German state pension is now only to be taxed in Germany so you do not need to incude this anywhere.
In order to remove the foreign page from the return, scroll down on that page and at the right hand side there is a line in red - delete foreign section - click on that and it will remove it.

Thank you, HMRC Admin 10, much appreciated! John