Overseas Income for spouse of Crown Servant

I am the spouse of a crown servant who is serving in the Armed Forces in Germany. I live in Germany with my partner under the North Atlantic Treaty, Statement of Forces Agreement, which provides me a temporary residency permit exemption. Since arriving in Germany, my partner and I have declared that we have a UK tax residency for Common Reporting Standards to our UK bank. We also acknowledge that we can access UK tax credits per TCTM02050 - Entitlement: Residence rules: Crown servants posted overseas. As the spouse, I have recently begun temporary work in Germany and pay German tax on that income, which is then transferred to a UK bank. However, when I use the UK RDR3 residency test owing to this new employment, I thus appear to have a German tax residency in view of HMRC, which potentially contradicts my status of UK tax residency for CRS and TCTM02050. Furthermore, my situation does not appear to be recognised by the double taxation agreement between the UK and Germany. Therefore, I have two questions: 1. Is my German-taxed income, which is paid into a UK bank account, liable for UK tax as overseas income? 2. Does this income need to be declared in a tax return?

Hi Scott Allardice,
The partner of a Crown servant posted overseas who is accompanying the Crown servant posted overseas shall be treated as being in the United Kingdom when he/she is either—
(a)in the country where the Crown servant is posted, or
(b)absent from that country in accordance with regulation                                                                                                                                                                                                                    as such you are still classed as UK resident and the income from Germany will be classed as foreign income to be declared in the UK - Tax on foreign income
Thank you.

So, to confirm, the ‘TCTM02050 - Entitlement: Residence rules: Crown servants posted overseas’ (referred to in your reply) takes precedence over the ‘RDR3 Statutory Residence Test’ when determining my tax residence?

Hi Scott Allardice

Yes that is correct

Thank you

Im a uk crown servant posted overseas with accompanying spouse who is a non-british/non eu citizen at least for tax year 23-24 when she had EU settlement scheme settled status. Tax year 24-25 she acquired british citizenship. Based on the answer above I believe she would be treated as being resident in the UK and entitled to a UK tax allowance although had contradictory advice on this previously so grateful for clarification on this point. We were living in the UK prior to being posted overseas.

Hi Tax  Michael,
If your spouse is living/working at a UK embassy then this is classed as UK soil, if not, they are treated based on their tax residence as described at RDR3 -
RDR3 Statutory Residence Test
Thank you.