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Posted Mon, 05 Feb 2024 18:23:45 GMT by Scott Allardice
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?
Posted Wed, 07 Feb 2024 14:37:24 GMT by HMRC Admin 20 Response
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.
Posted Wed, 07 Feb 2024 19:16:45 GMT by Scott Allardice
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?
Posted Tue, 13 Feb 2024 12:44:40 GMT by HMRC Admin 5 Response
Hi Scott Allardice

Yes that is correct

Thank you
Posted Sat, 08 Jun 2024 22:55:51 GMT by Tax Michael
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.
Posted Thu, 13 Jun 2024 08:50:14 GMT by HMRC Admin 20 Response
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.
Posted Sun, 22 Dec 2024 07:09:40 GMT by Watson
Good Morning, I am a crown servant posted abroad at a BFPO address, on a Sovereign Base Area. My British wife is accompanying me and she contributes to a stakeholder pension. Is her residence classed as UK for stakeholder pension purposes? I.e can she continue to contribute and receive tax reief? Also, she is now considering claiming her pension, can she claim the pension while accompanying me abroad? (We realise that after the 25% tax free, it will liable for UK income tax.) Thank you.
Posted Thu, 09 Jan 2025 15:39:49 GMT by HMRC Admin 20 Response
Hi Watson,
When your wife accompanied you to the overseas soverign base, she left the UK for tax purposes, even if you are housed on the base.  
She would be able to pay into her pension scheme up to the maximum of £60,000 or her annual earned income if lower in the tax year that she left the UK.  
After the tax year has ended, she would only be allowed to pay in a maximum of £2880 into her pension scheme and receive tax relief, plus any unused allowance carried
forward from the 3 previous tax year (PTM055100 - Annual allowance: carry forward).
If your wife commences receipt of her pension and it is a non UK government pension, then it may be taxable in the country in which the base is located and not in the UK.  
Your wife will need to check if there is a tax treaty with that country (Tax treaties) and use form DT-Individual to apply for relief at source from UK Income Tax and to claim
repayment of UK Income Tax (Double Taxation: Treaty Relief (Form DT-Individual) some countries have a specific version that should be used.
Thank you.

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