Taxation of Foreign Pensions (France and Germany)

Hello I receive a German social security pension (DRV Berlin) and a very small French social security pension (Carsat Normandie) from past employment (as a teacher in France and Germany). Until now I have declared both pensions in UK (through Self Assessment) and paid tax in the UK as a UK resident. (1) However I have now been led to believe that the German pension may only be taxable in Germany (DTA 17(2)) although I have received no formal communication to this effect from the German tax authorities. Can anyone confirm where tax is payable and, if in Germany, advise me on action regarding past payments made to HMRC through Self Assessment? (2) The above has made me uncertain as to where my French pension is taxable (and if in France, where exactly to declare this and how tax is calculated for non-residents of France). (I find the advice in the DTA UK/France confusing - I presume that Article 18 DTA UK/France only applies to French residents; Article 19(2) applies to "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"; and Article 23 refers to all "Other Income" which might include other pensions not included in the other Articles. Which Article is relevant in my case, where is tax payable and, if in France, can anyone advise me on how tax is calculated for non-residents and on action regarding past payments made in UK through Self Assessment? I look forward to hearing from anyone with knowledge of the taxation of foreign pensions/income or who may have had similar experience in the past.

Hi,

The German state pension is now only taxable in Germany from 1 August 2017. Article 17 of the UK / German double taxation agreement, advises German Government bases pensions are normally taxable only in Germany, except where you are a national and resident of the UK, in receipt of a government pension, then in those cases, the pension is taxable in the UK. If article 17 does not cover your pension, you may consider article 21 other income.

Article 18 of the UK / France double taxation agreement, advises that French government pensions are normally only taxable in France. For a French government pension to be taxable in the UK, you will need to be a national and resident of the uk, but also, not a national of France. If article 18 does not apply to your pension, then you man consider article 23 other income article

If you need to amend your tax returns to remove foreign pensions not taxable in the UK, you can amend your 2021 to 2022 tax return up to 31 January 2024, 2022 to 2023 (31 January 2025).  For 2019 to 2020 & 2020 to 2021, you will need to submit an overpayment relief claims following the instructions at:

SACM12150 - Overpayment relief: Form of claims

Thank you.

Bigjock, I think you have asked a similar question elsewhere on here. HMRC has also misconstrued your question and the different Articles of the UK/Germany treaty. The DRV pension is Germany's social security or state pension and is taxable ONLY in Germany by virtue of Article 17(2) since 2010 treaty came into effect. Government Service pensions are covered by Article 18 of that treaty but that is irrelevant for your pension. Your tax office in Germany is Finanzamt Neubrandenburg. They are unlikely to seek you out until they are taking legal action for tax evasion, which is a criminal offence in Germany. As I understand it, since the aforementioned tax office became the specialist office for foreign pensioner taxation, they are actively pursuing non-compliance. You should contact them as a matter of urgency. Contact details are on their website ( www finanzamt-rente-im-ausland.de). All the advice I have seen on issues Germany and tax indicate early and voluntary disclosure is paramount.

Many thanks HMRC Admin 32 just to be absolutely clear - both French and German pensions are basic social security entitlements and neither is classified as a "Government" pension per se (i.e. for Government service). 1 French pension – “retraite de base du regime general” Since the pension is a basic social security pension can I take it that Article 23 (other income) will apply and tax is therefore liable in UK? 2 German social security pension - DRV Altersrente. I note what you say above about the German state (social security) pension above - being “now only taxable in Germany from 1 August 2017 under Article 17 of the UK / German double taxation agreement”. What was the situation prior to August 2017? Was tax previously payable in UK ? What exactly is the significance of 1 August 2017 with respect to the taxation of (German) pensions? 3 FYI I have been declaring – and paying UK tax on - my German pension via UK self assessment as foreign income since 2013 following advice received at that time. I note your advice above on how to re-claim tax for 21&22 and 19&20 and request further guidance on how to claim back UK tax paid via Self Assessment prior to this time (i.e. to 2013) Many thanks in anticipation.

Hi Bigjock,
Based on the double taxation treaty in place for Germany, prior to 2017 you would declare all of your income in the UK and if any tax had been paid abroad, you could claim Foreign Tax Credit relief.
Following a change with the German government, hence the 01/08/17 date, they gave new lesgislation that their equivelant of State Pension was only to be declared and taxed in Germany.
Therefore from this date, you do/did not need to declare this income.
Payments made prior to this date are not affected and there is no change  so you cannot change those figures.
For France, your payment is a pension and comes under Article 18 and as a resident of the UK, you are liable in the UK on this income.
There has been no change to this treaty since 2008 so again any income you have received is taxable here.
Thank you. 

 

Hello, I am a German national by birth and a British Citizen by naturalisation. I receive the following German pensions: 1. “Ruhegehalt” as a retired cicil servant (“Ruhestandsbeamter”), 2. “DRV (Deutsche Rentenversicherung) Altersrente” 3. “VBL (Versorgungsanstalt des Bundes und der Länder) betriebliche Altersversorgung”. Up to now these pensions have been taxed solely in Germany. Only recently I was made aware that all these pensions might have to be taxed in the UK according to Article 18 (2) b) of the DTA between Germany and the UK: “However, such pensions and other similar remuneration shall be taxable only in the other Contracting State if the individual is a resident of, and a national of, that State.” Questions: a) Do I still have to pay UK Tax for these pensions considering that German tax has already been paid (avoiding double taxation)? b) If the answer to a) is yes: for how long back might I have to pay?

Hi,
Please refer to https:
DT7903
Thankyou.

The DRV pension is the German social security pension and, according to Art 17(2) is taxable only in Germany - see note 4 in DT7904. The Ruhegehalt is, I think, a Government Service pension as it is a Civil Service pension and would be taxable only in the UK as you have dual citizenship, so Art. 18(2)(b) would apply - I am not sure about the VBL but is sounds like a Government Service pension as it is presumably: "... paid by [Germany], a “Land”, a political subdivision or a local authority of a “Land” or [the German state] or some other legal entity under public law of [Germany]..." but you would need to check on that one. If it is not a Government Service pension and if you paid into it for more than 15 years then note 3 of DT7904 would need to be considered. The above may enable you to focus any further questions for HMRC.