Gary C

You're welcome. All sounds like good news, and thanks for sharing the bit about RIA's acceptance of the UK tax year for non-residents. I'm afraid that the nachgelagerte Besteuerung applies in full to everyone and is why you get the tax-free element of your pension. We stopped paying into our pensions in the 1980s. There has been a case about domestic double taxation because of the 2005 change going through the constitutional court but it seems to be down to the taxpayer to demonstrate that they have suffered double taxation, despite the tax-free element. Quite how one could do that is unclear, even for those who only paid in under the old system. If memory serves, your assessment will make reference to the issue. Anyway, your tax-free amount is the relevant percentage of your first part-year's pension, then that percentage of the first full calendar year's pension with that amount then being fixed for life. The Amtsveranlagung is also available even if you have no net tax liability because you make the election. That is (or was when relevant to us) not that well explained on the RIA website but they were happy to provide that service.

AliGermany, 15 years and 3 months seems to me to be "more that 15 years", so it would seem that it falls under Article 17(3) and, subject to the other conditions in that Article being met, especially the "effectively taxed" conditions, then the UK would get the tax rather than Germany. Not sure why HMRC cannot say that, hmm... I too would love to hear how HMRC considers the tax-free (in the UK) lump sum should be treated for pensions falling under Article 17(3). My understanding of the DTA is that citizenship is relevant only to the treatment of Government Service pensions in Article 18(2)(b) but not in any shape or form to Article 17. If your UK pension IS taxable in Germany then my understanding is the same as yours that it would go on Anlage R-AUS. And in the case of a company pension, in row 23. However, if it IS NOT taxable in Germany, and thus feeds only into Progressionsvorbehalt to inform your rate of tax in Germany, then my understanding is that you use Anlage AUS, row 36+ in the section " Einkünfte i. S. d. § 32b EStG". If you were to enter it on Anlage R-AUS it would, I believe, be recognised as taxable, which would be incorrect. Your German tax adviser really should know this.

It does look as though you can make an election unless your interest and dividends are substantial! This is because your UK income can be up to 11,784€ in 2024 and you can still make an election. For you, it will be, I think, based on the "income not taxable in Germany is less than the Grundfreibetrag" option, not the "90% of income arising in Germany" option because your UK pension plus investment income looks as though it is probably more than 10% of your income. If your only German income is your pension, I would expect you to be dealt with by FA Neubrandenburg (Rente-im-Ausland) (RIA). They have a lot of info about limited/unlimited liability on their website in both English and German.
Don't forget that not all of your German pension is taxable in Germany because of the change to "nachgelagerte Besteuerung" of the pension back in 2005. (Again, see the RIA website). Depending on the year in which your pension started, and to avoid domestic double taxation, a % is tax-free. This is because, before 2005 your pension contributions were out of taxed income, whereas now, they are out of pre-tax income but the new rules tax the whole pension, subject to that tax-free %. For pensions starting in 2017, 26% of the first full calendar year's pension is tax free. This amount is fixed for life. That tax-free element reduces by 2% for pensions starting in years up to 2020 when it is 20%, and by 1% for pensions starting in 2021 and so on, so those starting in 2024 have a 16% tax-free part. You also get a Werbungskostenpauschal fuer Rentner of 102€. Yes, complicated! That is why I have opted for Amtsveranlagung!
Turning to the calculators, the amounts you use are annual amounts, as the Grundfreibetrag is an annual allowance, and the tax calculators work on annual taxable income. So, with the BMF calculator, add your annual taxable amount of German pension to the Grundfreibetrag and pop that in as your taxable income. In the Progressionsvorbehalt calculator you put your annual taxable amount of German in the Zu versteuerndes Einkommen box (do not add the Grundfrebegtrag this time), and your annual UK pension income plus your interest/dividends, less the Sparer-Pauschbetrag (1,000€ for 2023 onwards and 802€ for earlier years) in the other box.
On the results page you are interested in the line "Einkommensteuer" above the line "Weitere Informationen". If you have 12,000€ taxable amount of German pension (after the tax-free amount and the 102€ are deducted) and, say 2,000€ UK pension and interest etc above the 1,000€ allowance then for 2024 you get: * limited liability tax (no election) 2,699€ * unlimited liability tax (election) 332€ (note - the Progressionsvorbehalt calculator doesn't appear to have been updated yet since the Government recently increased the 2024 Grundfreibetrag by a further 180€, so it gives slightly too high figure - how annoying!) Seems worth making an election in those circumstances but as you say, you may want to take professional advice as this stuff is a tad complicated. Hope this helps.

You cannot get UK tax relief for German tax payable on your German pension as it is not taxable in the UK as HMRC has already said. You pay tax on it only in German, under German tax law. It does not feature at all in the calculation of your UK tax. When considering making an election, you look at your total taxable non-German income, not just your UK pension! The advantage of making an election for unlimited liability treatment is that your German tax will be lower because you have access to the Grundfreibetrag (and other allowances like Sonderausgaben). If your German pension is, say, 5,000€ and your income that is not taxable in Germany is 3,000€, then, absent an election you would pay tax in Germany on the full 5,000€.
If you use a tax calculator, like the one on the BMF website, you add that 5,000€ to the Grundfreibetrag and enter that amount as your taxable income. This is because the tax calculator assumes you would qualify for the Grundfreibetrag. This would give 938€ for 2024. If you make the election you use the Progressionsvorbehalt version of the calculator, like the one on the Bavarian FA website, and enter 5,000€ as taxable income and 3,000€ as income subject to progression. In this case, the total is less than 11,784€, so the tax is 0€.
If we use 10,000€ German income instead then without the election your tax would be 2,178€ and with the election it would be 163€. Keeping the same German income and 10,000€ UK income, the tax when making an election would become 879€, so you can see that as your UK income approaches the level of the Grundfreibetrag, the benefit of making an election diminishes. If you rely on your German-source income being at least 90% of your total income, you would need to enter your actual amounts to see how the numbers pan out.
Have a look at the German tax office calculators: * xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx You will have to remake the links, or search for them, as HMRC, understandably, does not allow links to be posted.

Margaret Marks, You can only elect for unlimited liability treatment in Germany if either 90% of your income arises in Germany, OR, your income that is not taxable in Germany, i.e. your worldwide income apart from that German income, is less that the German Personal Allowance (Grundfreibetrag) of, currently 11,784€, or about £9,800. If you can make an election then you are treated as though you are resident (a tax fiction) but remain taxable only on your German income. You get access to the Personal Allowance and other allowances, but are also subject to Progressionsvorbehalt and your UK/world income "eats up" the personal allowance before your German income, so the nearer your UK /world income is to the total of your allowances, the less beneficial the election. If you remain subject to limited liability treatment, then you just pay German tax on the taxable element of your German state pension and any other income arising in Germany that remains taxable there under the treaty.

CMH, Unless you are resident in Germany, or have elected to be treated as if resident for tax purposes, you will be subject only to limited liability tax treatment and progression is not applied. If you are subject to unlimited liability because you are resident in Germany then Germany reserves the right to set your tax rate by reference to your worldwide income, even if they do not tax some of it because it is exempted under the tax treaty. This is in Article 23 (1)(d) of the treaty. It is not taxing your income that is exempt from Germany tax.

Pentonia, Surely the NHS pension is also a Government Service pension, so taxable only in the UK unless they have Spanish citizenship, when Spain gets the tax, as would be the case with what you describe as their Government pension. The next question is, what income do they have that would warrant them still submitting UK tax returns - one for HMRC to opine on...

HMRC - surely, if the person has German citizenship then a government or LA pension reverts to being taxable only in Germany under Article 18(2)(b)? ALiGermany has German citizenship. The pension they mention is a company pension into which they have paid for more than 15 years. Article 17(3) would appear to apply making it taxable only in the UK as long as it is "effectively taxed", which I understand to mean "subject to tax". Given that a tax-free lump sum would be tax exempt and thus not "effectively taxed" my understanding from a German tax adviser is that Article 17(3) would be failed in Germany's view and taxation of the whole pension would revert to them. Is that how HMRC view Article 17(3)? AliGermany - the German tax people will not view a lump sum as being tax paid. They (and HMRC) will either view the payments as taxable only in the UK, or only in Germany. If they are taxable only in the UK, you will have to report the amounts on Anlage R-AUS with your German tax return, so that the amounts feed into the rate at which you pay tax on your income that is taxable in Germany (Progressionsvorbehalt). This is provided for in Article 23 (1)(d) of the treaty - "Germany, however, retains the right to take into account in the determination of its rate of tax the items of income and capital, which are under the provisions of this Convention exempted from German tax."

Anette, As mentioned to Nick, I managed to get a Starling € account and that works well. The e-money firms that I mentioned may provide SEPA D/D as they do give you an IBAN. My understanding is that HMRC accepts payments from them, though I don't know whether the NI Team allows D/Ds to be set up via them to pay voluntary NI. Perhaps HMRC can confirm. But if they do, I would see no reason why RiA would not allow you to set up a D/D with the likes of Wise or Revolut. Perhaps something to ask them, either by sending the form and a covering email, or just as a direct question?

NickG 1. Re the lump, I guess it comes back to the question of whether your wife paid into the scheme for more than 15 years and got tax relief on her contributions that has not been clawed back etc. (Article 17(3) of the treaty) but leave HMRC to pronounce on how the treaty applies to lump sums from schemes that are not the state pension, so under Article 17(1) or (3) but not Article 17(2). (I am assuming here that the job in Rundfunk does not constitute Government Service under Article 18...). Other than tax in one year and therefore the rate of tax, if taxed in Germany, would it make much difference whether she takes a lump sum or monthly pension? 2. I am in the same position as you and also closed my account with the same bank but managed to open a € account before they stopped offering them "temporarily". Other people use e-money firms like Wise or Revolut to undertake £/€ transactions but I have no experience of those firms. I understand you get an IBAN and then simply make an online payment but you would need to research that one...