Gary C

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...

You should call DWP International Pension Centre and explain that you wish to claim your German state pension. They will send you a form CFN901 which asks for things like your German pension reference number. DWP will send that information, together with your UK NI record to the DRV Bund Berlin, who will then contact you directly for any additional information and/or to inform you of your pension award.

HMRC Admin 21, The state pension is taxed on the amount to which the person is entitled during the year, so to take account of the fact that the pension increases from the first benefit week that starts on, or after, the first Monday of the tax year, one cannot take the weekly amount x 52, or the 4-weekly amount x 13. It is generally 1 week at the old rate and 51 weeks at the new, unless of course it is a 53-week year.

Hi David, Example 1 is correct. In that case the DTA awards taxing rights only to the UK so exempts the income from being taxed in Austria. In such cases Article 21(1)(b) of the DTA says, "Where [...] income derived by a resident of Austria is exempt from tax [in Austria], Austria may nevertheless, in calculating the amount of tax on the remaining income of such resident, take into account the exempted income." What that means is that the tax rate applied to your other income will increase to the rate that would be applicable to a person who had the same amount of total income arising only in Austria. So, if you had 30,000€ taxable in Austria and 10,000€ exempted by the DTA and taxable only in the UK, your worldwide income would be 40,000€ and the rate of tax applied to your 30,000€ that is taxable in Austria would be the same as that applied to a person whose taxable income was 40,000€. This referred called Progressionsvorbehalt and the 10,000€ exempt income will go into a special box on, or an "Anlage" to the tax return. You'll need to ask the Austrian FA or your tax advisor how to do that. Example 2 is correct if you mean that you receive the income without UK tax because the DTA awards taxing rights only to Austria. In that case, the income is simply part of your worldwide income and will go on your Austrian tax return as foreign income and be subject to Austrian taxation. Progressionsvorbehalt is not relevant here because the sum is fully taxed in Austria. Does this help?

David, You may already know this but income that is not taxable in Austria because it is exempted under the DTA, must be included in your tax return as it feeds into the rate at which you pay tax on your income that is taxed in Austria. See Article 21 (1)(b).

If his savings income takes him above £11,310, or £12,570, would he not qualify for the Starting Rate for Savings on up to £5,000 of savings income above his personal allowance and thus not need to worry about cancelling MA?

Indeed - that is what we have been saying, albeit that JohnMunich's pension has been paid into for less than 15 as I understand him, so 17(3) is simply not in point and the pension would be taxable only in Germany. Can I resurrect my question from a few days ago? If Article 17(3) would apply because a person has paid into a pension for more than 15 years, etc etc my understanding is that Germany would still consider the 17(3) test to be failed, and therefore retain its taxing right, if the person has taken a 25% tax-free (from the UK's perspective) lump sum. This is because the UK exempts that 25% from tax, meaning the pension as a whole is not "effectively taxed", i.e. not subject to tax. Since asking that question a tax adviser in Germany has suggested that Germany's view may differ depending on the nature of the pension arrangement, e.g. a lump sum from, say, a DB pension may mean the test is failed (or the overriding "effectively taxed" clause in Article 23(1) for a government service pension lump sum) because the pension is viewed as a single thing, whereas a lump sum taken from a SIPP would be tested independently from the remaining 75%. It would be interesting know how HMRC views the "effectively taxed" clause in Article 17(3) (and in Article 23(1)) when a tax-free lump sum has been taken from a pension. Does HMRC consider the pension as a whole is/is not effectively taxed, despite exempting 25% from tax, or does HMRC consider the 25% and the remaining 75% are tested separately, so the 25% would fail the test but the 75% would pass it?

But would it not be the case that the Executor would then provide the beneficiary of the interest with a form R185 to indicate that tax had been suffered on that element of their inheritance and that the tax suffered can be deducted from any tax due for that year, or reaid accordingly?