Gary C

Admin 10 and 25, Thanks. I know that government pensions are normally taxable only in the paying country as that is stipulated in Article 18 (2)(a). However, where the recipient has (in this case) Spanish nationality and is resident in Spain then Article 18(2)(b) is clear that the pension shall be taxable only in the country of residence. The fact that the person may be required to submit a form to ensure the UK does not tax the pension contrary to the wording of the DTA is surely secondary to the question asked.

My understanding is that it reverts to the country of residence and that single/dual nationality is not relevant; only that you have Spanish nationality and receive a UK Government Service pension while resident in Spain. The treaty refers to "a national of", not something else to deal with the concept of "a national of, as well as a national of somewhere else". My reasoning is that the 1964 UK/German treaty was worded slightly differently from the current one, which is worded the same in this regard as the UK/Spain treaty. In that old treaty the Government Service Pension citizenship override says, that the receipt of a UK government service pension when resident in Germany shall be exempt from German tax "unless the payment is made to a German national who is not also a national of the UK". If the current treaties intended to continue that outcome, then the wording would sure not have been changed to omit the reference to dual nationality... My understanding is that UK/German dual nationality citizens in receipt of UK Government Service pensions in Germany are being taxed on that income in Germany.

HMRC Admin 10, Can I question that please? Amitia is a Spanish citizen. Surely Article 18(2)(b) means that taxing rights revert to Spain "2. b) 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."

The letter is not particularly helpful as it says only that the new weekly amount is £X. That still leaves everyone scratching their heads over how to calculate the annual amount to which they are entitled, as opposed to how much goes into the bank, given that their April payment will always include 1, 2 or 3 weeks at the old rate and the remainder at the new rate. It would be so easy for DWP to amend its systems to include on that letter what the person's annual entitlement will be given that they know from which payment the new rate will apply.

HMRC Admin 28, I think you meant to say that the UK state pension must be reported based on the full amount to which the person is entitled, not the amount they actually received in the tax year.

I am in a similar position. The Double Taxation Agreement between the UK and Germany awards taxing rights over state pensions (social security pensions) to the paying country, i.e. Germany in this case. Your tax office in Germany is Finanzamt Neubrandenburg Rente im Ausland (RiA) [link removed by admin] (if HMRC will allow the link, or at least leave the basics of the web address) and you should contact them to inform them of your chargeability. You will need to correspond with RiA in German, even though some of their website and forms are in English as well as German! The Deutsche Rentenversicherung (DRV) will inform RiA each year of the amount of your pension and it is taxable in its entirety because, as aresident you are not entitled to the German personal allowance, unless at least 90% of your income is taxable in Germany (unlikely), or your income that is not taxable in Germany is less than the German personal allowance (currently about 10,000€). In such cases you can elect to be treated as if you were resident for the purposes "only" of taxing your German pension (a tax fiction for want of a better phrase). This would result in no tax being payable on your small pension if you can make that election. The tax system in Germany is different to that in the UK. A major difference is that it is not a self assessment regime and you are required to file a tax return each year without being prompted. However, for RiA cases you can elect for the tax office to assess your tax liability in the absence of a tax return (they get all they need from the DRV). You can also set-up a direct debit for paying that tax to make sure you do not miss the payment deadline and get penalised as a result. In the UK you are not required to include the German pension on your UK tax return (if you submit one) but are requested in foreign note FN8 to put some text in the information box on your return, along the lines of: "I receive a German state social security pension from Deutsche Rentenversicherung Bund, paid via the German Post's Renten Service, which shall be taxable only in Germany under Article 17(2) of the UK/Germany Double Taxation Agreement. The pension has been in payment since XX 20XX. This statement is made in accordance with SA106 foreign notes, which explain on page FN8 that if you have a pension that is not taxable in the UK because of a DTA, give full details of the pension's payer, pension and relevant DTA in the Any other information box on your tax return." I assume HMRC may need to you make a statement of this nature once if you do not have to self assess, just so that your record has been noted but as I submit a return I am not sure about that. Hope this helps

I am not sure of the process for claiming a pension from Switzerland but from what the Swiss say, it appears similar to that for claiming a pension from an EU country, i.e. you claim through the UK International Pensions Team on 0191 21 87777. For EU pensions they will send you a form CFN901 and looking at that form it suggests the same process applies for Switzerland, i.e. that country is also subject to the EU regulations on the Coordination of Social Security System and the same form needs to be completed. It is not possible to download that form (yet), so, a call to the number above will hopefully get the process started for you.