Gary C

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?

I am struggling to see the problem. The SRS sets a tax rate of 0% on up to £5,000 of savings income above your personal allowance, so if you have transferred £1,260 of you personal allowance then you have £11,310 left. If your non-savings income is less than, or equal to, £11,310, then you can receive £5,000 of savings income without paying any tax on it, plus, of course, your personal savings allowance of £1,000. The recipient of the transfer does not get an increased personal allowance but gets a tax reduction of £252 against their overall tax burden (£1,260 @ 20%). Their personal allowance remains at £12,570 and the SRS still provides 0% tax on up to £5,000 of savings income, plus of course their PSA of £1,000 too. If their total income exceeds these amounts, such that tax would be payable, then the £252 is deducted from that final tax liability. The maths works out just fine.

Alan Wilkinson, Surely, if you have dual citizenship, your Army pension is taxable only in Germany, so unless you have other income arising in the UK that is not taxable in Germany, why are you required to obtain the certificate?

JohnMunich, My understanding is that if you have made contributions for less than 15 years, Article 17(3) does not come into play to override Article 17(1). This means the full amount of your pension will be taxable only in Germany - both the 25% lump sum and the regular pension from the remaining 75%. Germany does not recognise the concept of a tax-free pension lump sum, so you simply receive a large taxable amount in one year (the lump sum) and small regular payments falling into the tax years in which they are paid...