Gary C

Have a look at the double taxation treaty, which says that the Canadian state (social security) pension will be taxed only in the UK. It is likely you will be required to submit a Self Assessment tax return and foreign pages. 

Thank you but can you explain the rationale behind this, given that HMRC has responsibility for National Insurance and the requirements that need to be met to pay voluntarily at Class 3 as well as Class 2? What is it that differentiates between being "not close to" and being "close to or over", pension age? Is there a particular expertise in DWP, or do they still liaise with you on the National Insurance legislation? It just seems an unnecessary and potentially confusing syb-process.

Can you please confirm the position of a person who lives or lived abroad and who wants to fill gaps in their NI record but is within 6 months of reaching UK pension age, or has already claimed their UK state pension? Do they still send CF83 to HMRC to establish the years they can pay and the Class of NI they should pay, after which they speak to DWP Future Pension Centre or the Pension Service, to establish which years will improve their pension, or is the process different, as someone suggested to me recently? That person suggested they had been told by HMRC that they should not submit a CF83 but should simply contact the Pension Service.

Susan T, I am surprised to hear what you say about the German tax authority saying a tax assessment is not acceptable. I assume you are UK resident and need the form to substantiate a claim to be treated for German assessment purposes as subject to unlimited liability taxation? If so, the RIA tax office website states clearly that a tax assessment, i.e. the tax calculation part of your SA return should suffice. It was certainly that way until 2022 and the website is unchanged. If you are not claiming the above then you shouldn't need the form at all as your UK income is irrelevant but if you are tax resident in Germany then you local tax office may have different procedures...

As a slight aside, have you elected to have the RiA assess you absent a tax return each year (Amtsveranlagung)? And have you set up a SEPA Direct Debit mandate with them to enable them to take any tax due on the, up to 5 dates a year? Both are worth considering in my opinion as the recipient of a German pension...

I am in a similar position, though I have a couple more months to get things sorted. Normally my record is updated in early summer to show the position to the previous April but this year, of all years, that is not yet the case! HMRC Admin 20, your reply to Pesi is not overly helpful. I have a PTA and have today checked my record and ability to pay voluntary years. Given that my 2023/24 record has not been updated yet - it will show not full when it is, as I retired from work several years ago and have paid only voluntary NI since then - I could only pay years up to and including 2022/23 which I have done today. So, the question is, when will our 2023/24 records show as updated on our record/PTA, so that we can (hopefully) then use the online functionality to also pay 2023/24. In my case I know I need to pay that year to achieve my maximum pension and have already had the required discussion with DWP.

Hi suttmap Suttmann 4.3% German tax sounds wrong to me as non-residents do not qualify for the personal (or any other) allowance unless they can elect to be treated as resident for assessment purposes (a tax fiction) if, either, 90% of their worldwide income is from their German pension, OR, the income that is not taxable in Germany is less than the German Grundfreibetrag. See Section 1(3) EStG (German Income Tax Act) If an election is not possible, then I would expect the tax rate to be upwards of 14%, whereas if an election has been made the 4%+ could be OK.

HMRC Admin 20 Response If Monica's mother's pension started before the new treaty came into effect, then it would have been taxable only in the UK until the new treaty came into force. Her question was, given that her mother had continued to report the pension to the UK after that date, can, or should, an Article 35(2) election be allowed/inferred to continue to old tax treatment. After all, it seems that until this issue was raised, neither fisc was certain how it should be taxed.

Monica Lewis I don't work for HMRC but I do receive a German state pension and have looked in detail at the tax issues. It seems highly likely that your mother’s German pension is the social security “gesetzliche Altersrente”, or what we would call the state pension, administered by Deutsche Rentenversicherung (DRV). While she was working, subscriptions would have been paid monthly as a percentage of her wages but this would not make it an occupational pension or Betriebsrente. The pension is presumably paid to her by Deutsche Post Renten Service. You should of course check with the pension authority or payer but it seems highly unlikely that it would be a Betriebsrente without there also being a “gesetzliche Altersrente”. As you say, the amount of her pension is reported each year to the German tax office, but not, I think to the UK. Your mother will have started receiving her pension under the 1964 double tax treaty between the two countries. That was replaced by the current one in 2011 (you may recognise that year from your question). Under Article X of the 1964 treaty, a pension received from Germany was taxable only in the UK, so the treatment you describe would be in accordance with the old treaty – indeed all non-Government Service pensions were treated the same under the 1964 treaty. When the new treaty came into force the tax treatment of state pensions changed to them being taxable only in the paying country, so Germany, but Article 32(5) provided that if a person was already in receipt of pension payments covered by Article X of the 1964 treaty, they could elect for the old rules to continue to apply. Given that HMRC has been refunding tax annually, it seems they consider the pension to be a state pension, taxable now only in Germany under Article 17(2) of the new treaty, and consider that no Article 32(5) election has been made to continue the pre-2011 treatment. If correct, this means that the pension should have been taxed in Germany for the past 13 years and that there is no requirement to return it to HMRC as foreign income. If a UK tax return is otherwise required, a note to this effect should be added in the other information space as instructed in the Foreign Income guidance notes. If the above turns out to accurately describe your mother's situation, I wonder what HMRC's position will be on how to resolve matters...

Pear to Pear .

I think it would be helpful to also speak with DWP International Pension Centre as they can advise you on how your contribution record in EU countries can help you get past the 10 NI years requirement for a UK pension. As long as you have at least 2 years in an EU country, then the EU rules on the coordination of social security systems should mean you get a UK pension based on those 8 years. Paying voluntary UK NI to further increase the UK state pension and to work beneficially in your other country(ies) would still, in my view, be worth pursuing.