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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
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Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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My wife is a resident in the UK and receives a foreign company

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My wife is a resident in the UK and receives a foreign company pension from her former employer in Germany.
Her former employer was the chemical and pharma company “Hoechst AG” and the pension is paid out by their rather large pension fund.
Since my wife does not have a residence in Germany, her monthly pension payments are not being taxed in Germany, i.e. the payments are exempt of any German tax.
Does my wife have to declare her foreign company pension to HMRC and is it taxable in the UK?
Submitted: 1 year ago.
Category: Tax
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your question... As your wife is UK resident for tax purposes, she is taxed on income arising worldwide.She would have to declare it by completing supplementary pages SA106 - Foreign.I would draw your attention to page FN 7 of SA106 Notes here (tells you how to complete the relevant boxes.You can download the supplementary pages SA106 and SA106 notes herehttps://www.gov.uk/government/publications/self-assessment-foreign-sa106 I hope this is helpful and answers your question. If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.
Customer: replied 1 year ago.
On page FN 7 of SA106 under "Exemption" HMRC writes that "foreign pensions are usually exempt in full or part from UK tax" and then gives a few examples of exempt foreign pensions. HMRC does not mention whether company pensions are exempt or not and also gives no criteria for the exemptions.It would be good to know whether foreign company pensions are usually exempt or not. Can you comment again?
Expert:  taxadvisor.uk replied 1 year ago.
Thank you for your reply. Under most Double Taxation Agreements, pensions (other than government pensions) are chargeable only in the country of residence. Government pensions are usually chargeable only in the country where they are being paid. As your wife is UK resident and the pension is from previous employer (non-government service) her pension would be chargeable to UK income tax. More information on this can be found in RDR1 here under Pensions 6.10 (bottom of page 36) and 10.28 (bottom of page 70)https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/464664/RDR1_FB15_updates_RB_and_CGT.pdf I hope this is helpful.
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4803
Experience: FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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Customer: replied 1 year ago.
Thank you. This really answers my question. I was just not sure whether I had overlooked something and would not found your references in RDR1. Thanks a lot!
Expert:  taxadvisor.uk replied 1 year ago.
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