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TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15975
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I am a UK citizen married to a German citizen. I worked part

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I am a UK citizen married to a German citizen. I worked part time in (East) Germany for 19 years and now receive a small professional pension as well as a small German state pension (total is just over 800 euro per month). This is paid to me in Germany, where I live with my husband, in his house, some of the time. I have my own house in the UK, where I live for the rest of the time. In the UK I receive a pension from my time as a teacher, and - until May last year - a very small UK pension (about 100 pounds a month).
I had always paid tax in Germany on what I received in Germany and in the UK on what I received in the UK, but when, following my husband's retirement, we moved from East to West Germany, I received a letter - in Germany - from UK pensions telling me that they had received notification that I was now resident in Germany and that my UK pension should be paid there. Now my UK state pension is paid to me in Germany.
I'm now trying to do my UK tax but the German address was automatically entered. I am now totally confused - must I declare myself just resident in either Germany or the UK? To do either would not be correct and cause all sorts of problems - eg I couldnot have a bank account in Germany unless I have residency status, and I think the same applies in the UK. I really do not know what to do or where to get advice. Can you help?
Hi. Let me take a look at this and I'll get back to you.
Customer: replied 2 years ago.
Thanks - let me know if you need any further information - and I'd be happy (happier) to chat if that owuld be ok - once you have an idea about the issues involved
Customer: replied 2 years ago.
I have just seen that to speak on the phone I'd have to pay an additional 38 pounds - I'd rather not to that at this stage - thanks
You can be dual resident in more than one country, particularly where the tax years don't coincide. If you are dual resident, then you refer to Article 4 of the UK/Germany tax treaty here which is effectively a tiebreaker. If none of the tests break the tie, then you can ask the tax authorities in each country to consult with one another and to determine your tax residence. I would say that you are predominantly a tax resident of Germany from reading Article 4. Take a look at the links below for information on UK tax residency. Normally, pension income is taxed in the country of tax residence. However, what are called government service pensions which can include teaching pensions are normally taxed in the country they came from. Take a look here for information on government service pensions. Article 17 of the treaty deals with pensions and Article 18 deals with government service pensions. Article 17 mentions that a social insurance pension (the UK state pension for example) should only be taxed in the country from which it is paid which is highly unusual. You need to determine your residence status and if that is dual residency, then you need to ask the German and UK tax authorities to determine it for you. If you are German tax resident by dint of Article 4, then you only disclose the UK State Pension and possibly the teaching pension in the UK tax return. You would also need to complete the residence/remittance pages SA109 to tell HMRC that you are non-UK resident if that is what you think you are having looked at the statutory residence tests linked to above. I hope this helps but let me know if you have any further questions.
Customer: replied 2 years ago.
Thanks - as you suggested I have looked at article 4 and - in that the house where I live in Kent is my house (sole ownership) and that I have lived here for almost 40 years - that the house in Germany is the sole ownership of my husband (and there is a prenuptial agreement to say that I have no right of residency in any of the properties he owns should anything happen to him) - that I have family (children and grandchildren here in the UK) - would seem to me to indicate I would be seen as a British resident especially re: "if he has an habitual abode in both Contracting States or in neither of them, he shall be deemed to be a resident only of the Contracting State of which he is a national". If that assumption is correct, does that mean I declare my teachers and state pension (plus some small interest I receive on savings) here in the UK and then declare my German pensions (I have no other income in Germany) to the German tax authorities? Also, if my assumption is correct, do I need to ask about dual residency? I should also add that my husband owns property in Switzerland, where we also stay - currently no more than a total of 8 weeks in the year though - in case that has any earing on the whole thing.
Forget the Swiss thing. It has no bearing.
If you are UK tax resident, you pay tax on your worldwide income with the proviso that the German state pension will be taxable only there as per the treaty and the German occupational pension will be taxable in the UK only unless it is a government service pension in which case it would be taxable only in Germany.
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