Tax on UK Military Pension

[964ST]

I got a letter from the Finanzamt last year, declaring that they were aware that I was being paid a Military Pension monthly from 2005, they made it somewhat clear that I should sort the situation out! And back pay the undeclared Taxable income.

I thought that if I was paying Tax in the UK that it was a separate issue, OBVIOUSLY I WAS WRONG!!

Has any other German Ex-Pats got the same letter?

 

[slipperman]

I got a letter from the Finanzamt last year, declaring that they were aware that I was being paid a Military Pension monthly from 2005, they made it somewhat clear that I should sort the situation out! And back pay the undeclared Taxable income.

I thought that if I was paying Tax in the UK that it was a separate issue, OBVIOUSLY I WAS WRONG!!

Has any other German Ex-Pats got the same letter?

My understanding is that your Pension(s) are liable to be taxed if your annual income exceeds the tax threshold - currently set at around £11.5k pa.
Do you have other sources of income, for example, a job salary?

 

[Sam The Bam]

I got a letter from the Finanzamt last year, declaring that they were aware that I was being paid a Military Pension monthly from 2005, they made it somewhat clear that I should sort the situation out! And back pay the undeclared Taxable income.

I thought that if I was paying Tax in the UK that it was a separate issue, OBVIOUSLY I WAS WRONG!!

Has any other German Ex-Pats got the same letter?

I'm not a Germany ex-pat but I feel your pain. Germany has a double or dual taxation agreement with the UK which usually means both want paid. I pay tax to both the British Inland Revenue and the U.S. IRS.

Do a search for the list of countries that have a dual taxation agreement with the UK.

 

[Ned_Seagoon]

Probably won’t help the OP, but the FR-UK double taxation agreement means that the FR authorities accept that our MoD pension is taxed at source in the UK and they exclude it from all consideration here.

 

[Effendi]

It depends on your income from other sources and the rates of tax in the particular countries.

My own understanding is:

Forgetting any other possible income for this example. If the UK tax rate is 25% and they take that 25% before they give you the pension, and if the German tax rate is 30% then the Germans should only take 5%.

Next one: The Brits take their 25%, but you are earning an amount of money in Germany that is just below a higher tax threshold and receiving the pension puts your personal income up to a higher taxable threshold then you have to pay the applicable higher rate of tax.

My own problem at the moment is that in a few years we will be receiving pensions that have some tax free benefit in the UK. Nah, not in the USA, they want to tax the pensions as income............I think I have found a way around it, sort of.

 

[exbleep]

The dual tax agreement means that you can't be taxed on the same income twice. Regardless of what the tax rate is. Government pensions are taxed at source in UK so can't be taxed in another EU country.

What can happen is that they add the non taxable income to other income and come up with the tax rate.
For example, if you get 15k mil pension you will only pay tax on that in UK.
If you get a state pension, what we once called the OAP, and it's worth say £7500 a year, they will add both together 15 and 7.5 is 22.5k. You will get taxed on the OAP part but at the tax level that 22.5k comes under once the tax free allowance is deducted.

No idea what the tax bands are in Germany but they are quite low here in Spain. I get mil pension, NHS pension and OAP. My mil pension goes down under non taxable income but they add all three together and any tax owed is on the tax bracket it comes under, that is 24% instead of 19% in my case but only on the income over the mil pension and after the Spanish allowance is taken off. All in all, 32k in euro (ish). take off my 17k mil pension leaves 15k to be taxed, remove the Spanish tax allowance of 6500 and I get taxed at 24% on 8.5k instead of the basic 19% because the 32k comes into the next tax bracket. (Hope I haven't done an oozlum bird there).

I then get a 2k low paid allowance as my taxable income is below 18k.

They do not actually tax the government pension (mil, police, civil service etc) but take it into account when assessing your tax band.

If they are charging you tax on your mil pension then you need to get someone in Germany who knows how to complete the tax return properly.

 

[Drlligaf]

I got a letter from the Finanzamt last year, declaring that they were aware that I was being paid a Military Pension monthly from 2005, they made it somewhat clear that I should sort the situation out! And back pay the undeclared Taxable income.

I thought that if I was paying Tax in the UK that it was a separate issue, OBVIOUSLY I WAS WRONG!!

Has any other German Ex-Pats got the same letter?

No, but I do have a letter from Inland Revenue stating that tax liability is exclusively in Britain. Because of a tax treaty this means Britain gets everything, nobody else gets a look in at all. However having said that your best bet is to go to a Lohnsteuerhilfeverein (cheaper than a tax consultant and just as good) for qualified advice, my feeling is that the German taxman is trying it on. One question remains, just how did the Finanzamt find out about your military pension?

 

[harrythebastard]

Ditto in France, although being fully resident here I am classed as a UK tax resident and pay all taxes there.
I only pay some social charges for health cover here, nothing else is taxed as the UK taxes it all at source.
It will change slightly when I get to OAP state pension age, that bit will be taxed in France only.

 

[964ST]

I immeadiately contracted a tax specialist here in Germany, the situation has been concluded, BUT obviously I had to pay!! The back tax (not for the entire period, I sense if you are up front with the Finanzamt they will tolerate a certain amount of ”I had know idea about that-ness”.

I am earning in Germanland and they have calculated it as extra earnings “from outside of Germany”,.

They found out about my UK Mil Pension because it is payed into a R(obbing) B(arstewerd) S(cum) bank account and because there are so many international criminals and terrorsists laundring money that there is an international agreement between the Organisations, and I had a German telephone number as a point of contact. I was sent an official notification from MY!! Bank to explain why and they asked in no uncertain terms if I was paying Tax in Germanland, and if I was what is the Reference

 

[964ST]

My understanding is that your Pension(s) are liable to be taxed if your annual income exceeds the tax threshold - currently set at around £11.5k pa.
Do you have other sources of income, for example, a job salary?

Yes, I have been employed in Germanland since vacating sanity.

 

[DB216LOKDVR]

I immeadiately contracted a tax specialist here in Germany, the situation has been concluded, BUT obviously I had to pay!! The back tax (not for the entire period, I sense if you are up front with the Finanzamt they will tolerate a certain amount of ”I had know idea about that-ness”.

I am earning in Germanland and they have calculated it as extra earnings “from outside of Germany”,.

They found out about my UK Mil Pension because it is payed into a R(obbing) B(arstewerd) S(cum) bank account and because there are so many international criminals and terrorsists laundring money that there is an international agreement between the Organisations, and I had a German telephone number as a point of contact. I was sent an official notification from MY!! Bank to explain why and they asked in no uncertain terms if I was paying Tax in Germanland, and if I was what is the Reference

Change UK bank ASAP.

TSB did something similar to me in the late 1970's and contacted HMRC because I was transferring some monies over from Germany each month. LOA paid in to German Current Account, main wages paid into UK TSB savings account direct from MoD. Spare monies at the end of each month from Germany Current Account into UK TSB Current Account.

Loads of forms to fill in and a interview in JHQ with a UK Taxman. The other interviewees being spoken to by the taxman at the same time were very well off Officer's who owned half the UK, had a stable full of race horses, Rolls Royces and related to the Royals etc etc.

I was a lowly A3 L/CPL who did not spend a lot of money at the time. 3 good meals a day and lots of own PT.

We were all sat in a line in the JHQ 34 AEC Education Centre (naughty boys) and being called in to different room's one at a time. The LT/COL sat next to me was sweating a bit and when he asked me why I was there, he could not believe it. Asked me to teach his wife some financial restraint.

UK Taxman was understanding filled in a normal tax return, bin all the other forms etc. Situation resolved.

Some Paymaster (passed over RAPC Major) at Fife Barracks became aware and ordered that I fill out another tax return so he could examine it. I refused and was on OC orders for a interview without coffee the following Friday. OC happy with my explanation that my tax returns were between HMRC and myself only.

Spoke to German Sparky Bank Manager and opened a German Savings Account. Closed down TSB account and only paid a little money direct into TSB Current Account monthly from MOD. TSB Manager when I was next on leave asked me why. Not happy with my response.

Who says it good to save.

 

[exbluejob]

Lot of UK banks are closing accounts for you foreigners post Brexit

Is your bank account being closed after Brexit? Here's what you can do

The news of bank account and credit card closures in the likes of France and Spain is a blow for expats who want to receive their pension in pounds, or who simply want to keep ties to their home country.

www.thisismoney.co.uk

 

[SONAR-BENDER]

Probably won’t help the OP, but the FR-UK double taxation agreement means that the FR authorities accept that our MoD pension is taxed at source in the UK and they exclude it from all consideration here.

As do Spain. Not only MOD Pensions, but ANY other Government pension - except the OAP!

 

[stacker1]

Lot of UK banks are closing accounts for you foreigners post Brexit

Is your bank account being closed after Brexit? Here's what you can do

The news of bank account and credit card closures in the likes of France and Spain is a blow for expats who want to receive their pension in pounds, or who simply want to keep ties to their home country.

www.thisismoney.co.uk

This one of those outrage type stories that remainers in Europe like to point out is so unfair.
I have a a British bank account for my military pension, if I want that cash abroad I'll either do a large transfer or use a debit card via Transferwise. Its much cheaper than normal bank transfer rates.

 

[LeoRoverman]

One question remains, just how did the Finanzamt find out about your military pension?

Don't you have to declare it as part of your income declaration to the FZA

 

[exbleep]

Lot of UK banks are closing accounts for you foreigners post Brexit

Is your bank account being closed after Brexit? Here's what you can do

The news of bank account and credit card closures in the likes of France and Spain is a blow for expats who want to receive their pension in pounds, or who simply want to keep ties to their home country.

www.thisismoney.co.uk

No they aren't. I

 

[exbluejob]

No they aren't. I

Oh, is the article wrong?

 

[964ST]

Don't you have to declare it as part of your income declaration to the FZA

I can state from experience (in retrospect) that
YES! You must declare your UK paid Military Pension on your German Tax Return when you submit it to the Finanzamt (it has some sort of weird name like ”Progression Vorbehalt” or something like that).

 

[exbleep]

Oh, is the article wrong?

Barclaycard has told customers that they can't have a credit card unless they have a UK address.
Lloyds is closing accounts in several countries but not others.
Coutts (which we all use, of course) is closing non UK accounts.#
Barclaycard T&Cs have always stated you need a UK address. I know of some here who have had letters stating their credit card will by cancelled by Barclays but their current account will remain open provided it is used every so often.

That hardly means "lots" of banks are closing for expats as you stated.

 

[cantbearsed2]

My Army pention is payed into the local Sparkasse since 2009 when I finished my service Here in Germany.
I then immediately started working for NAAFI which was a tax free income. Since last year I am unemployed but doing a 2 year training package in Germany.
So far I have paid zero tax in Germany but on my bank statements it just states that it’s law to declare any income over 12000 euros a year to the tax man.
what I am aware of is as soon as I do start a regular job the tax man will add my pention together with my income and adjust the tax code accordingly.
i am also aware that you are not obliged to fill in a tax return unless you are. Self employed but as soon as you fill one in on e you must carry on filling them out every year.