UK pensions in Germany: what must you report for 2025?
UK pensions while living in Germany? Tax depends on pension type, with German reporting and progression rules to check for the 2025 income tax return.
A German resident must distinguish UK State, government-service and private pensions: treaty exemption does not necessarily remove German reporting obligations or the effect on the German tax rate. The result depends on the pension category and individual circumstances.
This article concerns the 2025 German income tax year; the pension profile is illustrative and contains no client figures.
Start by classifying each pension
Consider a German resident who receives German retirement income alongside one or more UK pensions. The first question is not whether UK tax has already been deducted, but which treaty provision applies to each payment.
Under the UK–Germany convention, Article 17 covers pensions and similar payments, while Article 18 contains the government-service rules. Different pensions received by the same person can therefore have different tax outcomes.
Keep a separate record for every pension: provider, type of scheme, payment history, contribution history, gross payments and tax withheld. An unidentified insurance payment should not automatically be classified as a pension.
UK State and government-service pensions
The UK State Pension falls under the social-security rule in Article 17(2), which allocates taxation to the UK.
A qualifying UK government-service pension, including an armed-forces pension, follows Article 18(2). It normally remains taxable only in the UK for a German resident who is not a German national. Where the recipient is both resident in Germany and a German national, the nationality exception must be considered.
These are separate treaty categories. A State Pension is not a government-service pension merely because a public authority pays it.
German exemption and any applicable conditions must still be established. Keep evidence of the UK tax treatment rather than assuming that a payer's deductions settle the German position.
Why German exemption can still increase your tax
Germany can take treaty-exempt pension income into account when calculating the tax rate on income that remains taxable in Germany. This is the Progressionsvorbehalt, governed by section 32b EStG.
The calculation separates two amounts:
Income taxable in Germany, after the applicable German deductions.
Treaty-exempt income relevant to the progression calculation, measured under German rules.
A special rate is calculated using the relevant combined income and applied to the German taxable income. The exempt pension is not itself added to the German taxable base.
Consequently, a low German taxable income does not, by itself, establish that no German tax is payable. Exempt foreign income may raise the applicable rate. Equally, gross foreign pension receipts alone cannot establish the additional tax bill.
Private pensions: check the exceptions before claiming relief
Under Article 17(1), private pension taxation generally follows residence. However, Article 17(3) can preserve UK taxation where UK tax-relieved contributions were made for more than 15 years, subject to the treaty's conditions and exceptions.
The contribution record is therefore essential. A pension's small annual amount does not prove that it qualifies for UK exemption.
HMRC's Germany notes also describe an election for qualifying pensions already in payment before 30 December 2010, using Article 10 of the previous 1964 convention, provided the pension is subject to German tax. That election does not cover UK public-fund pensions.
Do not assume that every private pension is taxed in Germany only on an income portion. Its German treatment depends on the scheme and the applicable domestic classification.
Establish the taxable amounts before estimating the bill
A useful calculation requires more than adding monthly pension payments together. Relevant factors include:
The type of each German and UK pension.
Pension commencement dates and the applicable German treatment.
Any relevant allowances, exempt pension amounts and deductions.
Health and care insurance contributions and their deductibility.
The annual amounts and currency conversion used in the return.
Do not apply one statutory-pension percentage to every pension, particularly when occupational or private schemes are also involved. Nor should a percentage associated with the pension's starting year automatically be applied to all later gross payments without checking the German rules.
These distinctions affect both directly taxable pensions and the exempt income used for progression. They are why a personalised estimate cannot safely be reproduced as a general expected tax bill.
Reporting and correcting earlier omissions
A pension may need to appear in the German return even when the treaty exempts it from direct German taxation. Foreign-pension and foreign-income schedules, including Anlage R-AUS and Anlage AUS where applicable, should reflect the classification of each payment.
Information supplied to a health insurer does not replace a tax declaration.
If earlier returns omitted foreign pensions, obtain a review of the affected years and the appropriate correction procedure. The relevant periods and procedural consequences depend on the filing history and circumstances. A current treaty analysis should not simply be projected backwards over decades.
A reminder from the Finanzamt should be addressed by its stated deadline. An individual reminder date is not a general deadline for all pensioners, and additional time should not be assumed without checking the position.
Claiming UK relief where it is available
For a qualifying pension, DT-Individual (Germany) can be used to request relief from future UK withholding and repayment of UK tax already deducted. German residence certification is part of the process.
Identify the eligible pension before making the claim. Relief available for one private pension does not automatically extend to the State Pension or a government-service pension.
HMRC states that non-resident repayment claims generally have a four-year limit after the end of the relevant UK tax year. Check each tax year separately rather than treating four calendar years of payments as one claim.
Frequently asked questions
If the UK has taxed my pension, can I leave it off my German return?
No automatic exemption from reporting follows from UK taxation. A treaty-exempt pension can still be relevant to the German progression calculation.
Are the UK State Pension and a public-service pension treated identically?
They arise under different treaty provisions. In particular, the government-service rule includes a nationality exception that must be considered separately.
Does a small private pension automatically belong only in Germany?
No. Contribution history, the more-than-15-year rule and any available transitional election must be examined before claiming UK relief.
Can progression create German tax when my German income is low?
Yes, depending on the taxable base and the exempt income included in the rate calculation. The gross amount of the pensions is not enough to quantify the result.
Does reporting pensions to my health insurer correct past tax returns?
No. Insurance reporting and income tax reporting are separate obligations, and earlier omissions require their own review.
Sources
HMRC, DT-Individual Germany notes: Articles 17 and 18 and election under the 1964 convention
HMRC manual INTM331028, time limit for non-resident repayment claims
This article explains a general framework, not personalised tax advice. Rules change yearly, and the treatment depends on the exact situation.
Need tax advice tailored to your situation?
Have a similar situation? BeFiscal has already handled files like this one. To get a written tax analysis tailored to your own figures and situation, click the ‘Ask your question’ chat button on the right of this page: our assistant takes over, gathers the information needed and guides you through to your personalised written analysis.