becoming a UK non resident for tax matters

[colincostello]

I have been living in Berlin long enough to look at becomming a UK non resident for tax matters. I have checked out the info on the UK Gov. website and it looks really complicated. Has anyone gone down this path? Is it as bad as I fear? Should I get a professional to do it? Just for the first year.
Or just continue to do my online tax return as a resident? Simply because I know how to do it.
Thanks
Colin

[Sam-I-Am]

"I have been living in Berlin..." sounds like you should have already declared your tax residency status in Germany. If you're not here as a tourist then you have to along with visa/residency permit.

When I moved from the UK it was easy, I contacted HMRC before moving, filled in a form (1 or 2 pages I think) and then on all German documents stated my tax residency as here in Germany.

Generally you can only be tax resident in 1 country... so I'd recommend doing it straight away before the taxman knocks at your door

[GaryC]

Why do you consider that you are still tax resident in the UK and that, presumably, you are not tax resident in Germany. As a general matter of tax law, Germany has had the right to tax your worldwide income since you arrived and registered. The UK may also have the right to tax income arising in the UK but who gets the tax in that situation is governed by the double taxation agreement between the UK and Germany.

Have you been submitting German tax returns?

[colincostello]

I do not have German income so I have never done a German tax return

[Franklan]

I do not have German income so I have never done a German tax return

You are living in Germany and you are having income.

You have to pay taxes on that in Germany, not somewhere else.

[Alberto]

Germany has had the right to tax your worldwide income

I think this is wrong. Germany taxes the portion of your income that originates in Germany.
Oder...?

[Alberto]

I do not have German income so I have never done a German tax return

You are living in Germany and you are having income.

You have to pay taxes on that in Germany, not somewhere else.

Again, isn't the case that you pay income tax to Germany only for the German income?

I expect our fav tax guru will soon chip in...

[Franklan]

Germany has had the right to tax your worldwide income

I think this is wrong. Germany taxes the portion of your income that originates in Germany.
Oder...?

Nope. For example, if you live in Germany, close to the Dutch border, and you actually work in the Netherlands, commuting by car every day, you have to pay taxes on that income in Germany.

[bethannbitt]

My neighborhood, directly on the Swiss border, is filled with folks living here on the less expensive side while working for higher wages in . They are tax resident in cuz they reside here.

Likewise, our annual 401K withdrawals, in $ obviously, are taxable here in Germany as part of our worldwide income.

[Alberto]

Germany has had the right to tax your worldwide income

I think this is wrong. Germany taxes the portion of your income that originates in Germany.
Oder...?

Nope. For example, if you live in Germany, close to the Dutch border, and you actually work in the Netherlands, commuting by car every day, you have to pay taxes on that income in Germany.

I see.
How come then my UK rental is taxed by HMRC instead?
Maybe income from work is under different rules than rental income...?

[Sam-I-Am]

It's not about where you pay the tax (e.g. to HMRC for UK rental income) it's about having to declare your worldwide income. Double taxation agreements will mean you don't get taxed twice but you still have to declare it in Germany

[PandaMunich]

How come then my UK rental is taxed by HMRC instead?
Maybe income from work is under different rules than rental income...?

At the risk of repeating myself:
The double taxation agreement lays down which country has the taxation rights on which income.

You always have to tax your worldwide capital income (interest, dividends, profit from selling stocks/funds/bonds/options and so on, as well as the "fictive profit" called Vorabpauschale on any investment funds that you owned on 31. December, and newly: currency gains in non-current accounts) in your country of residence Germany.

And even if the UK gets the taxation rights on a type of income, e.g. on your UK rental profit through article 6 (1) of the double taxation agreement (DTA) between Germany and the UK: https://www.bundesfinanzministerium.de/ ... onFile&v=1
you still have to additionally declare your UK rental profit in your German tax return, since it is subject to the lesser evil of Progressionsvorbehalt as is laid down in article 23 (1) d) DTA D/UK, i.e. your UK rental profit will increase your German income tax rate on your other income.
For an example with numbers showing the effect of Progressionsvorbehalt, please scroll down to the section "Progressionsvorbehalt" on my website: https://expertise.tax/en/faq-german-tax ... /#resident

You cannot ignore this, because a few years down the line, the Finanzamt will write you a letter asking you why you didn't declare your worldwide capital income or employee income from a non-German employer that you earned from your German home office or your non-EU/EEA rental profit in your German income tax return.
The Finanzamt gets this information from the other country, and while they take a few years to process the data, they will get to you, eventually.

[GaryC]

Germany has had the right to tax your worldwide income

I think this is wrong. Germany taxes the portion of your income that originates in Germany.
Oder...?

No, it's not wrong - see PandaMunich's post.

[Alberto]

Alles klar, thanks a lot.

[colincostello]

Wow , having read all the posts above I am very glad that I have deided to use a UK accountant to sort out my tax position. It will cost me 200 quid, but it is money well spent. Just reading the above posts makes my head swim.

[Alberto]

Wow , having read all the posts above I am very glad that I have deided to use a UK accountant to sort out my tax position. It will cost me 200 quid, but it is money well spent. Just reading the above posts makes my head swim.

Only 200quid? Seems very little.

[GaryC]

Why are you employing a UK accountant to sort out your tax when you are tax resident in Germany? Subject to the double taxation agreement giving taxing rights to the UK, e.g. if you have UK property rental income, all of your income is taxable in Germany, and even items like rental income that are not taxed in Germany, must be included in your German tax return as they are taken into account when setting the rate at which tax is payable.

You need to inform HMRC that you are no longer resident and may need to submit a tax return in the UK if you have income that does remain taxable in the UK but other than that, what will you get for your £200?

[kiplette]

Colin. Have you told your UK tax advisor that you live in Berlin and have done so for a long time?

If you have been here more than half the year each year, then you are tax resident in Germany. This is not a matter of choice. Unless you are not anmelded and have no right to live here at all, in which case I guess it really doesn't matter what you do.

Your UK rental income is taxed in the UK, no change there. The Germans need to know about it.
Your UK pension income is likely due to be tax paid in Germany (ordinary age-related pension). If you have been paying tax on it in the UK, they refund that tax and you pay German tax instead, not both. There are simple forms for this. Sam-I-am below has done it and survived. There will be others here on Toyporn who will also have done it, maybe with pension income, and will be able to help you through the process.

Please deal with it properly, and don't just bash on with false assumptions - Gary and Panda know their stuff.

[GaryC]

I agree but until we know the facts and types of income it is not possible give more than generic advice.

[Jmb]

I have done it. The paperwork is easier than one would think, just a couple of forms. The annoying, nagging e-mails afterwards are hard to stop, and there may be implications for any source of income in the UK, i.e., a job in the UK, if you declare this.