UK ISAs and SIPPs - Tax implications in Germany

[9000]

thanks indeed the amount would be under those allowances. I am inclined not to submit returns.

The effort required to compile the information would also be quite onerous as the statements are only available on paper and go back quite a few years.

[NickSachsen]

Hi PandaMunich and everyone,

I'm in a similar situation to Seu.

I have two UK stocks-and-shares ISAs. When I came to Germany 8 years ago it did not occur to me that these were not also tax-free in Germany (naïve I know). So now I'm trying to find out how to sort it out, get legal and pay whatever I need to pay.
During the 8 years in Germany I have withdrawn money a few times.

Would you suggest that most Steuerberater in Germany would be able to help me, or only ones familiar with foreigners' finances?

Many thanks, Nick

[PandaMunich]

I have two UK stocks-and-shares ISAs. When I came to Germany 8 years ago it did not occur to me that these were not also tax-free in Germany (naïve I know). So now I'm trying to find out how to sort it out, get legal and pay whatever I need to pay.
During the 8 years in Germany I have withdrawn money a few times.

Would you suggest that most Steuerberater in Germany would be able to help me, or only ones familiar with foreigners' finances?

The latter.
For example, you could ask Stefanie Neshyba-Kaiser: https://steuerberatung-neshyba.de/

[NickSachsen]

Thank you, I will contact her.

May I ask a few more questions?
1. How are the withdrawals taxed?

2. If I keep the UK ISAs until I leave Germany, will they be taxed at the time of leaving for the profit that has accumulated during my time in Germany?
Or will Germany just keep the Vorabpauschalen that I've paid?

3. As this goes back 8 years, am I going to pay really big late payment penalties?

Best wishes,
Nick

[PandaMunich]

1. How are the withdrawals taxed?

It isn't withdrawals that you have to tax in Germany with a UK ISA, like they do for real retirement plans, but the income generated within the ISA all along.
--> you have to tax the capital income (which includes the "fictive profit" = Vorabapauschale) within that ISA every year.

2. If I keep the UK ISAs until I leave Germany, will they be taxed at the time of leaving for the profit that has accumulated during my time in Germany?

No, not unless you own more than 500,000€ worth of just one investment fund, please see here for details: https://willipedia-plattes-net.translat ... r_pto=wapp

Or will Germany just keep the Vorabpauschalen that I've paid?

Yes.

3. As this goes back 8 years, am I going to pay really big late payment penalties?

If your total capital income each year was under the Sparer-Pauschbetrag (= tax-free allowance for capital income, which was 801€ per person until 2022, 1,000€ from 2023. If you have a spouse, it's double that, you get to use your spouse's unused part of their Sparer-Pauschbetrag) then you did not commit tax evasion.

If you did commit tax evasion, you need to do a Selbstanzeige and then all you have to pay is the tax of 26.375% (= 25% Abgeltungsteuer, i.e. income tax + 1.375% = 25%*5.5% Solidaritätszuschlag) of the amounts above the Sparer-Pauschbetrag, plus 1.8% per year late interest on this extra income tax amount