technolog

Before I left the UK, I informed HM Revenue & Customs of my departure (via form P85 I believe). They have sent me a letter with form 'US-Individual 2002' included. Apparently the form is for claiming relief from UK tax.

First of all, am I right to think that relief from UK tax is a 'good thing'?

My only continuing UK income is from an occupational pension scheme and totals around the £3,000 p.a. mark.

Submission of the US-Individual 2002 form also requires US Residency Certification via IRS form 8802. This requires an $85 fee payment. The 8802 form requires me to enter a US taxpayer identification number which I don't yet have as I entered on a K-1 visa and am not yet able to work.

So, my questions are:

1. Am I right to think I ought to apply for UK tax relief?

2. If so, should I wait until I have a job (and thus a US taxpayer identification number)?

rpjs

You can apply for a Social Security Number right now.

As you are now resident in the US, even if you aren't yet a Permanent Resident, you are now liable for US income tax so you need to declare that UK income to the IRS. If you pay UK tax on it, you can claim that as a tax credit so you're not also paying US tax on it.

I guess it depends on where you want the tax on that income to go to, but if you're planning to stay in the US I'd suggest it'd make your affairs simpler if you send in the form to HMRC and remove the UK tax from the picture.

technolog

Thanks for the reply. No problems will arise from waiting until I take up employment (hopefully in October) so that I have a TIN to use to complete form 8802 then?

rpjs

I shouldn't think so, although I don't know whether HMRC will refund any UK tax deducted between you filing your P-85 and the US-Individual 2002 forms.

But you are allowed to apply for a SSN now, although it will be issued with an endorsement that it's not valid for work without USCIS authorization (i.e. the EAD which I see in your other thread you've applied for). You will have to get an SSN at some point and you'll practically need it to work alongside your EAD once you get that. You do realize that your SSN is your taxpayer identification number in the US?

(I hope you're not thinking of an ITIN: that's only for people who don't qualify for an SSN - but you do)

technolog

I didn't but I do now! I'll take another look at the forms armed with this invaluable info. Thanks!

RICH

I don't think you need to fill the 8802 form if your UK income is 3k, as that is well below a UK taxable level, so relief from what? I may be wrong.

JAJ

Although it's expected that the U.K. personal allowance will be greatly restricted, or otherwise withdrawn, for non-residents starting in April 2015 (Subject to legislation, etc.).

So in general, it's better to cleanly exit the U.K. tax system if possible, and then only need to deal with the IRS. Even if there is an $85 fee.

That said, the IRS will normally expect to see a Social Security Number on form 8802, and they may also not want to issue certification until a U.S. federal tax return has been filed. But is there any PAYE withholding on the U.K. pension currently? If not, it may be possible to wait a number of months before filing the 8802. But do be prepared for withholding of PAYE in April 2015, if current Government plans take effect.

technolog

So if I pay $85 (every year?) I avoid having to file a UK tax return? Is my pension tax-free (or at least tax-refundable) in both jurisdictions?