apparet

Hello everyone

I'd really appreciate a little help. Here are my circumstances. I've lived in the US since 2007 and am just about to move on to my second green card. In the UK I have a small private pension pot, a final salary pension, and, have paid enough NIC contributions to qualify for a full UK pension. In the US I have paid over 10 years of contributions to social security and have a reasonably substantial pension pot with TIAA-CREF. I'm wondering about applying for US citizenship and where to retire.

So I guess I could fall into one of 9 categories: resident in the US, the UK or both (50:50 split) AND US/UK citizen, just UK citizen/US LPR and UK citizen/give up LPR.

I'm sure there are some experts who can point me in the right direction here to a relevant thread(s) or have a go at tackling the issue head-on. What are the tax implications of the different circumstances?

Pulaski

The only significant tax question I see is whether you retire in the UK and give up your green card. From a tax perspective it makes no difference if you are a USC or a permanent resident, the tax situation for both is identical. So where do you want to retire?

Per above, if you intend to spend much, or all of your time in the US then you should apply for citizenship and then no matter where you are or what happens in your later years of life, your right to remain in the US is guaranteed. .... Imagine if you're in a care home when your green card falls due for renewal - you'd be relying on others to prepare the renewal documents and send them to the right place.

durham_lad

I agree with Pulaski’s post above.

My wife and I are in almost exactly the same situation, with private and state pensions in both countries (SS & OAP), IRAs etc. We chose dual citizenship and decided to split our time 50/50 but 6 weeks into the first year of the 50/50 decided to sell up in the US and live full time in England. Our daughter lives in California so we visit each year.

Good luck with whatever you choose, please feel from to post any other questions.

apparet

What would be the difference if I give up my green card and retire tin the UK? Is there a tax advantage to doing that?

Pulaski

As a US citizen or permanent resident you would be required to continue submitting annual tax returns no matter where you live.

If you are ambivalent about where you live in retirement, you might want to consider the cost of health insurance during retirement in the US, as that mounts up over the course of retirement.
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apparet

First, let me say thanks for responding.

The only difference would be submitting a US tax return, not the amount of tax paid?

Naively I was thinking I would be covered by medicare. Is that not true or am I missing something?

Pulaski

Probably, more or less, thought the rates and allowances are different.
Unfortunately "covered by Medicare" doesn't mean what you think it means. Typically when you enroll for Medicare you will add (IIRC, as I am not very current on my knowledge as I not close to retirement myself), "Part B" and "Part C", and I think some people add "Part D" ... I am sure Google will help you with research. And you also enroll for a prescription plan. All these add-ons cost money .... then there are still copay and deductibles to deal with. The result of all this is that it is recommended that, for a stress free retirement when it comes to medical care and prescriptions, a couple should go into retirement with $250k (that is not a typo!) for out of pocket medical expenses through their retirement.
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durham_lad

Exactly.

plus Medicare is US only so if traveling overseas you need an alternative. OP talked of spending many months in the U.K. so if he is tax resident in the USA only will need private insurance to cover health costs.