nun

The OP should not worry about "double taxation" as the tax treaty is in place to avoid that.

If he becomes UK resident he will have to pay UK tax on periodic payments from his US pensions (assuming they are not from Government service). If he is not a US citizen there will be no US tax due, if he is a US citizen US tax will be due, but he can use the UK tax paid as a credit on his US taxes. If he is getting SS then that can be paid to him in the UK and it will only be taxable in the UK. If he does not become UK resident he just pays US tax.

I don't really see the health insurance as a problem either. If he becomes resident he will get NHS coverage, if not he will still get free emergency treatment on the NHS and can buy a policy to pay for him to be flown back to the US for Medicare treatment. He should also make sure he continues to pay his medicare premiums while in the UK to avoid the 10% premium increase for each missed year pr payments.

2bretired

PS Just posted this before I saw nun post. I am a dual citizen born in UK. Medicare premium now comes out of my USA social security automatically. I have both USA and UK pensions. I continued to pay into the UK pension system when I originally left UK.

Due to the cost of medical insurance for my age it may be more cost effective to just pay dual income tax as a resident and then be covered under the NHS. I have only a small union pension all in the USA . plus UK and USA social security, tax paid in the USA. Due to the double tax agreement the tax due in the UK should be minimal except for paperwork.

Now I need to find a UK tax preparer.

I hope this helps somebody else. Bob

Giantaxe

What kind of policy would do that?

2bretired

I just read an article from the UK citizen advice that states you are covered if you receive a UK state pension and have lived in the UK for 10 consecutive years in the past. I lived for 29 consecutive years before I left and get a UK state pension. I will do some further research and post as soon as I find out.

Bob ( OP)!

nun

If you become UK resident your US SS will be only taxable in the UK, but your UK pensions will be both US and UK taxable. The US union pension will also be taxable in both the US and the UK. You have to pay the full UK tax first and then use that as a tax credit of US taxes, so its your US tax that will be minimal....in fact it will be zero if the UK has the higher tax.

2bretired

Looks like this will become a nightmare. My wife is staying behind in the US so does that mean half my union pension is taxed in the US, as we file a joint US return. Also what about California state tax.

I am beginning to feel like we all work for the company store.

Bob

nun

No your entire union pension would be taxable in the UK and the US. CA is a domicile state and until you establish domicile somewhere else you'll still have to pay CA tax. Having a home and spouse resident in CA would probably make that hard to do.

2bretired

Thanks nun,
This has now made me rethink this permanent resident thing. If instead, I commute for 3 months at a time and just figure out the possible medical problem. I will have no UK income, live at my parents house, cash from atm. USA bank, so how will they know I am there, I am just a tourists.

Just a thought. Bob

Giantaxe

Be aware that this is one of the categories that there is a proposal to abolish. In exchange, I think the proposal is for NHS access in return for at least seven years of NI contributions. But who knows how it will end up given the general anti-immigrant sentiment in the UK?

nun

Avoiding becoming UK resident is probably the easiest thing. If you can qualify for the NHS based on being a UK pensioner, previous residence, or NI payments rather than UK residence that would be useful. But even if you can't you will get NHS emergency treatment and you can buy some travel and repatriation insurance incase you have to come back to the US to use Medicare.

UK immigration will scan your passport when you enter, but I'm not sure how they coordinate with HMRC to monitor how many days you've been in the country. I suspect they don't do that for UK passport holders. Still I'd make sure you stay under the number of days to be classed as resident.

2bretired

Nun,
Being a dual national I have 2 passports UK/USA. Depending on the line at Heathrow I pick the shortest, either UK resident, they just look at UK passport and wave you through. Non resident they look at my passport and see born in UK and ask purpose of visit " checking on parents" then they normally just wave me through. As long as I leave and enter USA with a USA passport everybody seems happy. I enter UK with UK passport and sometimes leave with USA. Over the last 30 years there has been no problem except many years ago being stopped by special branch officer who was suspicious because I was not carrying any booze. I explained it was cheaper in the USA so why carry it, he smiled and let me continue.

Bob

durham_lad

I do the same thing, but note that when returning to the USA you must travel on your US passport.

If you don't have a UK bank I'm not sure if they will track your comings and goings but I keep a spreadsheet to keep a track of time spent in the UK to be sure I don't overstay and become resident before I am ready to do this in a couple of years.

Each time I spend a lot of time in the UK, using my UK bank ATM card I get a letter from the bank after returning, apologetically telling me that the IRS require them to keep a track of me and they have seen a lot of ATM activity over a long period and they require me to complete the IRS form stating how many days I have stayed in the UK this year and the previous 3 years, plus projections for the coming 4 years.

robin1234

Used to be that they just looked at you passport at Heathrow, but now (last two years maybe..) they actually scan in your British passport. That is, swipe it through if you have an older passport, if you have a new biometric passport you can go through the special line just for biometric passport holders. So I think they are systematically recording British Citizens entering Britain.

But when you leave, I don't think they scan your British passport. When checking in with the airline, I always use just my US passport since I'm traveling to Canada (I fly into Canada then drive across the border to get home.)

robin1234

I've never had this, maybe because I haven't spent enough time in England to trigger it? Just a few weeks every year. Or could it be because my bank is in the Isle of Man not the UK?

Giantaxe

I'm sure I read somewhere that there is a proposal to add scanning of the passports of outbound travellers.