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Retiring in the UK - US/UK Tax Treaty questions

Retiring in the UK - US/UK Tax Treaty questions

Old Feb 1st 2024, 10:01 pm
  #16  
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Default Re: Retiring in the UK - US/UK Tax Treaty questions

Originally Posted by jennyjroe
Thank you, this is super complicated. I much appreciate your knowledge. To my earlier question, do you know of anyone with this kind of knowledge, a CFA with international experience?
I’m afraid I don’t know any CFAs, all my knowledge has come from retirement and expat forums. The WEP issue affects a lot of folks living in the USA and having earned salaries from US jobs that didn’t pay into SS because they were government jobs with their own pension schemes as an alternative to SS. It just so happens that WEP applies to all pensions that have been earned from jobs that never paid into SS which includes foreign pensions derived from earned employment.
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Old Feb 2nd 2024, 9:46 am
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Default Re: Retiring in the UK - US/UK Tax Treaty questions

Originally Posted by jennyjroe
The advice on this site is amazing, but it's too complex for me to get a hold on. I appreciate this is not a "recommendation" site but has anyone here found a trustworthy CFA to help navigate this situation of moving back to the UK? And can they recommend ?

I'm a US green card holder and plan to move back to the UK in 2024, aged 63. I'm interested why Durham_Lad - who retired at 55 - will only draw on the SS in the US at age 70.
I figured - because of the WEP provision - it was better to take the SS sooner rather than later, since WEP will kick in once I claim my UK pension, age 67, resulting in a deduction in SS.

As well as a 401a, I have a 403b in the US, plus UK investments. I need to identify a trustworthy CFA who can help roll these into an IRA that supports overseas customers (or pay a tax attorney to help transfer them back to the UK). I file in the US currently, but I'm assuming if I relinquish my green card (say in 2028 when it expires) I won't need to file tax in both countries, just the UK.

Any help much appreciated.
That's what I did (took my US SS as early as possible, to avoid WEP before I hit UK state pension age).

Be advised that negotiating the tangled web of WEP takes ages, due largely to the ridiculous amount of time it takes for US SS to process the relevant forms. A potted history of my experience:

Background: I qualify for US SS, but with sufficiently few years' contributions that I am subject to WEP. I can't remember the form numbers of half the forms I refer to below, but can find them if it's important.

I received seemingly random forms and letters from the US, telling me to fill them in and send back to the US. This was over a year before my UK retirement age of 66. I subsequently learned that the best route is to send to FBU in London. Gets there more quickly, and they scan and send to the US anyway. I've also found that it's best to call FBU London to get any sensible answers (though read further down for the fact they can't necessarily solve your problems, all they can do is tell you what stage you are at).

Received a notification of over-payment from the US (Maryland, I think), saying they would start reducing my US SS. I filled in an appeal form and sent back to the Maryland office. Regardless, about 5 months after my 65th birthday, they reduced my SS for 3 months, then they stopped payments completely for a couple of months. Then they paid back everything they had withheld, 2 months before I was due to start receiving UK state pension

I sent the relevant WEP assessment form about 3 months before my 66th birthday. Now, 9 months after starting to receive UK state pension, US SS are still paying me the full amount when they should be reducing my payments!

I called FBU a while back and was told they needed me to fill in a form granting permission for DWP to confirm my NI payments to US SS. They have had these forms for 4 months now. I presume either DWP haven't returned the information yet, or US SS is the cause of the delay.

Ho hum. At some point I expect my US SS to be stopped completely for several months for WEP to "catch up" with the fact I have been overpaid for almost a year.

Bottom line: If you are resident in the UK when you are about to reach age 65, anticipate the issue above (FBU told me, "They keep doing this, even though they know UK state pension age is 66"). Also, do everything via FBU - call and request forms from FBU, send the forms back to FBU (not Maryland), and call FBU with any queries.

I personally wouldn't bother trying to find a CFA to help you sort out these problems. If one exists (I doubt it), the money you pay them wouldn't be worth it, and I don't think they would be able to get things sorted any faster than you could yourself.

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Old Feb 2nd 2024, 3:32 pm
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Default Re: Retiring in the UK - US/UK Tax Treaty questions

Thank you dunroving this super helpful and confirms my thinking about taking the SS sooner rather than later (my UK retirement age is 67). And thanks for tip about using the FBU in London. And about not using a CFA. Did you go into a SS office in person in the US before you left to sort all this out?

PS I'm wondering if you're in Scotland, Driech Alba is where I'm returning to
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Old Feb 2nd 2024, 4:58 pm
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Default Re: Retiring in the UK - US/UK Tax Treaty questions

Originally Posted by jennyjroe
Thank you dunroving this super helpful and confirms my thinking about taking the SS sooner rather than later (my UK retirement age is 67). And thanks for tip about using the FBU in London. And about not using a CFA. Did you go into a SS office in person in the US before you left to sort all this out?

PS I'm wondering if you're in Scotland, Driech Alba is where I'm returning to
Glad to be of some help. A related comment is that if you expect to live to a ripe old age, the benefit of taking SS early/non-WEP'ed for a few years may not outweigh the possibility of receiving a higher base SS payment for longer. Men in my family have a nasty habit of dying in their 50s (I'm 66), so I thought it better to take SS while I'm still alive! ;-) I think I did the maths and the flex point where I'd have benefitted from delaying US SS is something like 79 years old. If I live that long, I doubt I will have a very expensive lifestyle, so it's irrelevant.

I was .... <<thinks hard>> ... 49 when I left the US, knew absolutely nothing about WEP at the time and didn't even realise I would qualify for a US SS pension. So everything I describe above, and prior, was done from the UK. I'm not 100% sure, but I *think* you can only use FBU if you are living in the UK ... worth checking if you think you will be in the US when you need to sort this out. It's really only the WEP side of things that you'd need FBU for - but as per my experience, you may need WEP help before you reach 67 if they start WEP'ing you from age 65.

I'm no longer in dreich Alba, but haven't changed it in my profile. I took early retirement and left Scotland in 2018. I do miss the great walking and cycling country I left behind, straight out of my front door onto the hills. I'm now in the Midlands.
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Old Feb 2nd 2024, 5:57 pm
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Default Re: Retiring in the UK - US/UK Tax Treaty questions

I also never went into a SS office in the USA before returning to England.

Easiest way to contact the FBU is via their website. Even during COVID’s lockdowns my wife received a couple of phone calls from them, an FBU employee working from home, we could hear a child in the background.

https://uk.usembassy.gov/u-s-citizen...eral-benefits/
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Old Feb 3rd 2024, 9:11 am
  #21  
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Default Re: Retiring in the UK - US/UK Tax Treaty questions

Originally Posted by jennyjroe
Thank you dunroving this super helpful and confirms my thinking about taking the SS sooner rather than later (my UK retirement age is 67). And thanks for tip about using the FBU in London. And about not using a CFA. Did you go into a SS office in person in the US before you left to sort all this out?

PS I'm wondering if you're in Scotland, Driech Alba is where I'm returning to
FYI, I wrote a more detailed record and lessons learned in a separate thread elsewhere in the MBTTUK forum (titled, "Navigating US Windfall Elimination Provision (WEP) in the UK").

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Old Feb 3rd 2024, 12:09 pm
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Default Re: Retiring in the UK - US/UK Tax Treaty questions

Originally Posted by dunroving
FYI, I wrote a more detailed record and lessons learned in a separate thread elsewhere in the MBTTUK forum (titled, "Navigating US Windfall Elimination Provision (WEP) in the UK").
That is an excellent thread, it was good of you to take the time to post your experiences. I’ll be applying for myself towards the end of the year to start collecting in February 2025.

I have used their calculator to estimate my benefits including reduction through WEP. The useful thing about this accurate calculator is that it didn’t make any difference putting in my OAP as my 2 private pensions WEP’ed me to the max for 25 years of contributions. (It ramps down between 20 and 30 years).

https://www.ssa.gov/benefits/calculators/

https://www.ssa.gov/benefits/retirem...iaWepjs04.html


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Old Feb 3rd 2024, 4:39 pm
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Default Re: Retiring in the UK - US/UK Tax Treaty questions

Thank you for the additional information and links, this is all very helpful information
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