theOAP

There are no special forms or procedures. If you want the SS benefit paid into a UK account, just inform the SSA. Exchange rates are the best available on the day of the transfer which is usually the 3rd of every month. If to a US account, it is still taxable only in the UK if a permanent UK resident. 100% of the benefit is declared to HMRC and taxed at UK rates.

For a 1040 tax return, filing an 8833 is an option , although thanks to the Totalisation Agreement, not a necessity. If a paper return is filed with the IRS, a note may be made (in pencil) next to the $0 taxable amount on the SS line. Both are CYA options. There are no specific instructions from the IRS for the non-taxed SS declaration.

For HMRC, declare the SS income on the foreign pages of a self assessment return under Pensions.

theOAP

On part (a) of the appropriate line*, put the amount from the 1099. On part (b) of the appropriate line* (taxable), put $0.

* I'm too lazy to look up what line that will be on the new 1040 form.

durham_lad

durham_lad

Beraider

I was under the impression that treaty provisions may apply depending of course on the particular treaty?

durham_lad

Beraider

Ahh, so not being a US citizen does have its advantages in some respects then😀

durham_lad

theOAP

In terms of tax and investment treatment, NRAs definitely have an advantage over USCs resident abroad. US citizens resident abroad have been campaigning for the last 5 years to be treated on equal terms with NRAs. The Tax Fairness for Americans Abroad Act was proposed in the last Congress, but still does not achieve equal advantages to those enjoyed by NRAs.

theOAP

In an above post, I said "For HMRC, declare the SS income on the foreign pages of a self assessment return under Pensions."

I'm just relieved you didn't ask about the 'amount' to declare.

I don't have any deductions for Medicare plans ('A' is free) and therefore list the gross amount from the 1099. I don't know what amount one would list on the HMRC self assessment if someone has additional deductions for additional Medicare programmes; the gross or net amount. If net, it would certainly complicate the apportionment calculations to void the UK tax paid on 1116.

Albert_dock

durham_lad

Albert_dock

theOAP

IMO, given your circumstances and your declared intention to have only US sources of income with no investments abroad other than a current bank account, renunciation would not yield an advantage, although owning a home abroad does present potential consequences. In this case as a USC, there are only the yearly tax and information (8938, FBAR which carry penalties for non-reporting) US filings along with determining how to report those US sources to HMRC. Given your circumstances, and as an NRA, you could still have substantial US yearly 1040NR reporting.

Renunciation is a very, very personal decision based on individual circumstances. Most who renounce are long term residents abroad with no intention of returning to the US, and have no personal close ties to the US such as immediate family or a desire to return at some date in the future. Most who renounce have sources of income from abroad and wish to partake in the normal investment opportunities of their resident country. Also, the foreign country will have established ways for a resident to prosper under specific programmes (tax free income, social benefits, etc.) which conflict with US established ways. Some USCs abroad are unable to renounce without suffering substantial financial hardships thanks to the Section 877A rules (as found on form 8854).

You've not mentioned family in the US or a desire to return in the future; renunciation is very dependent on those considerations.

Albert_dock