We moved back a while back and getting ready to retire
Jun 9th 2023, 6:00 pm
#1
The Kwisatz Haderach
Thread Starter
Joined: Aug 2008
Location: North Wales
Posts: 8,080
We moved back a while back and getting ready to retire
Dh and I both dual nationals moved back to UK 10 years ago and are getting ready to retire in UK. Both eligible for US social security pension and me eligible for UK old age pension when I'm old enough.
So do we pay UK tax on our payments from the US? I've heard it is deposited here in UK without tax with held from it
We've been filing US taxes each year and paying UK tax on earnings. I know there's an agreement for taxes or something I tried reading it, but dam I'm a nurse not a lawyer and can't make head nor tail of it to tell the truth.
Anyone had a similar situation?
So do we pay UK tax on our payments from the US? I've heard it is deposited here in UK without tax with held from it
We've been filing US taxes each year and paying UK tax on earnings. I know there's an agreement for taxes or something I tried reading it, but dam I'm a nurse not a lawyer and can't make head nor tail of it to tell the truth.
Anyone had a similar situation?
Jun 9th 2023, 10:27 pm
#2
Joined: Dec 2001
Location: Dixie, ex UK
Posts: 52,448
Re: We moved back a while back and getting ready to retire
Under most circumstances you pay income tax on all your income, including pensions (Social Security, state pension, company pensions, private pensions, 401k, etc.), where (country) you are living when you receive the income. An exception is that if you are paid a pension for government service, such as for having been a civil servant or in the military, then such pensions are usually, (but not always, depending on citizenship) taxed by the country paying the pension.
Rental income is also usually an exception, taxed first where the property is located, and then also included in your taxable income where you are living with a credit for tax paid where the property is located (the net effect being that that you pay whichever tax rate is higher). It should also be noted that the deductions to be made from gross rental income to reach net taxable profit may be significantly different in different countries.
Rental income is also usually an exception, taxed first where the property is located, and then also included in your taxable income where you are living with a credit for tax paid where the property is located (the net effect being that that you pay whichever tax rate is higher). It should also be noted that the deductions to be made from gross rental income to reach net taxable profit may be significantly different in different countries.
Last edited by Pulaski; Jun 9th 2023 at 10:32 pm.
Jun 10th 2023, 10:11 am
#3
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Joined: Aug 2013
Location: Eee Bah Gum
Posts: 4,136
Re: We moved back a while back and getting ready to retire
My wife and I are in a similar situation. We both get OAP, my wife is getting SS paid gross straight into our UK bank, (I'm waiting for a couple of years before claiming SS), and we are both dual citizens.
We pay no US tax on either SS or OAP but we report SS on line 6a of the 1040, with the taxable amount on line 6b as zero. Our tax accountant doesn't even report OAP on our 1040.
On our UK returns we pay tax on the full amount of OAP and she pays tax 85% of her SS with the comment in line 19 along the lines of "Due to my income level, only 85% of this is potentially taxable in the USA so I have claimed the same 15% exemption for UK tax purposes, which is permitted under the UK/USA double tax treaty."
We pay no US tax on either SS or OAP but we report SS on line 6a of the 1040, with the taxable amount on line 6b as zero. Our tax accountant doesn't even report OAP on our 1040.
On our UK returns we pay tax on the full amount of OAP and she pays tax 85% of her SS with the comment in line 19 along the lines of "Due to my income level, only 85% of this is potentially taxable in the USA so I have claimed the same 15% exemption for UK tax purposes, which is permitted under the UK/USA double tax treaty."
Last edited by durham_lad; Jun 10th 2023 at 10:16 am.
Jun 22nd 2023, 6:52 pm
#4
The Kwisatz Haderach
Thread Starter
Joined: Aug 2008
Location: North Wales
Posts: 8,080
Re: We moved back a while back and getting ready to retire
My wife and I are in a similar situation. We both get OAP, my wife is getting SS paid gross straight into our UK bank, (I'm waiting for a couple of years before claiming SS), and we are both dual citizens.
We pay no US tax on either SS or OAP but we report SS on line 6a of the 1040, with the taxable amount on line 6b as zero. Our tax accountant doesn't even report OAP on our 1040.
On our UK returns we pay tax on the full amount of OAP and she pays tax 85% of her SS with the comment in line 19 along the lines of "Due to my income level, only 85% of this is potentially taxable in the USA so I have claimed the same 15% exemption for UK tax purposes, which is permitted under the UK/USA double tax treaty."
We pay no US tax on either SS or OAP but we report SS on line 6a of the 1040, with the taxable amount on line 6b as zero. Our tax accountant doesn't even report OAP on our 1040.
On our UK returns we pay tax on the full amount of OAP and she pays tax 85% of her SS with the comment in line 19 along the lines of "Due to my income level, only 85% of this is potentially taxable in the USA so I have claimed the same 15% exemption for UK tax purposes, which is permitted under the UK/USA double tax treaty."
