Richard92024

Hi,
I'm a Brit who has lived mainly in the US for the last 20 years, but visited England at least once a year, for anything from 2 weeks to 5 months at a time.
I have a Green Card, but am not a US citizen.
I haven't ever formally told the UK government that I'm living in the US. I have been filing a tax return in the US, but not in the UK.

I have just received a small private pension payout in the UK, where UK tax has been withheld. I believe I can claim most of the tax back, but wonder whether it's best for me to claim as a UK Resident, or a Non-Resident.

Any suggestions would be gratefully received!
Thanks,
Richard

Pulaski

IMO You are not resident nor "ordinarily resident". As you have spent the majority of every year for the past 20 years outside of the UK, and the large majority of some (most?) of them, I can't imagine why you would think that you could be "resident" in the UK even if you wanted to be.

tantrum

It's also about maintaining 'sufficient ties' to the UK not just spending >183 days in a year there. In some cases, you could be a resident if you just spend 17 nights a year in your UK parents' house. Have a look at the official HMRC residency guidance; you may have been considered a resident in some of your earlier years away.

https://www.gov.uk/government/public...dence-test-srt

Richard92024

Thanks the the feedback... and especially the Residency Test link.

I didn't realise residency is a year by year thing... obvious, really, come to think of it. Duh...

I think I'll just fill in the tax form to reclaim the tax as if I am a UK resident, and see what they say. I prefer that option to having to declare the recent UK pension payout on my US tax return... that would mean paying more tax.

livinginUSA

It's worth checking out the SRT, because if you are not a UK resident, then there is no need to pay UK taxes unless it's UK sourced as far as I know. I don't think anyone here who is a UK citizen but is a US resident files any UK tax forms (unless land lord etc) if they have no UK income. And I believe you can claim that tax back...

Pulaski may be able to confirm that

Pulaski

How can you "reclaim the tax" if you are a UK resident? ...... Voluntarily claiming to be simultaneously resident in two different countries is a slippery slope to creating an unholy mess from a tax perspective. ...... AND as a green card holder you are required to complete a US tax return you are required and declare your world wide income, so I don't see what good you will achieve by claiming UK residence when you (probably) are not.

Pulaski

Agreed. If you are US resident/ green card holder/ citizen you should not, under most circumstances be filing a UK tax return, and I have not heard of anyone doing so voluntarily.

Others on here know more about taxes than me, so I await their input with interest.

Richard92024

Sorry for the confusion. Thank you for the advice...

I just had a "Lump Sum Trivial Commutation" (sounds painful!) when I took a small private pension early, at age 55, after the UK government just changed the rules.

The pension company said they had to deduct tax, which they did, before sending the payment to me. So that's why I want to claim it back. Total payment was £13K, of which £3K tax was deducted.

And my understanding is that if I'm a UK Resident, I can claim a Personal Allowance of £10,600, which would mean I pay no tax... Whereas if I'm not a UK Resident, I have to declare the UK income on my US tax return... which would definitely result in me paying tax.

mikelincs

AFAIK you will have to declare all your worldwide income on your US tax return. You are NOT a UK resident, so sgould get all your UK income untaxed, see HMRC to do that.

livinginUSA

^ This is what I understand to be true.

MMcD

If you have a Green Card, which you say you do, you are US resident.
The IRS is not concerned with your citizenship.
The answer to the question posed by your thread title is:...
NO, you are not "still a UK Resident (for tax purposes)"

As for your private pension income - you have no choice in the matter:
You *must* declare it on your US tax return. And pay tax on the income. Failure to do so is a crime.

Google for link to: HMRC US-2002 form.
Fill it out together with IRS form 8802, which it calls for. Google for link.
Be sure to read all Notes/Instructions for both forms.
You will eventually be accorded a NT tax status by HMRC. Once that happens your private pension will no longer be taxed at source.

MMcD

Just saw your follow-up post....
But it changes nothing with regard to what I posted.

You must declare the dollar conversion amount of the £13K on your US 1040 tax return (line 16a) when you file next April (presuming the payment you mention was received after 1 Jan. 2015). It's fully taxable as ordinary income.

ps. I'm not sure how tax credits work...but in any case- you cannot be double taxed.

Steve_

No you're not resident in the UK, but if you never told anyone you left, it would be a good idea to confirm it with HMRC so you can stop the income tax withholding.

If you have no intention of ever living anywhere else, I would recommend you apply for US citizenship, because it makes it easier to figure out your residency.

Someone mentioned the SRT - the relevant bit actually is Article 4 of the US-UK tax treaty which overrides the SRT. This does mention LPRs but if you're a US citizen who spends a fair amount of time in the UK, it becomes a simpler argument to point out where you are resident for tax purposes. Because you can always get on a plane and move yourself, and there's never an immigration issue that can come up.

nun

Your example is a good one of what not to do for British expats. If you leave the UK you should file a P85 to let HMRC know that you will be UK non-resident. This should make your tax code NT and you can then easily apply to have no UK tax withheld from any private UK pensions.

By not telling HMRC you are non-resident you have also missed the opportunity to pay voluntary Class 2 National Insurance Contributions which would have qualified you for a larger UK State pension.

Of course as a US tax resident you must include your UK pension (as part of your worldwide income) on your 1040 and pay tax on it to the IRS. You must also tell SSA about it as it might affect your US SS payment.