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Being taxed on UK State pension

Being taxed on UK State pension

Old Jan 24th 2022, 2:58 pm
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Default Being taxed on UK State pension

I have lived in US for 20 years.
Started drawing my UK State Pension in 2018 and received tax demand for year 2018-2019.
Immediately sent HRMC form Form US Individual and form 8802 - Certification of US residency - to US IRS and they confirmed they had sent relevant documentation to HRMC to confirm my residency.
HRMC sent letters saying they have received no correspondence from IRS.
IRS again sent confirmation of residency in 2020.
HRMC again sent letter saying no correspondence from IRS and I have received tax demands ever since.
I sent a couriered package with covering letter plus document 6166 (Certificate of Residency) from the IRS confirming residency in August 2021. Again, letter from HRMC saying they have received nothing with regard receiving IRS documentation, even though they confirmed receiving my covering letter.
When phoning Pensions section of the HRRMC today, could not contact the individuals who had written letters and had to explain situation several times to different support people. Now waiting for result of investigation....
Anyone had this experience? Does anyone have a specific person/department/contact number to sort out this problem?
Many thanks.

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Old Jan 25th 2022, 11:56 am
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Default Re: Being taxed on UK State pension

What a nightmare. I can't offer any suggestions as it all worked as it should when I sent in my form 8802 to the IRS some years ago.
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Old Jan 25th 2022, 2:01 pm
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Default Re: Being taxed on UK State pension

Ran into similar problems last year, both at the IRS end and HMRC. It appears that work from home has caused workflow issues and misplaced documents. I gave up and until Covid pandemic is over, backlogs reduced, work routines are stabilized I am ensuring any withdrawals of UK state pension plus personal pensions are maintained at a level where I can utilize Foreign Tax Credit on my IRS returns and claim any and all UK tax withheld each year and not exceed the maximum allowed on the FTC. Therefore I do not have to carry over unused UK tax withheld into following tax year eligible for FTC. Agreed it is frustrating.
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Old Jan 25th 2022, 4:35 pm
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Default Re: Being taxed on UK State pension

Again phoned HRMC. Was on hold for 30 minutes but then spoke to a very polite young man. After going through my problem, AGAIN., he put me on hold while he went off to look to see what documents were in my file. He came back and said he was putting me through to a specialist technical person ! (horrors I thought, I'm going to be cut off while being transferred - after being on the phone now for 45 minutes already).
Explained situation, AGAIN, to technician, who took details of the couriered package I sent in August (which contained the necessary US Certificates of Residency) She said she would call me back with info. (OK I thought only been on phone for over an hour and will probably be forgotten about once this call ends.)
She called back 20 minutes later !
She had found the necessary Certificates of Residency !! Her explanation for why they had not been recorded was that all docs get scanned when first received at HRMC - however these original docs could not be scanned due to certain anti fraud elements in the document !!? So just stuffed in my file ??? Who knows.
She was going to cancel the tax demands, and change my tax status - she would confirm same in letter to me.
Am now awaiting with bated breath for the letter.
So 3 years later, several tax demands, couple of hours on the phone and over 200 GBP lighter from applications to IRS and couriered packages to UK, I might be looking at settling this issue.
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Old Jan 25th 2022, 5:15 pm
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Default Re: Being taxed on UK State pension

Sorry to hear that you have had such problems. I hope your latest attempt to resolve it proves successful.

When I applied I used HMRC Form

Double Taxation: UK-USA (SI 2002 number 2848) (Form US-Individual 2002)

https://www.gov.uk/government/publications/double-taxation-united-kingdomunited-states-of-america-si-2002-number-2848-form-us-individual-2002

This seems to be specifically for this purpose. I wonder if that affected how your claim was (not) treated.
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Old Jan 25th 2022, 5:21 pm
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Default Re: Being taxed on UK State pension

Originally Posted by MidAtlantic View Post
Sorry to hear that you have had such problems. I hope your latest attempt to resolve it proves successful.

When I applied I used HMRC Form

Double Taxation: UK-USA (SI 2002 number 2848) (Form US-Individual 2002)

https://www.gov.uk/government/publications/double-taxation-united-kingdomunited-states-of-america-si-2002-number-2848-form-us-individual-2002

This seems to be specifically for this purpose. I wonder if that affected how your claim was (not) treated.
Thank you for your response.
Form US Individual 2002 (the one the HRMC issues) and Form 8802 (the one the IRS issues) were both completed (twice) by me and sent to the IRS. The IRS then sent a stamped copy of Form 2002 AND the Certificates of Residency to the HRMC (twice)
Both times the HRMC said they had received nothing.
It was only when I sent Certificates of Residency by courier that HRMC is now saying they have them....... I provided tracking details and the name of the person that signed for them....

Hopefully, this problem has been resolved..... awaiting confirmatory letter from HRMC
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Old Jan 25th 2022, 5:55 pm
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Default Re: Being taxed on UK State pension

Sounds like you might now be seeing a bright light at the end of the tunnel.

By the way, “HRMC” is actually HMRC (Her Majesty’s Revenue and Customs). Didn’t want to mention it until you got your issue resolved
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Old Jan 25th 2022, 5:57 pm
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Default Re: Being taxed on UK State pension

Originally Posted by durham_lad View Post
Sounds like you might now be seeing a bright light at the end of the tunnel.

By the way, “HRMC” is actually HMRC (Her Majesty’s Revenue and Customs). Didn’t want to mention it until you got your issue resolved
Whoops....of course, you are correct.....
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Old Jan 28th 2022, 2:32 pm
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Default Re: Being taxed on UK State pension

Originally Posted by SanDiegogirl View Post
Again phoned HRMC. Was on hold for 30 minutes but then spoke to a very polite young man. After going through my problem, AGAIN., he put me on hold while he went off to look to see what documents were in my file. He came back and said he was putting me through to a specialist technical person ! (horrors I thought, I'm going to be cut off while being transferred - after being on the phone now for 45 minutes already).
Explained situation, AGAIN, to technician, who took details of the couriered package I sent in August (which contained the necessary US Certificates of Residency) She said she would call me back with info. (OK I thought only been on phone for over an hour and will probably be forgotten about once this call ends.)
She called back 20 minutes later !
She had found the necessary Certificates of Residency !! Her explanation for why they had not been recorded was that all docs get scanned when first received at HRMC - however these original docs could not be scanned due to certain anti fraud elements in the document !!? So just stuffed in my file ??? Who knows.
She was going to cancel the tax demands, and change my tax status - she would confirm same in letter to me.
Am now awaiting with bated breath for the letter.
So 3 years later, several tax demands, couple of hours on the phone and over 200 GBP lighter from applications to IRS and couriered packages to UK, I might be looking at settling this issue.
I am sorry you had to go through all of this. It is sad when not only you follow the procedure that they set up and the system fails you, but then you have to clean up their mess! It seems to me that they need to streamline the transfer process between the IRS and HMRC. If their explanation about scanning was true, you would expect it to affect every application sent in this way, would you not?

I shall be going through this process in the near future and your ordeal does not fill me with a lot of confidence. Any advice from your experience you could give on what to do differently would be welcome. Also, do you know the earliest time that you can apply for your State Pension before actually receiving it?
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Old Jan 28th 2022, 4:34 pm
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Default Re: Being taxed on UK State pension

Originally Posted by imacd View Post
I shall be going through this process in the near future and your ordeal does not fill me with a lot of confidence. Any advice from your experience you could give on what to do differently would be welcome. Also, do you know the earliest time that you can apply for your State Pension before actually receiving it?
You can apply 4 months before you are eligible
https://www.gov.uk/new-state-pension/how-to-claim
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Old Jan 28th 2022, 7:38 pm
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Default Re: Being taxed on UK State pension

Originally Posted by durham_lad View Post
You can apply 4 months before you are eligible
https://www.gov.uk/new-state-pension/how-to-claim
Thanks for your reply.
So how ling before you are eligible for the UK State pension, can you send in the Form US Individual 2002 (the one the HRMC issues) and Form 8802 (the one the IRS issues) to the IRS?
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Old Jan 28th 2022, 8:43 pm
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Default Re: Being taxed on UK State pension

Originally Posted by imacd View Post
Thanks for your reply.
So how ling before you are eligible for the UK State pension, can you send in the Form US Individual 2002 (the one the HRMC issues) and Form 8802 (the one the IRS issues) to the IRS?
I sent mine in the month I received the first payment of my UK private pension. I’m sure I could have sent it in earlier and wish I had as by the time it went through I had had 2 months of PAYE which was immediately refunded. I would suggest sending them in the same time you apply for your OAP 4 months before receiving it.
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Old Jan 31st 2022, 7:15 pm
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Default Re: Being taxed on UK State pension

Is it to naïve to suggest HMRC should be just told to '$#%^ off'?
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Old Jan 31st 2022, 7:31 pm
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Default Re: Being taxed on UK State pension

Originally Posted by PetrifiedExPat View Post
Is it to naïve to suggest HMRC should be just told to '$#%^ off'?
It's an attractive proposition but at some time I'm going to be applying for my UK private pension and if I don't sort this out now they'll be taxing me on that too....
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Old Jan 31st 2022, 8:47 pm
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Default Re: Being taxed on UK State pension

Originally Posted by PetrifiedExPat View Post
Is it to naïve to suggest HMRC should be just told to '$#%^ off'?
Exactly how would that work?

Once you are receiving income from a UK pension HMRC have the right and the ability to extract taxes. They do so by informing the provider of the tax code you have been assigned and unless that tax code is NT 0 they will start sending tax to HMRC using P.A.Y.E. Having the IRS inform HMRC that you are tax resident in the USA is the way to stop them extracting taxes from your UK pension, telling your pension provider to ignore the tax code you have been assigned will not work.
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