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Citizenship value

Citizenship value

Old Feb 18th 2020, 8:25 pm
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Default Citizenship value

Hi all.

I am in a position to apply for citizenship. My question is should I? What are the tax ramifications on my UK pension holdings?

Can anybody advise?
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Old Feb 18th 2020, 8:29 pm
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Default Re: Citizenship value

Originally Posted by Englishman Abroad View Post
.... I am in a position to apply for citizenship. My question is should I? What are the tax ramifications on my UK pension holdings?

Can anybody advise?
Presumably you're already a permanent resident, and have been for at least 3-5 years. .... So you are already subject to US taxes on your worldwide income and gains, and the tax ship sailed years ago - there are no additional tax ramifications of becoming a USC.
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Old Feb 18th 2020, 8:33 pm
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Default Re: Citizenship value

Originally Posted by Pulaski View Post
Presumably you're already a permanent resident, and have been for at least 3-5 years. .... So you are already subject to US taxes on your worldwide income and gains, and the tax ship sailed years ago - there are no additional tax ramifications of becoming a USC.
well, I have yet to access my pensions...I tried to get them out of the UK a few years ago to invest in an annuity, this fell on stoney ground..
wI'll I be taxed in both countries on any pension payout?

Last edited by Englishman Abroad; Feb 18th 2020 at 8:43 pm.
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Old Feb 18th 2020, 8:40 pm
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Default Re: Citizenship value

Originally Posted by Englishman Abroad View Post
well, I have yet to access my pensions...I tried to get them out of the UK a few years ago to invest in an annuity, this fell on stoney ground.
Will I be taxed in both countries on any pension payout?
You may suffer withholding tax in the UK, but as a non-resident you can claim it back. You will be liable for US income tax .... unless the pension is as a result of working for national or local government in the UK, in which case you pay income tax on the pension in the UK and not in the US.

You cannot transfer pensions or pension funds between the UK and US - the pension regimes are incompatible, and in any case I would strongly advise anyone to not transfer a pension out of the UK, at least until they have retired and want/ need to draw on it.

BTW please go back and "Edit" your post to add the "E]" to the end of my post where you quoted it (after the " [/QUOT " ), and accidentally deleted those two characters, to straighten your post out.

Last edited by Pulaski; Feb 18th 2020 at 8:43 pm.
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Old Feb 18th 2020, 8:43 pm
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Default Re: Citizenship value

Don't you want to be an active participant in the country in which you live i.e vote?
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Old Feb 18th 2020, 8:45 pm
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Default Re: Citizenship value

Originally Posted by Pulaski View Post
You may suffer withholding tax in the UK, but as a non-resident you can claim it back. You will be liable for US income tax .... unless the pension is as a result of working for national or local government in the UK, in which case you pay income tax on the pension in the UK and not in the US.

You cannot transfer pensions or pension funds between the UK and US - the pension regimes are incompatible, and in any case I would strongly advise anyone to not transfer a pension out of the UK, at least until they have retired and want/ need to draw on it.

BTW please go back and "Edit" your post to add the "E]" to the end of my post where you quoted it (after the " [/QUOT " ), and accidentally deleted those two characters, to straighten your post out.
OK, so I need to keep all funds UK side. My state pension will pay into my UK bank account I presume? Will I need a UK mailing address too for tax purposes?
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Old Feb 18th 2020, 8:50 pm
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Default Re: Citizenship value

Originally Posted by Englishman Abroad View Post
OK, so I need to keep all funds UK side. My state pension will pay into my UK bank account I presume? Will I need a UK mailing address too for tax purposes?
You can have your pensions, including your UK state pension, credited directly into your bank account in the US, and I would suggest that using a UK mailing address could complicate issues about proving where you actually live - in other words claiming to be US resident while using an address in the UK is going to muddy the issue.

Some people have their pensions credited to an account in the UK despite living in the US, others have them credited directly in the US. Either works, its just a personal choice.
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Old Feb 18th 2020, 8:52 pm
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Default Re: Citizenship value

Originally Posted by Englishman Abroad View Post
OK, so I need to keep all funds UK side. My state pension will pay into my UK bank account I presume? Will I need a UK mailing address too for tax purposes?
Your UK state pension can be paid directly into your US bank account, no UK address necessary.
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Old Feb 18th 2020, 8:57 pm
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Default Re: Citizenship value

Originally Posted by Pulaski View Post
You can have your pensions, including your UK state pension, credited directly into your bank account in the US, and I would suggest that using a UK mailing address could complicate issues about proving where you actually live - in other words claiming to be US resident while using an address in the UK is going to muddy the issue.

Some people have their pensions credited to an account in the UK despite living in the US, others have them credited directly in the US. Either works, its just a personal choice.
Dear gawds, is none of this stuff straight forward? I realise that Brexshit is seriously going to muddy the waters...and probably destroy the value of both mybstate and private pensions..

It look like the $700 for citizenship is a must have. I will proceed accordingly, thank you for your help and advice.
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Old Feb 18th 2020, 9:02 pm
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Default Re: Citizenship value

Originally Posted by Englishman Abroad View Post
Dear gawds, is none of this stuff straight forward? I realise that Brexshit is seriously going to muddy the waters...and probably destroy the value of both mybstate and private pensions. .....
No. This has nothing to do with your question, nothing whatsoever. Brexit is not going to muddy any waters that has anything to do with what you asked, neither state nor private pensions.

Once the economic dust settles the pound is likely to recover from the pre-Brexit lows. At the moment the pound has stablized about 10% above the lows seen shortly after the Brexit referendum.
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Old Feb 22nd 2020, 4:04 pm
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Default Re: Citizenship value

I sincerely trust that you are right. My partner and I have now decided that I WILL proceed with my application in the next few days.

Thank you for your reassurance.
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Old Feb 22nd 2020, 9:09 pm
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Default Re: Citizenship value

Originally Posted by Pulaski View Post
Presumably you're already a permanent resident, and have been for at least 3-5 years. .... So you are already subject to US taxes on your worldwide income and gains, and the tax ship sailed years ago - there are no additional tax ramifications of becoming a USC.
But as a PR, can't you simply 'abandon' your status - leave the country, etc - and not pay US taxes, whereas, as a citizen, you are legally required to pay taxes even if you never set foot in the US again?
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Old Feb 22nd 2020, 9:31 pm
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Default Re: Citizenship value

Originally Posted by Steerpike View Post
But as a PR, can't you simply 'abandon' your status - leave the country, etc - and not pay US taxes, whereas, as a citizen, you are legally required to pay taxes even if you never set foot in the US again?
I think there is an intermediate step, after 8 years??? as a PR, where you cannot just end your PR status by just walking away from it.
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