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Double taxation Uk/USA

Double taxation Uk/USA

Old Mar 25th 2009, 4:07 pm
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Default Double taxation Uk/USA

Hi,

I have just moved to Arizona and now have my "green card". I currently get a taxed pension from the Uk. Can I continue to pay tax in the UK and not pay any tax here in Arizona? I am currently not earning in the US.My wife is a US citizen and pays US taxes.

Any advice would be most welcome
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Old Mar 25th 2009, 4:48 pm
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Default Re: Double taxation Uk/USA

Originally Posted by Phoenixsuns View Post
Hi,

I have just moved to Arizona and now have my "green card". I currently get a taxed pension from the Uk. Can I continue to pay tax in the UK and not pay any tax here in Arizona? I am currently not earning in the US.My wife is a US citizen and pays US taxes.

Any advice would be most welcome
Depends what type of pension it is.

If a private pension or UK State pension you can elect to pay tax on it either in the UK or US. Wherever tax is paid the income must be shown on your US tax return and then I believe you claim the foreign tax credit on form 1116 if it was taxed in the UK

If it is a pension as a result of UK Government Service and you are not a US citizen it can only be taxed in the UK and doesn't require to be declared as income on your US tax return. (That is how my CPA does my UK government service pension)

Here in Oregon on their tax form for income you submit a figure from a box on the F1040 federal tax form. So as my pension isn't on the Federal form it escapes State income tax as well. How things work for Arizona State tax I don't know

Tax is quite complicated and you would be well advised to seek professional advice at least on a one off basis, because they should be able to help you decide where best to be taxed to pay the least amount.

Last edited by lansbury; Mar 25th 2009 at 4:57 pm. Reason: added para about Oregon tax
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Old Mar 25th 2009, 7:53 pm
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Default Re: Double taxation Uk/USA

Hi
Many thanks for this, as I have a UK government service pension I should only pay tax in the UK. Will confirm with a tax attorney here.

Regards
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Old Mar 25th 2009, 8:46 pm
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Default Re: Double taxation Uk/USA

The Club gets larger!

PS: looks like it changes when you become a US citizen.
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Old Mar 31st 2009, 4:14 am
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Question Re: Double taxation Uk/USA

Does a Local Authority Pension get classed as a government pension?
I have a Teachers pension which is governed by the same ruling - that I have to pay English Taxes on it.
I am also married to an American and this is my first year of having to try and sort all this out.
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Old Mar 31st 2009, 3:34 pm
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Default Re: Double taxation Uk/USA

Originally Posted by whispernomore View Post
Does a Local Authority Pension get classed as a government pension?
I have a Teachers pension which is governed by the same ruling - that I have to pay English Taxes on it.
I am also married to an American and this is my first year of having to try and sort all this out.
This is a link to the UK/US Tax Convention of 2001 which is the current one.

http://www.hmrc.gov.uk/pdfs/ukusa_dtconvention.pdf

Article 19 deals with Government Service pay and pensions and it says it includes Local Authorities.

As I've said before this is just my layman's opinion and you may wish to seek professional advice before committing your tax return to the safe keeping of the IRS.

Last edited by lansbury; Mar 31st 2009 at 3:36 pm.
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Old Mar 31st 2009, 5:51 pm
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Default Re: Double taxation Uk/USA

Thank you so much for your help
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Old Mar 31st 2009, 6:36 pm
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Default Re: Double taxation Uk/USA

Originally Posted by meauxna View Post
The Club gets larger!

PS: looks like it changes when you become a US citizen.

Perhaps it does for the UK/US citizens, but from the Canadian/US citizenship it does not. DH received his military pension for years before becoming a USC and all our tax accountant does it put it on the federal and because it is under said amount removes it. DH pays taxes on it in Canada. Now that he is a USC and receiving what Canada calls "old age pension", he does the same thing. The accountant never puts down what income tax was paid on the monies in Canada. But then Canada does not have a tax treaty with the US.
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Old Mar 31st 2009, 7:07 pm
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Default Re: Double taxation Uk/USA

Many thanks for the advice think i have sorted it now.
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