Neillc37

Hi,
My mother who dealt with my parents money in the UK had a medical problem and is no longer capable of handling the finances. Hopefully she will improve but there is a chance she will not. My father has never dealt with the money at all and has no idea or desire to understand it. Other children live very close to my parents but they seems clueless on this as well.
So it's on me. Of course I love this stuff but I haven't lived in the UK for 20 years. I know the US system very well.
Clearly as a US citizen I want no ability to do anything with the money beyond looking at documents for tax purposes. I am fine with looking at paper copies or get the figures over skype while telling my kids to quiet down :-).
My parents are low income retired persons.
It seems my mom filed R30 as she can remember this. Looks easy enough and I understand it's to get some withholding back because of over payment.
They didn't keep copies though which would help me see what they filled.
So my question is what else besides this form would a low income couple file at tax time? Can you file stuff so the withholding is closer to being what they will actually pay to avoid the R30 each year? Tips or tricks to lower their tax bill etc?
As far as I know they likely have interest maybe dividends (they have ISA's so there may be no dividends that are taxable). State pension I guess. Maybe a company pension but it would be low if there is one. I don't have any documents yet.
Thanks for any hints etc. Going to be fun understanding this.

Nutmegger

Sorry to hear of your parents' problems. Can't help with any of the tax stuff, but could you get a power of attorney or some kind of conservatorship so that the tax and bank people would be willing to discuss your parents' finances directly with you?

nick.simpson19

There retired... taking a state pension so therefore they dont pay an tax at all on it!

They shouldn't pay any tax unless there earning a lot of money from other sources than pensions such as property...

robin1234

As Nutmegger said, power of attorney etc., but in addition, I'd suggest that to do it properly, you need to visit your parents. (Maybe you do that on a regular basis anyway?) That way, you could discuss the whole situation with your parents, get a picture of the entire income and assets scenario, and obtain photocopies of enough documents that you'll really be starting from a position of knowledge. Maybe also be able to talk to bank representative and other financial folk with a parent in attendance. Also, maybe you could talk with family members who could deal with specific tasks on a regular basis? Such as forwarding certain correspondence to you, etc.

When I dealt with this sort of thing on behalf of my mother, I just felt I got stuff done face to face as opposed to spinning my wheels with sometimes ineffective emails and phone calls....

Neillc37

Very bad idea. Hey dad we need to sent the US IRS all your bank and other account details. They want the balances of your stuff, account numbers etc. There is a $10k fine if I don't / account/year. In fact if I don't on purpose they can take 50% of the account value / year. If we forget to keep a record for 7 years what happens with these accounts we get fined $10k / year / account. If we don't record it on purpose they want 50% of the balance / year / account.
No dad they need a warrant to get the bank details of US citizens with a high street bank like yours.
Hey dad the US just added form BE30 to sting you for $10k. I know it seems strange buy the US likes forms with penalties and have a long list of them (FinCen114, 8938, BE30, 3520, 3520-A etc). No dad they really do take the money from ordinary people. Just ask the tax payer advocate.

Honestly there is no need for this. My dad is fine. He is a smart though uneducated guy. My mom wants me to do this form. I want input like:

Yep that's the right form and OAPs file that every year. Or yep that works but file this other form to avoid it forever. Or consider filling this if they have this kind of income.

robin1234

Oops I unreservedly apologise for my post.

Neillc37

You have no reason to apologize. It was a reasonable suggestion that's unneeded in my case. It's unfortunate that in finance that crosses borders it's often a very bad idea to include a US person. Few people realize that power of attorney carries such a burden for US persons. I won't be taking this on ever if there is any other choice. Just too much risk.

mikelincs

I am a UK pensioner receiving a state and NHS pension, I have not filled in any tax form since well before I retired, HMRC send me a tax statement every year saying how much I get in allowances, how much of my income is taxable and how much tax I've paid, but I don't fill in any form.

Neillc37

My limited investigation said that say a bank account has tax withheld (I already knew this from my own foreign tax credit stuff) and that a low income earner can get this back via R30. The article I saw suggested that many people don't file this form and get taxed too much. So it seems my mom was ahead of the curve at least on that.

mikelincs

Ahh, well I don't have savings or a bank account that gets interest, so that's why I don't need a form.

theOAP

@Neillc37

Are you thinking of form R85 for taxable accounts?
https://www.gov.uk/government/public...m-6-april-2015

Dividends for standard rate taxpayers are tax free:
https://www.gov.uk/tax-on-dividends/...ends-are-taxed

IMHO, I tend to agree with mikelincs. HMRC auto-deduct if there is tax due, and unless you hear from them, everything takes care of itself (for low income individuals). Have someone keep an eye out for a brown envelope from HMRC. If one comes, then they are to alert you.

*All joint accounts are split 50/50 for tax purposes.

Neillc37

I said R30 but it's R40 sorry:

https://www.gov.uk/government/public...nvestments-r40

Neillc37

That form R85 looks promising as an alternative to filling every year.

theOAP

Yes, R85 stops withholding before it starts, R40 asks for a rebate if tax shouldn't have been withheld due to the taxpayer owing no tax.

nun

There won't be any tax withheld from the state pension, it's paid gross. If there are any other pensions or investment income they will be paid net of any tax. You need to make sure your parents have the right tax code and the correct amount of tax is being withheld. Most people won't file a tax return at all. This is a bit strange for anyone use to the US system where you usually get stuff paid gross and settle up at the end of the year.