malch

I am a British citizen residing in the USA since 1992. I'm also a naturalized US citizen. I will soon be starting to receive multiple sources of UK pension income:

* UK State Pension. I've been paying voluntary Class 2 contributions
* Income from a UK Annuity
* Income from two UK occupational pension schemes

I've had no other business dealings in the UK and made only short (2 week max) holiday visits over the years. I am therefore clearly non-resident in the UK.

I realize the USA taxes worldwide income and am aware that my US Social Security income will be reduced by virtue of my UK pension, per the WEP rules (I've studied that very long thread and don't wish to duplicate it here!).

I also understand that per the UK/USA treaty that I need to pay tax only in the USA since I am a resident there and not in the UK.

I have also found the IRS Form 8802 and the HMRC Application for relief at source.

My questions are:

* When do folks typically file the 8802? That is relative to the USA tax year and to the point at which I start to receive the pension income. Should I try to do this in advance to avoid UK withholding? Is it likely I'll be subjected to UK withholding initially and need to claim it back?

* It is necessary to file the 8802 every year?

* Assuming these steps mean I can avoid UK tax withholding, I'm still not clear on how to report (which form/line) the three categories of UK income to the IRS. i.e. State pension, annuity, occupational pension.

* Any other advice, tips and pitfalls welcome and appreciated.

lansbury

As soon as you have the details of the pension to be/being paid and the source. If you file the forms after payments start you will get the tax back.

No

On line 16 a/b of form 1040.

Read previous threads on this subject on BE

malch

Wow. Thank you for the swift and helpful reply.

One wrinkle. I will likely "turn on" the 4 small pensions at different times over the next several years. I can identify 3 of them today (Payer and reference) although the last source will involve FSAVC's that have not yet been converted to an annuity which may be more tricky.

I will plan to file the 8802 shortly before the first scheme starts payments but try to fully identify the other three even though they might not start producing income for a few years. I am hoping that once HMRC flag my NI Number with my USA residency status, I'll be free and clear of the withholding issues. Does that make sense or is there a better way to handle this?

lansbury

That worked for me. I filed the 8802 when the first pension started and the subsequent two came through tax free. I was expecting to file for each new pension, so I don't know if I lucked out or it worked as it should. If it works OK it will save paying the fee to the IRS another time. If a subsequent pension has tax deducted from it you can always file then.

malch

Perfect. Thank you very much indeed!

MidAtlantic

When I filed 8802 (which goes to the IRS here with, I think, $85!) I had a UK acknowledgement in less than a month. I have then had other pensions come on-line later and it seems, as you suggest, the record is flagged and subsequent UK coding has been correct.

MMcD

For me as well
HMRC seem to have that process working without a hitch

malch

This is all very reassuring! Thanks to all.