livinginUSA

Hey all!

I was just discussing the complexities of global taxation with my US friend. I was claiming that the UK bases tax off of residency and they claimed to refute that based on student loans. I was confused, but he linked me to this quote (from wikipedia mind...):

This confused the hell out of me for some reason. I have been filling out my overseas assessment form and paying back my student loan to the UK from the US for the past 8 years or so and have never once thought of it as a tax - mainly I guess because I pay it directly to "The Student Loans Company" and never thought of dealing with HMRC.

Or have I been doing this wrong? Would this mean I should be filing self assessment forms for UK tax even though I have no UK income?

Maste

From what I know and understand, it isn't classed as a tax (I could be wrong, but this my understanding), but a debt (albeit not a true one). You pay it back via the earnings threshold for whichever country you're in.

Student Loan Repayment - Plan 1 - Overseas thresholds

That's for Plan 1, Plan 2 is on there too.

I'd go with the information you find on the official student loans website, so take a look around on that.

livinginUSA

Thanks! Yeah, I did take a look around there (plus finding out I only have 7 months of payments left!) and couldn't find the word "tax" anywhere.

I just want to make sure I don't need to be filing any self assessment tax forms in the UK (No income there - just student loan payments being made) and when someone said "global tax for UK student loans" it made me a bit anxious that I was missing something haha.

Personal question - have you had to deal with UK student loans while living overseas?

Pulaski

If it's a tax it begs the question as to whether you can claim a credit for it on your US taxes. .... I believe that the answer would be no, but I might be wrong.

livinginUSA

I have been asking that for years! Most tell me I can't. It seems to be in the wording of "qualified"

I don't see a reason why I would have to file UK self assessment tax forms still

Maste

You said it yourself there. It's called a 'Loan Repayment' and that's what you're doing. Paying back your loan via a % of your income once you earn a certain amount.

I do have a student loan - but not had any dealings with them whilst overseas as I'm not living abroad. Should I be doing so in the future for any reason, I know what I need to.

livinginUSA

Makes sense! Not sure why I thought I'd have to do self assessment taxes as this is not income.

I think sometimes I worry I missed something obvious when I moved away from the UK haha - especially when I learnt that US citizens file US taxes no matter where they live. I worried for a while the UK had the same thing, but thankfully it's based on residency

Maste

Well all SLC care about is the fact you're one of a small % of past students who now live abroad but actually pay. I read that a lot of students move abroad for work and don't check how to repay.