lyndilou

Can anyone advise us regarding the taxation of private pensions we are claiming if we live in USA. Will we still pay tax as the pensions are paid by British companies.. Can anyone recommend an off shore adviser?

farmerwife

As an LPR you would be subject to the same IRS rules as a USC - taxed on your world wide income. However, depends on what your income is - it maybe below taxable levels. The USA and UK have a tax treaty though so you wouldn't be taxed twice.

Sentosa

There is a tax treaty between the U.S and the U.K so you can choose who you pay tax to. We pay the U.S tax on our private pension and save almost $3000 per year. It is a bit of a pain setting it up and every year we have to fill in a form and send it to the IRS the fee for that is $35.Go to the IRS web site there is a lot of info there. We called them and they are very helpful and helped us with the filling out of forms. The U.K tax office was also very helpful when we called them.

JAJ

Normally you don't get to "choose" but you can usually offset one against the other.

Sentosa

Usually when you get a private pension from the U.K tax will automatically be taken by the U.K.
However you do have the choice to inform the U.K Tax and the IRS that you want to change that.Then every year in November you fill out a 8802 form and pay your $35 for the privilege of paying U.S tax. Initially it takes a bit of setting up and form filling but well worth it when we save so much.

JAJ

If you are a U.S. citizen or resident I don't see how you can have any "choice" about paying U.S. tax.

Have you got a particular clause of the Double Tax Treaty in mind?