Tax information?
So i filed my P85 ( i didn't wait untill i was working as i dont plan on making any NIC payments) i did say that on the p85 when asked roughly how long you would spend in the uk over the span of 3 years i put 10 on the 3rd tax year. Im trying to get my head around this UK non resident/resident tax stuff and i can't quite get it. Will i still need to pay UK tax when i receive my EAD and can finally work? If so, is this expensive as i would be paying US and UK tax and do i need to set it up in some way? Can some one give me a few brief explanations... it would be much appreciated!
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Re: Tax information?
No, you will not pay UK taxes. The UK does not even attempt to tax its citizens when they live outside the UK.
I see that you have dismissed the possibility of making NIC contributions. Unless you have "private means" and are confident of retiring wealthy, or so poor you can't afford a few hundred dollars a years, continuing to contribute is one of the cheapest and lowest risk ways of increasing your income in retirement. :nod: |
Re: Tax information?
Originally Posted by LauraLou07
(Post 11832739)
So i filed my P85 ( i didn't wait untill i was working as i dont plan on making any NIC payments) i did say that on the p85 when asked roughly how long you would spend in the uk over the span of 3 years i put 10 on the 3rd tax year. Im trying to get my head around this UK non resident/resident tax stuff and i can't quite get it. Will i still need to pay UK tax when i receive my EAD and can finally work? If so, is this expensive as i would be paying US and UK tax and do i need to set it up in some way? Can some one give me a few brief explanations... it would be much appreciated!
you on UK source income, but there are tax treaties and rules in place so that you can use the tax on that income you might have to pay where you live to offset any UK tax bill.....you won't be taxed twice. I'd advise you to reconsider not paying voluntary NICs while you are out of the UK. |
Re: Tax information?
Originally Posted by Pulaski
(Post 11832743)
I see that you have dismissed the possibility of making NIC contributions. Unless you have "private means" and are confident of retiring wealthy, or so poor you can't afford a few hundred dollars a years, continuing to contribute is one of the cheapest and lowest risk ways of increasing your income in retirement. :nod:
When you analyze these government plans you find they couldn't possibly function without government force because they are re-distributive. While I haven't looked at the UK plans I see this in spades with bend points, WEP, GPO and taxation of social security in the US system. So in almost 20 years I haven't given anything to the UK government voluntarily. Likewise I wouldn't make such payments to the US government if available. Convince me I should do otherwise. |
Re: Tax information?
Originally Posted by Neillc37
(Post 11833303)
My view is that governments are corrupt. They can turn on me at any time and take stuff like government pensions. This is especially true if you are in the set of people who they always discriminate against (the rich). ....
When you analyze these government plans you find they couldn't possibly function without government force because they are re-distributive. While I haven't looked at the UK plans I see this in spades with bend points, WEP, GPO and taxation of social security in the US system. So in almost 20 years I haven't given anything to the UK government voluntarily. Likewise I wouldn't make such payments to the US government if available. Convince me I should do otherwise. If you don't want to invest for your retirement that is a free choice. There are other investment opportunities available, but all investments have risks. I am one of those people who believe the risk of investing in a British state pension is lower than in other competing investments. I recognize that if my career progresses, and my private business thrives, and the British government makes the state penion means-tested, then I might get a reduced, or no, state pension. In the event that I get nothing because I have substantial investments and other income streams I won't care about the very modest amounts I contributed to the British NI fund. On the other hand if for any reason I retire poor, with few assets and little other income, then I will be very glad that I have my British state pension. But that's just me. :) |
Re: Tax information?
Originally Posted by Neillc37
(Post 11833303)
This is especially true if you are in the set of people who they always discriminate against (the rich).
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Re: Tax information?
Originally Posted by Owen778
(Post 11833311)
It seems you live in a different USA to the rest of us. Either that or you have much greater misunderstandings than not wanting to pay UK NICs.
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Re: Tax information?
Originally Posted by Pulaski
(Post 11833306)
Convince me I should do otherwise.
Originally Posted by Pulaski
(Post 11833306)
If you don't want to invest for your retirement that is a free choice.
Originally Posted by Pulaski
(Post 11833306)
In the event that I get nothing because I have substantial investments and other income streams I won't care about the very modest amounts I contributed to the British NI fund. On the other hand if for any reason I retire poor, with few assets and little other income, then I will be very glad that I have my British state pension. But that's just me. :)
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Re: Tax information?
Originally Posted by Owen778
(Post 11833311)
It seems you live in a different USA to the rest of us. Either that or you have much greater misunderstandings than not wanting to pay UK NICs.
I know the low end doesn't pay anything. I'll convert a bunch of money to Roth in 2016 at a tax rate of 0%. I quite working to escape the penalties. |
Re: Tax information?
Originally Posted by Neillc37
(Post 11833330)
..... I am quite happy to have paid into pensions in the UK and 401k, IRA, Roth, HSA and taxable accounts in the US. ....
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Re: Tax information?
Originally Posted by Pulaski
(Post 11833337)
I do all of that too, but you (and others reading this thread) should look into portfolio theory and risk diversification. I would not recommend putting all your eggs in one basket, but putting a little in British NICs provides additional diversification (and is a great step if you are trueky poor, with no other investments) and is an investment that has almost zero correlation with "the market".
I already have a big bucket in the US SS system that's forced. I have a small bucket in the UK system that was forced. I would caution against 'investing' in either SS or the UK system. When analyzed in detail SS is a very poor investment. It's essentially an investment in TIPS with longevity layered on top. Read Jeremy Siegel's recent article on the subject. I expect the UK system is bad as well but I don't know. |
Re: Tax information?
Pulaski, a few months ago I said on here about contributing payments still but people said to hold off and wait for some changes that may or may not be occurring. Have those changes happened? As contributing was something I was very interested in, how do I go about it? Sorry if it's been covered a million times but while the subject has come up I was just curious.
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Re: Tax information?
Whatever your thoughts about the viability of various social security schemes anyone that qualifies to pay voluntary Class 2 NICs is missing a fantastic deal, that just got better with the new UK flat rate pension. Right now Class 2 NICs are 145 GBP a year so even if you are dubious about what you might get the cost is so low you'd be foolish not to take advantage. Also there are no WEP issues for voluntary NIC payments.
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Re: Tax information?
Originally Posted by andrewlohnes
(Post 11833457)
Pulaski, a few months ago I said on here about contributing payments still but people said to hold off and wait for some changes that may or may not be occurring. Have those changes happened? As contributing was something I was very interested in, how do I go about it? Sorry if it's been covered a million times but while the subject has come up I was just curious.
That give you all the information you need and an application form. I'd apply asap. |
Re: Tax information?
Thank you nun! I shall get on the case tomorrow evening :)
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