tomwilley

Hi Guys,
I moved to the USA from the UK back in 89 and am now a dual citizen.

I'm now at the point of pulling my trigger on my UK private pension. From what I understand, the UK pension will be taxed at source by HMRC under and emergency tax code. Where I want to get to to is not to be taxed at all by the UK and only be taxed by the IRS.

Can someone help me understand or point me to the process and what forms I need to fill in for both the IRS and the HMRC?

Thanks,
Tom

MidAtlantic

You need to complete US Individual Form 2002. You send this to the IRS (as per the instructions) to confirm that you are tax resident in the US and they send it on to HMRC. https://www.gov.uk/government/public...ndividual-2002

This worked fine for me a few years ago. I received my first couple of months with UK tax deducted then the paperwork caught up and I was given a UK "NT" code and the tax already paid was refunded.

However, others more recently have had trouble with this not working.

tomwilley

Thank you.

durham_lad

This worked fine for me also.

SanDiegogirl

Did not work for me.... sent this form 3 times to the IRS and the IRS sent the necessary 6166 Certificate to prove my US residency to HMRC and I'm still getting taxed on my State and now on my private pension.
Even sent in form P85 and still no luck.

I'm thinking of just claiming back the tax when I do my US taxes.

durham_lad

What an absolute pain!!

You could try claiming the tax back on your US return but the tax treaty does not give this exception so you may be audited by the IRS. HMRC should not be taxing your pensions if you are non-resident. To get the tax back you should really file a self assessment return with HMRC or contact them and get it sorted with them.

TerryGoX

I am in a similar position. I plan to pull a small amount from a SIPP (1000 sterling) that should trigger a UK tax payment from which I can apply for the NT status. I have money in AJBell and they are being quite difficult about this - the customer service in the benefits is really quite disorganized. They would prefer me to take the money tax free (as part of the 25% allowance) but that doesn't help me in the long term goal of getting an NT status. I don't know how hard it is to get the NT status and claiming back the tax from this trial amount.. They want me to sign a document that is quite foreboding - anyone had any experience?



Pension Commencement Lump Sum Waiver Declaration
I understand I have waived my rights to receive a Pension Commencement Lump Sum of Tax
free cash amount in relation to the funds being crystallised under my above SIPP, valued at
Crystallisation amount on BCE Date.
Following the crystallisation of the funds, I understand my ability to receive a Pension
Commencement Lump Sum in respect of the crystallised funds will have been lost and that at
no stage in the future can this be paid from my crystallised funds held within my SIPP.
I confirm I have not been recommended to waive my rights by, or received any advice in
relation to those rights from, a representative of AJ Bell Management Limited, Sippdeal
Trustees Limited or AJ Bell Youinvest.

retman

There are various options to withdraw from a SIPP on AJ Bell. You can withdraw using UFPLS; 25% will be tax free and 75% liable for UK tax. So a withdrawal of GBP 1,000 does not affect any other funds remaining in your SIPP with regard to PCLS tax free amount. You can make withdrawals as often as you want, online, no interaction with customer service required. it takes about 10 days from the initial online request for the withdrawal to arrive in your US bank account. Also note that GBP 750 taxable amount may not trigger any UK tax withholding, it depends on your current UK tax code. If you are assigned an emergency tax code 1250L M1 ( GBP 12,570 personal allowance on a month one basis ie: GBP 1,048 per month ). GBP 750 taxable amount being lower than the per month emergency tax allowance, is insufficient to trigger any UK tax.

TerryGoX

I don't have a UK tax code and haven't since 1990 so I want to start the process of getting NT - taking a tax free amount does nt start the process and I am dealing with customer service to help me understand what would/would nit trigger the first step. As you said an amount too small would not necessarily drive tax but in fact I think AJBELL takes out tax for all transactions

retman

AJ Bell will only take out tax dependent on what tax code HMRC assigns when you request a withdrawal. Likely it would be emergency tax code 1250 L M1.

TerryGoX

That's correct which is why I want to use a small amount so I can start the process to get a NT status for future withdrawals.

retman

So if you are assigned an initial emergency tax code, you would have to withdraw an amount exceeding GBP 1,048 equates to 75% of the total amount withdrawn from your SIPP. This would then likely trigger UK tax to be withheld. Then you could start the process to claim back the UK tax taken at source and request a NT CODE. The process typically takes 4 months give or take.

TerryGoX

That's very helpful, this is the question I have asked AJBell for 3 months now without a clear answer. They keep telling me to take it tax free as part of the 25% but that doesn't solve my long term issue

retman

You will receive an online pension payslip when your withdrawal request has been processed. It will state your tax code.

TerryGoX

so, when I contact the HMRC, is this a central office or do I need a tax office that handles my individual case and if so how do I find that. I have a P85 from the IRS that states I am US resident, I assume I will need to send that to HMRC but suspect many things get lost in the mail