UK Pension taxation for US Resident
Feb 24th 2026 | 9:11 am
#122
Shocked of Redmond
Joined: Feb 2005
Posts: 3,462
From: Redmond, WA
Re: UK Pension taxation for US Resident
I managed to get confirmed using the app, thanks. The interesting thing is that there is no record of the lump sum I took. Also, there was no record of me at Equifax at any address, but I left the UK permanently in 2002.
Last edited by nettlebed; Feb 24th 2026 at 9:13 am.
Feb 24th 2026 | 2:14 pm
#123
Furby
Joined: Apr 2016
Posts: 1,188
From: St. Louis, MO.
Re: UK Pension taxation for US Resident
would dearly love some advice here - have read all the conversations and i have a few questions as it pertains to me.
Dual British/American citizen, resident in US since Sept 2017. No intentions of moving back to UK. Have a rental property in UK i pay self assessment on and UK taxes. Declare WW income on my US tax form - no problemo since i moved.
However, my father is 90 and has been settling his affairs and financials. I am only 49 so not needed to claim any of my 2 private pensions (only about 25k GBP) or my state UK pension yet, BUT there will be an inheritance left in my father's pension for me, and i'd like to get ahead of it now and get an NT tax code.
I completed P85 from HMRC when i left the UK in 2017 - they confirmed that when i called them 3 weeks ago. I am in the process of completing IRSM form 8802 to get my tax residency certificate so that i am able to send this along with HMRC Form DT-Individual. I realize it will take about 60 days for the IRS to send me the tax certificate needed, and another 4-6 months for HMRC to issue me an NT tax code.
My question that no-one can answer - including my CPA here in the US, is at 49 i don't need to draw on my pension, but realize i may have to ask for a small amount (how much is a small amount - can it literally be 100 pounds?) to trigger the NT tax code - and then what - i just confirm an NT tax code is in place until such time in a few years i need to draw on my pension or any inheritance left in the UK?
Am very confused as to the process and how i can streamline things to ensure i am able to access any inheritance left in trusts/SIPPs or pension once my father passes. i am aware that i will need to complete IRS form 8802 again for each new future tax year and declare any monies coming to me to avoid double taxation.
Can anyone help or who has gone through this? thank you so much in advance!
Dual British/American citizen, resident in US since Sept 2017. No intentions of moving back to UK. Have a rental property in UK i pay self assessment on and UK taxes. Declare WW income on my US tax form - no problemo since i moved.
However, my father is 90 and has been settling his affairs and financials. I am only 49 so not needed to claim any of my 2 private pensions (only about 25k GBP) or my state UK pension yet, BUT there will be an inheritance left in my father's pension for me, and i'd like to get ahead of it now and get an NT tax code.
I completed P85 from HMRC when i left the UK in 2017 - they confirmed that when i called them 3 weeks ago. I am in the process of completing IRSM form 8802 to get my tax residency certificate so that i am able to send this along with HMRC Form DT-Individual. I realize it will take about 60 days for the IRS to send me the tax certificate needed, and another 4-6 months for HMRC to issue me an NT tax code.
My question that no-one can answer - including my CPA here in the US, is at 49 i don't need to draw on my pension, but realize i may have to ask for a small amount (how much is a small amount - can it literally be 100 pounds?) to trigger the NT tax code - and then what - i just confirm an NT tax code is in place until such time in a few years i need to draw on my pension or any inheritance left in the UK?
Am very confused as to the process and how i can streamline things to ensure i am able to access any inheritance left in trusts/SIPPs or pension once my father passes. i am aware that i will need to complete IRS form 8802 again for each new future tax year and declare any monies coming to me to avoid double taxation.
Can anyone help or who has gone through this? thank you so much in advance!
- You need to apply for an NT code for each of your private pensions. It is not a blanket code applied to all income streams.
- As soon as you get an NT code for any one of your private pension your UK state pension will be covered.
- They will only issue an NT code to each specific pension after there has been a distribution from that specific pension. It is good indefinitely no matter how long between distributions. A £100 initial withdrawal is sufficient to start the process.. You cannot streamline the process by applying for an NT code ahead of taking a withdrawal. I think UK rules are that you have to wait until at least age 55 before making a withdrawal.
- You send IRS Form 8802 to the IRS along with the US version of HMRC Form DT 2002. it is the IRS who will send the HMRC DT 2002 form to HMRC not you. Make sure you use the US specific version of Form DT2002, using the other (generic) version will generally cause all sorts of issues and delays. HMRC will typically reject Form DT2002 if not received directly from the IRS, although someone recently reported that HMRC did accept it directly from them.
- Timelines are very random. The IRS and HMRC can each take months to work the process at each end, or it can be quite fast. There is no way to predict it. But you should inquire about status with the IRS if it has been more than 60 days since you submitted Form 8802.
- Normally a foreign inheritance is tax free from the IRS, with the exception of any inheritance contained within a trust, which almost always becomes taxable. The IRS regards a SIPP as a foreign grantor trust. Upon death of the owner it automatically becomes a foreign non grantor trust. The key difference is that if a foreign grantor trust then the trust/owner is responsible for taxes and the beneficiaries receive tax free distributions, whereas if a foreign non grantor trust then it is the opposite and the owner/trust is not subject to taxation but all distributions to US beneficiaries are taxed. Therefore any distribution from the SIPP to you will be taxable by the IRS.
- Your father’s estate will also be subject to UK inheritance task which may or may not be a problem depending upon the value of his estate.
- You will have to complete Form 3520 when you receive an inheritance from a trust which will be the case for any amount inherited from a UK SIPP. Any other inheritance that exceeds $100,000 also needs to be reported on Form 3520. You should seek professional advice when the time comes because that is not the easiest form to complete and there are stiff penalties for not doing so/getting it wrong.
