Go Back  British Expats > Living & Moving Abroad > USA
Reload this Page >

UK state pension and USA social security

UK state pension and USA social security

Old Dec 31st 2017, 2:06 pm
  #1441  
Lost in BE Cyberspace
 
Joined: Jul 2016
Posts: 5,556
morpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond repute
Default Re: UK state pension and USA social security

Originally Posted by lansbury View Post
Well catching up with voluntary contributions will not effect WEP, so it is to your advantage to maximize your pension that way.
It seem that way, and based on what I can see a very good return on investment to contribute more.

I am curious o the deferral, if one defers does that mean the weekly pension goes up forever, or just in year of deferral ?
morpeth is offline  
Old Dec 31st 2017, 2:58 pm
  #1442  
Heading for Poppyland
 
robin1234's Avatar
 
Joined: Jul 2007
Location: North Norfolk and northern New York State
Posts: 10,432
robin1234 has a reputation beyond reputerobin1234 has a reputation beyond reputerobin1234 has a reputation beyond reputerobin1234 has a reputation beyond reputerobin1234 has a reputation beyond reputerobin1234 has a reputation beyond reputerobin1234 has a reputation beyond reputerobin1234 has a reputation beyond reputerobin1234 has a reputation beyond reputerobin1234 has a reputation beyond reputerobin1234 has a reputation beyond repute
Default Re: UK state pension and USA social security

Originally Posted by morpeth View Post
It seem that way, and based on what I can see a very good return on investment to contribute more.

I am curious o the deferral, if one defers does that mean the weekly pension goes up forever, or just in year of deferral ?
Not forever, just your lifetime
robin1234 is offline  
Old Dec 31st 2017, 3:05 pm
  #1443  
Lost in BE Cyberspace
 
Joined: Jul 2016
Posts: 5,556
morpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond repute
Default Re: UK state pension and USA social security

Originally Posted by robin1234 View Post
Thanks for that link! I'll read it. In terms of state pension age, my pension age is 65 and I reached it on by birthday in August 2015. That's what I meant by grandfathering (maybe I used the term incorrectly.)

Edit; The link confirms that the pension amount will continue to increase by 1% every five weeks, or 10.4% a year, if deferred. I don't see a mention of whether there's a limit as to an upper age beyond which you can't defer...
Not sure I understand- if I defer taking the pension for two years, does that mean instead of receiving 155 a week, that I would when I take pension receive 155 + 20/8% ?
morpeth is offline  
Old Dec 31st 2017, 3:24 pm
  #1444  
BE Forum Addict
 
rebs's Avatar
 
Joined: Nov 2007
Location: Beautiful Dorset, UK
Posts: 2,163
rebs has a reputation beyond reputerebs has a reputation beyond reputerebs has a reputation beyond reputerebs has a reputation beyond reputerebs has a reputation beyond reputerebs has a reputation beyond reputerebs has a reputation beyond reputerebs has a reputation beyond reputerebs has a reputation beyond reputerebs has a reputation beyond reputerebs has a reputation beyond repute
Default Re: UK state pension and USA social security

Originally Posted by morpeth View Post
Not sure I understand- if I defer taking the pension for two years, does that mean instead of receiving 155 a week, that I would when I take pension receive 155 + 20/8% ?
If you reach state pension age after April 2016 the increase will be less than your example - check the link for details

https://www.gov.uk/deferring-state-pension/what-you-get
rebs is online now  
Old Dec 31st 2017, 3:25 pm
  #1445  
Just Joined
 
Joined: Dec 2017
Posts: 8
Alexamck is an unknown quantity at this point
Default Re: UK state pension and USA social security

Originally Posted by Nutmegger View Post
You don't indicate how many years of US SS contributions you have.
I have thirteen years of US Soc Sec contributions, making 52 quarters and therefore >40 needed.
Alexamck is offline  
Old Dec 31st 2017, 3:43 pm
  #1446  
Just Joined
 
Joined: Dec 2017
Posts: 8
Alexamck is an unknown quantity at this point
Default Re: UK state pension and USA social security

Originally Posted by rogerpenycate View Post
I have read various pension taxation threads and realize that everyone's case seems to be slightly different.I would be grateful for some help please, I’ve been goinground and round on the IRS and UK.Gov sites and still can’t find a definitive answer.
I was 66 on Sunday and last year I took a lump sum from UK STATE pension to catch me up from the 65 pension age in theUKand am now getting a full monthly pension.
It’s the only income I get from the UK.
I can’t seem to find out if I have to pay tax on that UK pension here in the US.
I’ve read about a treaty and it says that if I don’t have topay tax on any earnings in the UKI don’t have to pay tax on it here.
Apparently my yearly pension falls under the threshold of (approx)$15K/$16K for paying any tax in the UK.
My accountant who’s not used to this says I need a 1099Rfrom the UKbut because I don’t need to file taxes there I can’t get anything.
The IRS don’t take ‘international tax enquiries’ by phone.
Finally how would it be declared on my tax return,
I had no idea I had to declare pension income, either state or private and have also been receiving 2 x $600 (approx) for 14 years (since I've been here !!
Thank you to anyone who can hopefully simplify this for me.
To make things even more complicated, I was laid off inNovember and am currently fighting an unemployment claim
I think that under the US-UK treaty periodic pension payments are taxed depending on the physical presence during the calendar year of the recipient. So if you are resident in the US, you are taxable in the US ONLY on US Soc Sec payments, UK state pensions etc. I don't know how you would deal with any tax withholdings made from the UK state pension.
Alexamck is offline  
Old Dec 31st 2017, 4:14 pm
  #1447  
Just Joined
 
Joined: Dec 2017
Posts: 8
Alexamck is an unknown quantity at this point
Default Re: UK state pension and USA social security

May I please verify something?

I am 68 and deferring both US Soc Sec (for which I have >40 Qtr credits) and UK pension. The UK in event of deferral offers "extra state pension".
Alternatively, you can get the regular uninflated state pension plus a lump sum. They will even agree to pay this lump sum to you in a later tax year after the monthly payments have started (if you request it)!
I just wanted to verify whether this lump sum is taken account of in the Windfall Elimination Provisions. I think I read somewhere that it is, I just wanted to check. If so, I probably won't bother with it and will take just the enhanced monthly payments.

Many thanks
Alexamck is offline  
Old Dec 31st 2017, 7:49 pm
  #1448  
 
lansbury's Avatar
 
Joined: Apr 2005
Location: Milwaukie, Oregon
Posts: 9,387
lansbury has a reputation beyond reputelansbury has a reputation beyond reputelansbury has a reputation beyond reputelansbury has a reputation beyond reputelansbury has a reputation beyond reputelansbury has a reputation beyond reputelansbury has a reputation beyond reputelansbury has a reputation beyond reputelansbury has a reputation beyond reputelansbury has a reputation beyond reputelansbury has a reputation beyond repute
Default Re: UK state pension and USA social security

Originally Posted by Alexamck View Post
I just wanted to verify whether this lump sum is taken account of in the Windfall Elimination Provisions. I think I read somewhere that it is, I just wanted to check. If so, I probably won't bother with it and will take just the enhanced monthly payments.

Many thanks
Yes it is. One of the questions my wife was asked about her UK pensions was if she had received, or would receive any lump sums.
lansbury is offline  
Old Dec 31st 2017, 7:51 pm
  #1449  
 
lansbury's Avatar
 
Joined: Apr 2005
Location: Milwaukie, Oregon
Posts: 9,387
lansbury has a reputation beyond reputelansbury has a reputation beyond reputelansbury has a reputation beyond reputelansbury has a reputation beyond reputelansbury has a reputation beyond reputelansbury has a reputation beyond reputelansbury has a reputation beyond reputelansbury has a reputation beyond reputelansbury has a reputation beyond reputelansbury has a reputation beyond reputelansbury has a reputation beyond repute
Default Re: UK state pension and USA social security

Originally Posted by Alexamck View Post
I think that under the US-UK treaty periodic pension payments are taxed depending on the physical presence during the calendar year of the recipient. So if you are resident in the US, you are taxable in the US ONLY on US Soc Sec payments, UK state pensions etc. I don't know how you would deal with any tax withholdings made from the UK state pension.
If you are resident in the US, the UK does not withhold tax on the State Pension.
lansbury is offline  
Old Dec 31st 2017, 9:00 pm
  #1450  
Lost in BE Cyberspace
 
Joined: Jul 2016
Posts: 5,556
morpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond reputemorpeth has a reputation beyond repute
Default Re: UK state pension and USA social security

Originally Posted by lansbury View Post
If you are resident in the US, the UK does not withhold tax on the State Pension.
If one is resident in UK, is tax withheld on US social security ? On 401k withdrawals ?
morpeth is offline  
Old Dec 31st 2017, 9:27 pm
  #1451  
 
lansbury's Avatar
 
Joined: Apr 2005
Location: Milwaukie, Oregon
Posts: 9,387
lansbury has a reputation beyond reputelansbury has a reputation beyond reputelansbury has a reputation beyond reputelansbury has a reputation beyond reputelansbury has a reputation beyond reputelansbury has a reputation beyond reputelansbury has a reputation beyond reputelansbury has a reputation beyond reputelansbury has a reputation beyond reputelansbury has a reputation beyond reputelansbury has a reputation beyond repute
Default Re: UK state pension and USA social security

Originally Posted by morpeth View Post
If one is resident in UK, is tax withheld on US social security ?
No, the same rules apply under the tax treaty about where pensions are taxed either way.

On 401k withdrawals ?
Not sure, hopefully someone living in the UK in receipt of a 401k will confirm what happens with those.
lansbury is offline  
Old Dec 31st 2017, 9:43 pm
  #1452  
Just Joined
 
Joined: Dec 2017
Posts: 8
Alexamck is an unknown quantity at this point
Default Re: UK state pension and USA social security

Originally Posted by lansbury View Post
No, the same rules apply under the tax treaty about where pensions are taxed either way.



Not sure, hopefully someone living in the UK in receipt of a 401k will confirm what happens with those.
I am UK resident and have US IRA. It was originally in a 401K. I have taken distributions from the IRA several times. Since the amounts taken are not "periodic payments" (meaning that they are equal amounts spread over my estimated life-span), I have been told they are taxable in the US, not the UK. My tax adviser says that the IRS would say that, rather than being "periodic payments" they are "lump sums", hence taxable in the US, not the UK. If "periodic payments", they would be taxable in the UK under the treaty. The provider offers me a choice as to what US tax withholding (if any) I want to make. It seems there is no obligation to me to make any withholding, though that may not apply to people resident elsewhere than the UK. I have someone do me a US return at the end of the calendar year and make payment to the IRS. I imagine the same applies to a 401K.
Alexamck is offline  
Old Dec 31st 2017, 10:23 pm
  #1453  
BE Forum Addict
 
Joined: Aug 2013
Location: Eee Bah Gum
Posts: 2,367
durham_lad has a reputation beyond reputedurham_lad has a reputation beyond reputedurham_lad has a reputation beyond reputedurham_lad has a reputation beyond reputedurham_lad has a reputation beyond reputedurham_lad has a reputation beyond reputedurham_lad has a reputation beyond reputedurham_lad has a reputation beyond reputedurham_lad has a reputation beyond reputedurham_lad has a reputation beyond reputedurham_lad has a reputation beyond repute
Default Re: UK state pension and USA social security

Originally Posted by Alexamck View Post
I am UK resident and have US IRA. It was originally in a 401K. I have taken distributions from the IRA several times. Since the amounts taken are not "periodic payments" (meaning that they are equal amounts spread over my estimated life-span), I have been told they are taxable in the US, not the UK. My tax adviser says that the IRS would say that, rather than being "periodic payments" they are "lump sums", hence taxable in the US, not the UK. If "periodic payments", they would be taxable in the UK under the treaty. The provider offers me a choice as to what US tax withholding (if any) I want to make. It seems there is no obligation to me to make any withholding, though that may not apply to people resident elsewhere than the UK. I have someone do me a US return at the end of the calendar year and make payment to the IRS. I imagine the same applies to a 401K.
I am in a similar position, dual UK/US citizen living in UK. My IRA is with Vanguard and Vanguard had me complete and send in a W9 so that they do not automatically withhold US taxes when I make withdrawals. I have made a lump sum withdrawal from my IRA, converting it to my Roth IRA and only US taxes are due.
durham_lad is offline  
Old Jan 1st 2018, 7:10 am
  #1454  
Just Joined
 
Joined: Dec 2017
Posts: 8
Alexamck is an unknown quantity at this point
Default Re: UK state pension and USA social security

Originally Posted by durham_lad View Post
I am in a similar position, dual UK/US citizen living in UK. My IRA is with Vanguard and Vanguard had me complete and send in a W9 so that they do not automatically withhold US taxes when I make withdrawals. I have made a lump sum withdrawal from my IRA, converting it to my Roth IRA and only US taxes are due.
An important omission on my part: since I am UK resident and to avoid withholding in US, I have had to complete an IRS W-8BEN form. This lasts for several years.

Foreign persons are subject to U.S. tax at a 30% rate on income they receive from U.S. sources. The Form W-8BEN is used to claim an exemption (or lower withholding amount) if there is an Income Tax Treaty negotiated with the US and another country (which is the case with the UK). You have to declare your UK tax ID (being your National Insurance #).

I don't know about the W9 - that seems to have something to do with businesses (??).
Alexamck is offline  
Old Jan 1st 2018, 8:44 am
  #1455  
BE Forum Addict
 
Joined: Aug 2013
Location: Eee Bah Gum
Posts: 2,367
durham_lad has a reputation beyond reputedurham_lad has a reputation beyond reputedurham_lad has a reputation beyond reputedurham_lad has a reputation beyond reputedurham_lad has a reputation beyond reputedurham_lad has a reputation beyond reputedurham_lad has a reputation beyond reputedurham_lad has a reputation beyond reputedurham_lad has a reputation beyond reputedurham_lad has a reputation beyond reputedurham_lad has a reputation beyond repute
Default Re: UK state pension and USA social security

Originally Posted by Alexamck View Post
An important omission on my part: since I am UK resident and to avoid withholding in US, I have had to complete an IRS W-8BEN form. This lasts for several years.

Foreign persons are subject to U.S. tax at a 30% rate on income they receive from U.S. sources. The Form W-8BEN is used to claim an exemption (or lower withholding amount) if there is an Income Tax Treaty negotiated with the US and another country (which is the case with the UK). You have to declare your UK tax ID (being your National Insurance #).

I don't know about the W9 - that seems to have something to do with businesses (??).
The W9 is for US Citizens resident abroad. Our bank in the UK also had us complete a W9 since they are FATCA compliant reporting on their US citizen customers. The W9 gives the business permission to contact the IRS and validate the details of a US person’s tax id (social security number in the case of individuals)

For us USCs our foreign pensions are fully taxed by the IRS which for my wife and I means our 2 UK private pensions and our OAP.
durham_lad is offline  

Contact Us - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service - Do Not Sell My Personal Information

Copyright © 2018 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.