paulward50

Hi,

I'm after any advice anybody can give me. I am a UK citizen married to a US citizen and currently living in the UK. We intend to move to Tampa, Fl around Dec this year and I have started the visa process. My question is that after 22 years service in the British Army, I will be getting a monthly pension. I would like to know where would be the best place to have it paid into? My UK or a US account. I have researched and had pro's and con's for both. Any advice from previous experience would be most grateful. Thank you.

Zonie

I still have my RAF pension paid into my UK Nationwide International bank account (Isle of Man) mainly because that gives me more control over the exchange rate. I wait until it is in my favour then convert it to $. Additionally the interest rate for a savings account is historically higher in the UK than the US. The interest is tax free and you pay tax on it in the US.

However, if you need the money every month to live on, Xafinity Paymaster will convert it and put it into a US account. They will however take their cut in the form of a fee or a lousy exchange rate.

Worth joining the Forces Pension Society as they have lots of good advice and many members who are expats. £30 a year membership.

http://www.forpen.org/

I recommend you maintain a high street UK bank account whilst in the US, it's easily done.

paulward50

Zonie,

Thank you for some great advice.

Bob

Worth having a search on BE as a few people have done similar things.

I think places like hifx/xe.com will negotiate a annual rate deal for regular transfers rather than relying on the spot rate.

penguinsix

Regardless of what you choose, be sure to keep the UK account even if you only have £1 in it. Reopening a UK account once you are here (should you have a need) is a real pain in the butt. Best to keep it 'live' even if you don't end up using it daily.

Peter Newton

From a tax perspective, assuming you become resident in the US, it won't matter whether your pension is paid into a UK or a US account- the tax treatment will be the same.

JJ_Jones

Hi Zonie or Peter

Can you PM me your email or contact details. I am retired from the RAF and also get a pension. I moved here (Florida) last year on marriage. Started work (legally) and need some advice on my first tax return.

Thanks in advance, JJ

ian-mstm

Why not just post your questions? Then everyone in the forum will get help. If you really want private and personal assistance, hire someone.

Ian

JJ_Jones

Thanks for being uderstanding to a newbie to forums like this and making me feel welcome.....

I have hired someone, but they do not receive a UK Military pension, so I just needed to confirm something with someone in the same position as I am.

If I have anything new that is not in the forums, then I would post it to help others.

Bob

You won't be able to receive PM's anyway, have to make at least 3 posts....so you might as well introduce yourself

Zonie

Another one bites the dust?

im9907620

Whichever way you look at it there is the usual exchange rate issue. Whether your pension payroll is set up to convert to dollars and pay a US account is debateable, but on balance you would be better keeping a UK account and having it paid into there. Its easier to keep a UK account open than to close/re-open one once you have left and are US resident.

JJ_Jones

I left military Apr 08 after 25 years service, so receive a pension. I worked in UK from Jan 1st to Apr 24th 09. I arrived Tampa, USA in Apr 09, married in May 09, received Green Card and started working in Aug 09. So I have 3 incomes for tax purposes for 2009.

I am not sure what I have to pay tax on in the USA yet as there is a UK/USA double taxation agreement. I have paid UK Tax on pension and UK employment.

I did find out that you HAVE to pay tax on military pension as long as you stay a British citizen, regardless of where you reside. If you become a US citizen, then you can opt not to pay UK tax on the pension. I am able to claim the tax I paid back for my time as an employee in the UK for 09 though.

Could anyone tell me whether I have to pay more tax on my pension in the USA or will receive tax credits on it as I have paid UK Tax?

I am going to keep my pension in my UK bank account and play the exchange rate game to see if I can make some extra cash.

Zonie

Hi JJ, welcome back.

Seems like you've got a lot of it sorted already. Your military pension, classed as a government service pension, has to have tax deducted in the UK. Remember you are stll entitled to UK tax allowances on it. You don't declare it on your US tax return unless you become a US citizen.

See this link http://www.hmrc.gov.uk/cnr/faq4.htm

The US are not concerned about any of your income until the day you became an immigrant. Your 2009 US tax return will be a "Dual Status" return.

See the IRS website http://www.irs.gov/businesses/small/...=96433,00.html

JJ_Jones

Thanks for this great information. If I am correct then, I am a resident alien from the time I got the Green Card.

Prior to that time, I have to determine if I am a classed as a resident alien by doing the Green Card Test or Substantial Presence Test!