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Where Taxpayers and Advisers Meet

UK taxation of USA pensions

Posts: 35
Joined: Wed Aug 06, 2008 3:42 pm

UK taxation of USA pensions

Postby taxbill » Tue Aug 13, 2019 11:54 am

My client has heard that her 2 USA pensions are not subject to tax in the UK per a treaty agreement.
Is she correct.
She is UK resident.
Many thanks to anyone who replies.

Posts: 1056
Joined: Fri May 16, 2014 3:47 pm

Re: UK taxation of USA pensions

Postby AGoodman » Tue Aug 13, 2019 6:18 pm

Art 17(1) suggests otherwise but there are caveats

Posts: 226
Joined: Thu Aug 16, 2012 4:31 pm

Re: UK taxation of USA pensions

Postby DavidTreitel » Tue Aug 13, 2019 8:08 pm

It is rare, very rare, for US pension income to be completely exempt from UK tax. Generally speaking the UK has the primary taxing right.

1.What is your UK client's domicile status?
2. If domiciled outside the UK is the client electing to claim the remittance basis?
3. Are these pensions government pensions or non-government?
4. Is the client a US citizen or green card holder?
5. Are these based on the client's own contributions or are these inherited?

A great deal more information is required to answer this fully.

Posts: 309
Joined: Wed Feb 08, 2017 2:33 pm

Re: UK taxation of USA pensions

Postby AnthonyR » Tue Aug 20, 2019 10:44 am

As mentioned above, most US pensions are taxable in UK in the hands of UK residents.

In my experience you can deal with these relatively painlessly under the worldwide disclosure facility, but if the client doesn't disclose HMRC will likely discover it sooner or later which makes the penalty position far worse.

It's also worth noting that up until 6 April 2017 foreign pensions benefited from a 10% disregard, meaning that you only tax 90%.
Anthony Rogers LLB CTA TEP
Fusion Partners LLP

Posts: 2
Joined: Fri Jun 22, 2018 1:02 am

Re: UK taxation of USA pensions

Postby aorobert » Wed Sep 04, 2019 10:58 pm

I need to follow this thread. The treaty is hard to follow with so many exemptions.

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