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Is a british pension taxable in the USA?

 
 
Ian
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      11-07-2003, 10:14 AM

The Subject line says it all, but here's more detail:

I'm a Permanent Resident Alien (I hope to get citizenship next June)
married to an American and have lived here for five years.

Now, In three months time I become eligible for the UK Old Age Pension
It's a State benefit paid to almost everyone and I'm almost certain
it isn't taxable when paid to a
claimant resident in Britain.
I plan to have it paid directly into my bank here, at three-monthly
periods. I don't know yet the exact sum I'll receive. Probably in
the region of 120 dollars per week minimum.

Our accountant didn't know if this will be
liable to Federal tax as income, and a phone inquiry to the income
tax people only resulted in a vague promise to call back with an answer.

The wife says if I have it paid into my Lloyd's Bank account in
England, we'll still be liable for tax on it. Surely this can't be
right?
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Ian Ft Worth, TX, USA
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iTaxCPA
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      11-07-2003, 12:58 PM
US-UK double tax treaty says that ONLY the USA may tax your govt pension
(not the UK) - this is assuming you are resident for tax purposes in US not
UK.

The US wants to tax it as ordinary income on your 1040. It may qualify for
foreign tax relief if you pay tax on other income in the same separate
limitation (on Form 1116).

"Ian" <(E-Mail Removed)> wrote in message
news:(E-Mail Removed)...
>
> The Subject line says it all, but here's more detail:
>
> I'm a Permanent Resident Alien (I hope to get citizenship next June)
> married to an American and have lived here for five years.
>
> Now, In three months time I become eligible for the UK Old Age Pension
> It's a State benefit paid to almost everyone and I'm almost certain
> it isn't taxable when paid to a
> claimant resident in Britain.
> I plan to have it paid directly into my bank here, at three-monthly
> periods. I don't know yet the exact sum I'll receive. Probably in
> the region of 120 dollars per week minimum.
>
> Our accountant didn't know if this will be
> liable to Federal tax as income, and a phone inquiry to the income
> tax people only resulted in a vague promise to call back with an answer.
>
> The wife says if I have it paid into my Lloyd's Bank account in
> England, we'll still be liable for tax on it. Surely this can't be
> right?
> --
> Ian Ft Worth,

TX, USA
> change m to r to Reply by email



 
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Arthur L. Rubin
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      11-07-2003, 10:10 PM
Ian wrote:

> The Subject line says it all, but here's more detail:
>
> I'm a Permanent Resident Alien (I hope to get citizenship next June)
> married to an American and have lived here for five years.
>
> Now, In three months time I become eligible for the UK Old Age Pension
> It's a State benefit paid to almost everyone and I'm almost certain
> it isn't taxable when paid to a
> claimant resident in Britain.
> I plan to have it paid directly into my bank here, at three-monthly
> periods. I don't know yet the exact sum I'll receive. Probably in
> the region of 120 dollars per week minimum.
>
> Our accountant didn't know if this will be
> liable to Federal tax as income, and a phone inquiry to the income
> tax people only resulted in a vague promise to call back with an answer.


Check the US-UK tax treaty. _I_ haven't, but the Canadian
Old Age Pension is taxed (for Federal income tax purposes) as
if it were US Social Security income. State income tax may
differ.

 
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Ian
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      11-08-2003, 08:53 PM
(E-Mail Removed) wrote:

> US-UK double tax treaty says that ONLY the USA may tax your govt pension
> (not the UK) - this is assuming you are resident for tax purposes in US not
> UK.
>
> The US wants to tax it as ordinary income on your 1040. It may qualify for
> foreign tax relief if you pay tax on other income in the same separate
> limitation (on Form 1116).
>

OK, thanks: not the answer I wanted to hear, but I won't shoot the
messenger!

--
Ian Ft Worth, TX, USA
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Ian
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      11-08-2003, 08:53 PM
(E-Mail Removed) wrote:

> Ian wrote:
>
> > The Subject line says it all, but here's more detail:
> >

>
> Check the US-UK tax treaty. _I_ haven't, but the Canadian
> Old Age Pension is taxed (for Federal income tax purposes) as
> if it were US Social Security income. State income tax may
> differ.
>

Seems I'm liable to pay on it. One slight consolation, though:
Texas doesn't (yet) have a tax on income.
Thanks,
--
Ian Ft Worth, TX, USA
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