US Pension

US Pension

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A client who is not domiciled receives a Social Security pension in the US. The money is not remitted to the UK. We have been advised that from Jany 2005 this should be reported on the UK Tax Return even if it is not remitted.
Is this Right?
Angel

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By k40911
06th Jul 2006 11:44

I am dubious about the changes...
I assume that when you say "not domiciled", you mean not domiciled within the United Kingdom.

If this is the case, then US social security income that is not remitted to the UK is taxable only in the United States (in the US only up to 85 per cent is taxable under domestic American rules).

If the income is remitted to the UK then the income would become exempt from US tax under the provisions of the US/UK double tax treaty. However the 10 per cent deduction for foreign pensions does not apply to those who are chargeable on the remittance basis.

The only change in reporting I am aware of follows the Barclays Special Commissioners case. Some advisers are taking the view that now that HMRC are seeking similar disclosure from all offshore banks that disclosure of non-remitted non-UK income in the white space may reduce enquiries.

Other contributors to this forum may be able to shed more light on this.

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By AnonymousUser
05th Jul 2006 16:09

US Pension
I always was under the assumption that a UK resident (but non-UK domicile) was only subject to UK tax on foreign income remitted into the UK.

However, "reporting" this income might be a separate matter.

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