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    Thread: Taxes and pensions overseas - good info


    1. #1

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      Aldo is a Dil
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      Taxes and pensions overseas - good info

      Quote Originally Posted by Florida Redhead View Post
      We are approaching retirement, although I can still keep my self-employed status as I am a one-woman business with two angles - Notary Public, and Housing Damage Inspector during disasters.

      We are lucky as we both have dual US/UK Citizenship. I also have Irish Citizenship.

      I recently claimed my Pension from the UK, it is reduced because I did not pay full stamp all the time.
      However, I was told by a US Social Security Official that my US Pension will be reduced because I'm receiving a UK Pension.
      It will also be taxed as part of my "Worldwide income".
      He stated very firmly that if I tried to hide income, the IRS would find out and the penalty is jail.
      I don't mind paying my fair share of tax, but I think this is unfair and outrageous.
      I worked 26 years in the UK, paid my taxes and Insurance, paid full stamp for 20 years, and self-employed for another 6.
      I have worked in the US for 17 years, paid tax, Social Security, Medicare etc. My husband served 22 years in the US Navy and has worked 26 years since then. And yet we're going to be taxed to the hilt on our retirement!
      Maybe we should have sat on our backsides and lived on welfare......

      On the IRS site it states all US Citizens and also resident aliens MUST report all worldwide income to the IRS.
      The US has a Tax Treaty with the UK and most other Countries, which includes mutual reporting of all income.
      When Clinton signed the Treaty, he said the purpose was to protect Citizens from paying dual tax......that's a bunch of hogwash! It's a way of spying on each others' citizens.....making sure they get every drop of blood.

      .
      Bump.
      I appreciate this is an old post.
      FR, you have to pay into the UK N.I. for 45 years to obtain a full UK pension.
      20 years is less than half so yours is fairly reduced unless you took the opportunity to pay in lump sums at intervals to build it up.

      You don't pay tax at both ends, if indeed you pay tax on an Old Age Pension in the UK.
      Additionally, if you did pay tax, you only pay tax on income in the UK that exceeds your personal tax allowance.

      I have several friends who live abroad and have UK work pensions and don't pay any tax in the UK because of the dual tax agreements that exist.
      If you are in receipt of an income in the UK that is taxable, which is transferred abroad, you simply advise the UK Tax department that you pay tax on that income in your domicile country.
      You then do not pay tax in the U.K.
      Most of my friends however let their pension build up and transfer bi-annualy.
      Last edited by purple; 19-09-2010 at 01:08 PM. Reason: Correcting T's spelling in accordance with his wishes ;)
      purple likes this.

    2. Moneycorp - Commercial foreign exchange since 1979
    3. #2
      purple
      Good post and information, Tony. :)

      I've moved it to a more relevant section, and renamed the thread to make it more obvious to people, hope you didn't mind.

      Thanks for bumping it and clearing up the misconceptions that were in the original message.
      Last edited by purple; 21-08-2010 at 03:27 PM.

    4. #3

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      Aldo is a Dil
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      No probs purp, i meant domicile by the way :)

    5. #4
      purple
      Quote Originally Posted by thearmchairdetective View Post
      No probs purp, i meant domicile by the way :)
      That's what it says, doesn't it? ;)

    6. #5

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      What can I say. I must be brilliant :)

    7. #6
      purple
      Oh come on Tony, that goes without saying. ;D

    8. #7
      The itinerant
      Voluntary National Insurance Contributions - The Pensions Advisory Service (TPAS)

      This link says that qualifying years for FULL basic state pension are 30, not 45. A useful link anyway...

    9. #8
      purple
      The same information is available on the official site from the HM Revenue and Customs. The site you listed is not an official site, just a pensions advisor.
      The free part they mention may not be for much except a phone call to ask a question. The object is likely to get you to contact them so they can sell services to you.

      I would suggest that anyone in doubt would probably be better off searching this site HM Revenue & Customs: Do you need to top up your National Insurance contributions?
      which is actually an official government site that's not trying to sell anything.
      Last edited by purple; 11-10-2010 at 01:10 PM.

    10. #9
      toxan
      If you retire in Cyprus and have a pension from overseas, you receive it gross, and you pay just 5%, after an allowance of €3420.00
      Ktee likes this.