Completion of Form US Individual

I moved to the USA 15 years ago and an hold dual British and American citizenship. Over my working career in the UK, I was in 3 company pension schemes, through difference pension companies ( Aviva, Zurich and Aegon). I am now looking to retire at 58, starting in 2024 to take the 25% tax free lump sums ( one pension scheme per year), and then take either drawdown or annuity payments. I will also be entitles to a UK state pension in 2032. I want to pay tax only in the USA, so I have been advised by my USA Accountant to complete the HMRC Form US Individual, so that when I start the above pensions, no tax is taken in the UK. When I took at the HMRC US Individual form, section C2 requests that due dates be provided on payable income. Can I enter dates into the future for when income starts from my UK company pension schemes, and how accurate does the due date have to be? If I cannot, what process should I use to ensure no tax is taken out, when I start taking the 25% tax free lump sums,then the annuity or dropdown on the UK pensions UK state pension and I have?

Hi

After you have commence to receive the pension(s), you will need to download and print off and complete the DT individual UK / USA form at Double Taxation: UK-USA (SI 2002 number 2848) (form US-Individual 2002).  
On the form you must declare all the pensions including state pension.  The completing and signed form will need to be sent to the IRS, for a fee.  
You will need to find that address to send it to.  The IRS will validate the form and send it directly to HMRC.  
With the validated form, HMRC can ensure that no tax is deducted and have any tax deducted, refunded to you.  
If you have not commenced receipt of the pension, you cannot put it on the form.  
You may have to complete this form more than once, if your pensions commence at different times.

Thank you

Referencing the above, if I only take the 25% tax free lump sums from my UK pensions now, and delay taking the other 75% of the pension pot until I am 65. Do I need to complete the form US-individual 2002 when the 25% tax free lump sums are received,, or can I wait until I am 65 to complete the US-individual 2002 , when I start taking taxable income from the 75% of my pension pots that are taxable to ensure income tax is paid in the USA only?

Hi David Allton,
If your pension provider deducts tax from your pension lump sum, you will need to complete the DT individual.
Please see guidance here:
Double Taxation: UK-USA (SI 2002 number 2848) (form US-Individual 2002)
Thank you. 
 

In 2024 I will complete the US-individual 2002 form section C2 with the details requested of the first UK pension scheme , I have started to take pension income from, Then, submit the completed US-individual 2002 form to the IRS and it will be received by HMRC. Then in 2025, I will complete a second US-individual 2002 form for the second UK pension scheme, I have started to receive income from in 2025, My question is on section C2 of the second US-individual 2002 form that I will submit in 2025 , do I have to list the pension I started in 2024 as well as the new pension I started to take in 2025, or do I only have to list in section C2, the new pension scheme income taken in 2025? Or to put it another way, when I submit additional US-individual 2002 forms, do I need to list in section C2, the pension income details, that have been submitted on previous US-individual 2002 forms or just new pension scheme income, that have not previously been submitted?

Hi,

There is no need to duplicate pensions that have been approved for the 'NT' tax code. Each time you commence a new pension or annuity, you would complete the form below and send it to the IRS for validation.

Double Taxation: UK-USA (SI 2002 number 2848) (form US-Individual 2002)

The IRS will send the validated form to HMRC, so that 'NT' tax codes can be issued. This will allow the pension provider to refund any tax they have deducted.

Thank you.

I am trying to ask a different question about Form US-Individual 2002. I can't find a way to start a new post, so I am adding to this existing thread. Sorry if this a violation of protocol, but I can't find any other option. In Section C-2, you ask for "Due dates of the payable income DD MM YYYY." This appears to be asking for the exact date of every future payment, but unfortunately I don't what they will be - even if there was room on the form to write them all. I asked an agent who offered to submit the form for me, and he said he didn't know, which I found rather disturbing. Please could you advise what information you need in this field.

Hi,

As the form should only be submitted once a pension is in payment, you will refer to the date the pension actually started, you do not need to declare every month paid.

Thank you.

Thanks. A suggestion for consideration: The current wording on the form is misleading. Can the wording be changed to ask for "Date pension payments commenced" rather than asking for "Due dates"?