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Posted Thu, 18 May 2023 14:14:06 GMT by Tim Winnock
Hello, I am a US/UK citizen who begin working from the UK on 1st May 2022. I return to the US for work frequently and am tax resident in both countries for both 2022 and 2023. I receive all my income from a US employer in US dollars. I have pension contributions taken out of my paycheck and deposited in a US pension scheme. These contributions continued when I moved to the UK. Article 18 of the US-UK DTA seems to indicate that since these contributions are tax-deductible in the US, I may also deduct them from my UK taxable income. Is this correct? The amount in question is about $30,000 USD. A second question on the same topic: I am considering opening a SIPP. What is the amount of my SIPP contribution carryforward from 2022-2023? Is it £40,000 or £40,000 minus the $30,000? Additionally, do I have to make a national insurance contribution for 2022-2023? I have already paid a Social Security contribution in the US. Am I required to do both? Thank you in advance for any insights on these questions.
Posted Wed, 24 May 2023 13:42:03 GMT by HMRC Admin 32

The pension contributions taken out of your US paycheck and deposited in a US pensions scheme would need to be converted to pounds sterling and deducted from the £40000.00 tax free threshold. The remainder can be entered in a SIPP and deducted from your UK earnings.  Anything above this amount would be taxable and should be declared in a Self Assessment Tax Return.

Thank you.

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