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  • RE: Double tax on US pension incomr

    I am indeed a UK citizen, but as per statements from HMRC above, it is not correct to state “your worldwide income is taxable in the UK”. This is because the tax agreement between the UK and the USA specifically exempts lump sum pension payments from all UK taxation. HMRC stated earlier in this dialogue “ We would agree that according to Article 17, statement number 2 does state that any lump sum payment would taxable only in the US. You can also see the Double Taxation Digest which advises the reliefs on lump sum pensions received in the US.”. The online self assessment tax form only calculates UK tax relief on the portion of the lump sum taken as Federal tax. Whereas it should allow UK tax relief on the entire lump sum. Therefore I have been overtaxed. The lump sum has been taxed twice, by the USA and the UK, which is contrary to the agreement between the two states. Thank you for reviewing this once more.
  • RE: Double tax on US pension incomr

    I have tried completing a DT individual form, but it presumes I am tax resident outside the UK. I am actually a UK citizen resident in the UK. Should I instead request an appeal of the HMRC decision to tax my US lump sum? And if so do I request that in writing to Self Assessment, HMRC, BX9 1AS? Thank you.
  • RE: Double tax on US pension incomr

    Thank you for confirming my understanding of the treaty. Because I have been taxed on my lump sum by HMRC, in the tax year just completed, how do I request a review of the tax I have paid and request a refund? Thank you.
  • RE: Double tax on US pension incomr

    Further to mine and Owen J’s submissions on the subject of double taxation of pension lump sums, I have found an HMRC document “DT19853 - Double Taxation Relief Manual: Guidance by country: United States of America: Notes.” This states, referencing Article 17 (Pensions) “Lump Sums A lump-sum payment derived by a resident of one State from a pension scheme established in the other State shall be taxable only in that other State.” I have evidence supplied by the IRS that the payment I received was a “lump sum”, and that it was subject to a 20% Federal tax. Therefore, no part of it should be subject to UK tax. Is this correct?
  • RE: Double tax on US pension incomr

    I did claim FTCR and the 20% US Federal tax was deducted from the UK tax due on my total income. However, my question is, why was my US pension lump sum included in my income in the calculation of my UK tax. I had paid the Federal tax due on it (20%). So should not the remaining 80% be treated as tax free of UK tax? And the whole of that “Foreign Income” be deducted from my total income, before calculating my UK tax? Thank you for any advice.
  • Double tax on US pension incomr

    I reported in my tax return a lump sum payment from my pension in the USA. The 20% Federal tax was deducted from the calculation of my total income. But the remainder was included in my income and the tax calculated on the total. I believe therefore, I have been subject to double taxation on the lump sum. And this is contrary to the tax agreement between the UK and the USA, which states pension income is to be taxed in one State only, and in the case of lump sum payments it is the USA. Is this correct? Am I due a tax refund? Thank you.
  • Tax paid on account inflated by one off income in previous year

    In 20/21 I received a substantial lump sum from a US pension. This foreign income substantially increased my income tax for 20/21. This I understand and accept. But it has also increased the amount of tax I must now pay on account for the current year. Because that amount is assessed as equal to the total tax due for the preceding year. This Is a problem because the lump sum payment will not be repeated this year nor in any year in future. It was a one off. Can the amount of tax on account that I need to pay this year be recalculated to remove the inclusion of this one off income? Thank you for any advice.
  • Tax report on lump sum taxed in USA

    I had a 401K pension held in the USA. I withdrew the entire amount in a single lump sum. The scheme administrators knew I was non-resident alien, resident in the UK, and therefore withheld 20% in Federal tax. Since I have paid tax in the USA, do I need to report this income? And if so, do I report it in the foreign income pages of the self-assessment tax return? Thanks for any advice.