Reverse question regarding my UK taxes & National Insurance

Hi Mick and welcome to the Forum.

Much of this is an opinion - buyer beware.

I'm assuming you've gone on the GovUK website and confirmed your pension entitlement; word of warning here; it may give you a false entitlement if you opted out at any time in your working history.  If you have already spoken to them, and received your confirmation of entitlement, then it should be accurate.

Taxation is determined on where you are "resident"; from what you've described, you are a UK citizen whose been travelling around the world, returning to the UK as and when you needed to, but never taken up permanent residence anywhere else, so as far as HMRC are concerned, you were/are a UK resident and liable to pay taxes in the UK on any income received; they may well ask how you have managed to live for the past 10 years and if you can't prove anything, they can make assumptions and then ask you to prove them wrong.  They tend to go for the little-guy who has a source of income they can easily dip there hands into.

Pensions in the UK are regarded as income, so liable to tax, but for many people, they fall below the threshold and don't amount to enough to actually pay any.  My point is that if HMRC think you owe them anything, they can help themselves to your pension.

Can't really advise on US taxes, except to say you will have to make a declaration to the IRS and depending on the State where you live, to the State where you live and pay State taxes.  There is a double-taxation agreement between the US and the UK on income taxes only; so you shouldn't pay income taxes twice; however, if there are any taxes that are deemed as social taxes and pensioners are required to pay them in the US, then you will still be liable for those.

My advice; go speak to a tax-adviser who is current on UK/US tax law, it will cost you a few bob, but may save you a fortune.  What you tell a tax advisor doesn't necessarily get told to the HMRC - if you see what I mean.

Hope this helps.

Yes thanks Cynic, (appropriate name for a Brit BTW!), as you say, it's all down to what they want to believe, but surely THEY have to prove l've ever had employment & not for me to prove l haven't.......
........other than saying "I haven't!"...................(which BTW I haven't!)

So should l consider a tax adviser before or after l fill in the "I'm no longer a UK resident" form?

As a footnote, I had 15k savings & sold my "overpriced at the time" cottage in Chester for almost 300k quid, so that equals around 30k a year on travelling/food/lodgings/etc, does that sound credible to you?

They'll ask for copies of bank statements.  Assuming the sale of your house was your only sale at the time (also assuming the tax-laws haven't changed in the mean time), it's not liable to tax in the UK, so you should be OK.

With regards to your footnote; sounds very good to me, but I ain't the bloke you'll be convincing.  I have however had some recent dealings with HMRC and it wasn't pleasant.  With regards to HMRC, they no longer have local offices, you can only e-mail or phone them - details are on their website.  I was "lucky" and got put through to the office in East Kilbride, about half the country away from Yorkshire!  If your case isn't on the screen in front of them, they have to get your file from a central repositry and then call you back, it took them a month to get back to me and then proceed to help themselves to my money.

In your position, I'd consider speaking to the advisor before I spoke to anyone else; maybe you don't have to talk to HMRC at all?

Be honest with them, they will find out if you are telling porkies and if found to be untruthful they will come down on hard.

Thanks again Cynic, helpful advise, & l'll use up my 1 free consultation with Robert Hallums consultants in the UK.

BritMickabroad wrote:

but surely THEY have to prove l've ever had employment & not for me to prove l haven't.......
........other than saying "I haven't!"...................(which BTW I haven't!)

Unfortunately, unless things have changed pretty drastically recently, that is not the way it works. They will make assumptions based on what you tell them and if those assumptions are to your detriment, I'm afraid it is entirely down to you to prove them wrong.

I think a good financial advisor is definitely the way to go.

Good luck.

Thanks Mythril, so let's take a different angle on my problem;

What if l just don't tell them, will the pension payment offices still send my "fully paid up" UK pension to my bank in the USA or are the two bodies linked by the magictrickery of computers?

Pension income is classed as income as far as the tax-man is concerned.  UK residents will automatically be allocated their personal allowance of tax-free income (£11k p/year before tax is charged).  Non-UK based residents have to actually claim the tax-free allowance every year from HMRC, via a Form R43; so you are going to have to talk to them at some time (or pay tax on everything up to £11k).

Assuming you're fully paid-up and haven't opted out at any stage, the maximum annual pension is £119.30 p/week (£6,240 p/year), so by itself is basically tax-free and the US won't tax you on that because of the double taxation agreement between UK/US; it's anything else you may get (such as other pensions, rental income, savings interest and wages) which may take you over the threshold.

This is why I advised you to go see a tax advisor; it may well be you have nothing to hide and have no problem saying "Hi", to the tax man every year.

LOL!!!....Yes l have no doubt that even though l've left Blighty & gotten US Citizenship Mr UK Taxman will want to chat with me every year, (which is scandalous in my eyes!), hey, we may even end up sending Xmas cards to each other!
l'm still awaiting the instigation of my "1st free consultation" from that company & strangely enough l'm getting more e mail offers of professional help from Tax Consultancies because it seems they surf this website touting for business!

BritMickabroad wrote:

LOL!!!....Yes l have no doubt that even though l've left Blighty & gotten US Citizenship Mr UK Taxman will want to chat with me every year, (which is scandalous in my eyes!), hey, we may even end up sending Xmas cards to each other!
l'm still awaiting the instigation of my "1st free consultation" from that company & strangely enough l'm getting more e mail offers of professional help from Tax Consultancies because it seems they surf this website touting for business!

LOL - welcome to Expat land - everybody hates us.

p.s. don't forget your IRS and state tax returns.

Hi mate,

If you have your 35 years of contribiution it does not matter where you have been since.
No-one care to be honest, well, not for pension purpose anyhow.
But they will when they want to establish where you intend to live.
As in many countries, especially europe pension is index linked anywhere else its frozen and does not increement annually.
I suspect you have preciosuly asked for a pension statement that list all your years you paid-in or are counted towards your pension.
As long as you have 35 years you get a full pension. Anymore and you are no better off anyhow.

enjoy

Thanks Beahor, that's good to know, but l also have a company pension that is equal to if not more than the State pension, & I hear that if you haven't "been in the system" for over 3yrs they will tax you from the 1st quid you earn?
Hopefully l'm wrong, but the taxman & happy,smiley,friendly, understanding people do not go hand in hand.

Yes, that may be so, but dont forget, you still have your taxfree amount regardless of some 11k give or take. So, even if the ask you for payment straight off, at the year end you only pay above that tax free amount, any surplus paid is refunded, yes it means a tax return i am afraid!

Gadzooks sir, not a tax return????  (actually never filled one in in my life coz I was always PAYE!)

So are you saying that State Pension does not enter the equation as far as counting towards my annual allowance?

Bloody great stuff if it doesn't.....so what about company pensions, are they taxable at all as far as annual allowance goes?

Cheers for this info BTW, & as a FYI a free consultation expert on here tell me that as l've been "off the radar" for so long, they will put me on emergency tax code so anything that counts as taxable will be taxed from zero allowance until l claim it back every year.

Mick

BritMickabroad wrote:

Gadzooks sir, not a tax return????  (actually never filled one in in my life coz I was always PAYE!)

So are you saying that State Pension does not enter the equation as far as counting towards my annual allowance?

Bloody great stuff if it doesn't.....so what about company pensions, are they taxable at all as far as annual allowance goes?

Cheers for this info BTW, & as a FYI a free consultation expert on here tell me that as l've been "off the radar" for so long, they will put me on emergency tax code so anything that counts as taxable will be taxed from zero allowance until l claim it back every year.

Mick

The State pension (plus any other UK income) does count towards your annual allowance.  The only significant difference for you as an overseas recipient is that you have to physically claim it every year via a Form R43; you can download one from here.

Any income you derive from the UK is taxable, salary, pension, dividends, benefits in kind...but my point was you only pay TAX above the 11k.
Normally, you are not bothered with this as PAYE takes care of this, in your case though, as you may be on emergency tax, or taxed at source you have to file a tax return to claim it back.
Suck, but there you are.