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Do I have to pay tax on my pension from the UK.

Boise, ID |

I have been a U.S. citizen since 2012, prior to this I held a green card since 2007. I am in receipt of a disability pension from the UK government, since 1998. I paid taxes on the pension in the UK, however, when I applied for exemption of double taxation, the UK put me on a no tax code and repaid the tax I paid from 2007. I have been given a lot of conflicting information from Federal and State IRS sources. Basically the Federal say I don't pay them taxes, it is up to my State. The State IRS tells me in a very unsure manner that because I receive a government pension i.e. public pension, it is not taxable in my state, another in the IRS tells me anything over $14,976 is taxable. No one can tell me were on my tax return do I enter my pension details. Pension approx' $17,000/yr.

Attorney Answers 4


  1. The general rule is that international pension income will only be taxed in one country or another but not both. You’ve been given exemption status from the foreign jurisdiction so you’ll need to report the pension income on your US return. Whether or not it will be taxable will be determined by the nature of the payment and the exclusion amounts. Here’s a web reference from the IRS that may help. http://www.irs.gov/Businesses/The-Taxation-of-Foreign-Pension-and-Annuity-Distributions. Feel free to contact us with any questions.

    Good luck.

    Evan A. Nielsen
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    Evan A. Nielsen is licensed to practice law in California. The information provided here is for educational purposes only and is not intended as legal advice for a particular matter. This response does not create any attorney-client relationship with the author. For specific advice about your particular situation, please consult an attorney.


  2. Technically, you are taxable on all worldwide income received. However, you can receive a credit for taxes paid in a foreign country and this may reduce your liability. But in the absence of this, pension income is income.

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  3. You should check the tax treaty between the U.S. and U.K. Also, given the complexity of these issues you should seek the advise of a qualified tax professional

    The information provided here is for educational purposes only and is not intended as legal advice for a particular matter. The general information in this answer is not intended to be nor should it be treated as tax, legal, or accounting advice. Additional issues could exist that would affect the tax treatment of a specific transaction and, therefore, taxpayers should seek advice from an independent tax advisor based on their particular circumstances before acting on any information presented. This information is not intended to be nor can it be used by any taxpayer for the purpose of avoiding tax penalties. This posting does not create any attorney-client relationship. For specific advice about your particular situation, consult a qualified attorney. CHRISTIN BUCCI, Esq., CPA, LL.M. is an experienced tax attorney with offices located in Fort Lauderdale and Miami, Florida, who is licensed to practice law in Florida, Ohio and the District of Columbia.


  4. Generally pension is taxed at the source. This is why when you applied for an exemption the UK gov repaid you back taxes provided that you pay taxes in the US on your worldwide income. Art. 18 of the Tax Treaty between USA and UK regulates your case. My office deals with issues like yours. Feel free to contract me. Best

    This reply is offered for educational purpose only. You should seek the advice of an attorney. The response given is not intended to create, nor does it create an ongoing duty to respond to questions. The response does not form an attorney-client relationship, nor is it intended to be anything other than an educated opinion of the author. It should not be relied upon as legal advice. The response given is based upon the limited facts provided by the undisclosed individual asking the question. To the extent additional or different facts exist, the response might possibly change. Attorney is licensed to practice law only in the State of New York. Responses are based solely on New York Law unless stated otherwise. Pursuant to Internal Revenue Service guidance, be advised that any federal tax advice contained in this written or electronic communication is not intended or written to be used and it cannot be used by any person or entity for the purpose of (i) avoiding any tax penalties that may be imposed by the Internal Revenue Service or any other U.S. Federal taxing authority or agency or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

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