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Articles by Holly Payling
Stepping Stones: Pensions For Americans In The UK
Retirement can be an exciting moment in many people's lives. As a US person planning to retire in the UK, with a mixture of US and UK pensions, it's important for you to make a plan to prevent double taxation and minimise the US/UK tax burden as much as possible. The case study below shows how one of our clients benefited from tax reliefs, distributions at lower tax rates, and avoiding double taxation when withdrawing from US and UK pensions.
What Americans in the UK need to know about pensions
Withdrawing pensions For a dual US and UK taxpayer, the US-UK double taxation treaty can be used to prevent double taxation, but firstly we will want to review the domestic US and UK tax rules to make a tax-efficient plan. There are a number of factors to take into account if you want to minimise the tax you have to pay upon withdrawing your pensions. The following table is a useful overview of how pension distributions are taxed for US citizens: Plan location What received?
US Estate Tax for non-American owners of US assets
US Estate Tax for non-US domiciliaries If you’re a non-US domiciliary, you’re subject to US estate and gift taxation on certain types of US assets at up to 40%. However, your exemption at only $60,000 is much lower than that of US domiciliaries. This exception is not indexed for inflation and the exemption is only available for transfers at death.
President Biden’s American Families Plan and what it means
A new top tax rate of 39.6% A new top tax rate of 39.6% A key takeaway is the proposed increase to the top rate of tax from 37% to 39.6%. Prior to the change, the top rate of tax has been 37% since 2018. The new 39.6% rate is expected to apply only to the top 1% of taxpayers. It is yet to be confirmed what level of income the new rate will apply to, and the start date.
What Americans need to know about estate and Inheritance tax
Lifetime gifting One of Jason’s UK bank accounts has a cash balance of £500k. He would like to pass the cash to his children in a US and UK tax efficient manner and wants to give them the gift directly. For UK tax purposes, a gift can be fully excludable from IHT if the donor survives seven years from the date of the gift. If the donor dies within seven years, the gift remains taxable in their estate. Jason is in good health and expects to live seven years.
IRS COVID-19 relief for US Individual Retirement Accounts
UK residents – be careful! If you’re a UK resident, take caution. Although the special distribution may be tax free in the US, they may not necessarily be so in the UK. The US-UK tax treaty states that any pension payment not taxable in the US will also not be taxable in the UK. This is welcome news, but there could be a timing problem as the amounts will only not be taxable if repaid within the 3 year window. Let’s look at an example below.
Changes to foreign pensions for US taxpayers - or not?
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Changes to foreign pensions for US taxpayers - or not?
Necessary cookies Always active Analytics cookies Inactive Marketing cookies Inactive Cookie management Use of cookies Necessary cookies Analytics cookies Marketing cookies Allow all Save settings Use of cookies Necessary cookies Analytics cookies Marketing cookies
Buzzacott shortlisted in the Citywealth Awards
We are pleased to announce that we have been named as a finalist in both the Citywealth Future Leaders Awards 2019and also the Powerwomen Awards 2020. In the Future Leaders Awards, Sinead Mandlik, a Senior Manager in our VAT Consultancy team was shortlisted in the Accountant of the Year category.
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