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Sam, Accountant
Category: UK Tax
Satisfied Customers: 13942
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Capital Gains, CIS ask for Sam Tax
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As you know - UK pensions are not taxable. However, if I received

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As you know - UK pensions are not taxable. However, if I received a pension from the USA (known as social security benefit and is similar to the UK pension would I have to pay taxes on it if I was domiciled in the UK? If not - how would I frame it on my self assessment so it was understood to be a "state" pension and not some other form of income?



Thanks for your question


UK pensions ARE taxable, so I am unsure where you have taken your information to suggest they are not, as this is incorrect.


State pension cannot have tax deducted directly from them, so are taken into account, by virtue of a deduction from the allocated personal allowances, so that income is fully covered, without the need for tax deductions, BUt if they are in excess to the personal allowance, then tax is calculated on this excess, either through the tax code being treated as a K (Minus allowances) code - against another source of income, or the additional tax being calculated at the year end, and the additional tax paid then.



And your declaration of the USA social security pension would be declared on the foreign income page, (along with any USA tax suffered on it, if that is the case) , so that it is added into your total income position.






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Customer: replied 4 years ago.

Sorry - yes, you are right.


So if the UK state pension (or foreign version of the state pension) is below the personal allowance threshold, and if no other income is earned from any source then the pension(s) are effectively free of taxes in the UK?