Hi.When you say you were a non-dom, do you mean that you were a non-resident of the UK? It's not that easy to change your domicile which you can read about here. Are you a British national? How long did you live in the US? You say the pension is a US government pension. Who exactly is it paid by and what job did you do to secure that pension?
I am a UK resident, but not a citizenI am a US citizen. I have an indefinite leave to stay. I have had non-dom status for the last seven years of my residency which is allowed by HMRC. After seven years the law states that I have to declare all foreign income whether it is remitted to the UK or not. My US pension is from my employment as a diplomat for the US Department of State. I have reached the seven year point now and I want to know what to do regarding my US pension.
This sound like good news. I would like to change my non-dom status beacuse as a non-dom I don't get the personal allowance which all wage earners get.. Are you saying that I can change my non-dom status and not pay tax on my US pension provided that I don't take out UK citizenship?.
You are only denied the UK personal allowance if you have chosen to be taxed on the remittance basis as far as your non-UK source income is concerned and the unremitted foreign income is £2,000 or more per annum. Otherwise, you will be entitled to the UK personal allowance. The US government pension is not taxable in the UK simply because it is a government service pension and you are not a UK national.If you change your domicile status and that is difficult to do, you will in effect become a UK citizen/national and you will be taxable on your worldwide income whether you remit it to the UK or not.
I don't think changing my domicile status will make me a citizen. To become a citizen I would have to reply to the Home Office. Take a test, have an interview and pay lots of money. HMRC has nothing to do with it. The tax form allows me to decide year by year whether to be domicile or not. I have always chosen the non domicile because I was mistaken in thinking that my US pension was taxable. I have never remitted any of it to the UK.
The UK tax form doesn't allow you to change your domicile year by year I'm afraid. It can take years to lose a domicile of birth and even then HMRC may challenge a UK domiciled individual's claim to be non-UK domiciled post death.
Can you tell me if you have any non-UK source income of £2,000 or more per annum that you don't remit to the UK other than your US government service pension.
I don't have any other income.
That's good to hear. So on my next return I I should tick box 28 "unremitted income and capital gains for 2012-13 is less than £2000? Can I claim back the tax I paid on the personal allowance over the last seven years?