# foreign tax credit



## misschrissy (Jun 27, 2010)

Am trying to investigate this atm, not getting a clear answer from IRS as yet so here goes...
I have to pay tax in UK on one of my pensions, have other small pension that could be taxed in UK or US, depends if I merge them or not, have to decide what to do asap (pension shoud start this month) I need to know how the US calculates tax allowing for this. :confused2:

They could either assess ALL my income and work out what I would pay in US and then deduct the amount I have paid already in UK
or they could simply not count the amount of income that is already being taxed in UK. 
I do know I won't be double taxed but I need to know whether it will matter financially if I merge my pensions.

but.... it will make a difference which way they do it to the total amount I pay in taxes to both countries since UK tax is higher level

however there is also the personal allowance to be considered, will the UK tax me only on amount above my personal allowance even though I am not living in UK and will the US also allow me a personal allowance (or actually it will probably be allowance for us as married couple submitting form) ie will I get 2 allowances ?

Is there anyone here that has been through this? I have tried to find answers and UK were clear what they would do if it were the other way around but I cannot find clear info up to now on this from IRS. 

I have asked a friend of mine whi is my attorney and also doing my tax returns but he is not a tax expert, if nobody here knows, can you advise a reliable tax specialist ?

I am retired but not working, so have bought houses to rent out, next year will be the first year I have made a profit so will be filing taxes for first time in January.
Thanks


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## Davis1 (Feb 20, 2009)

US - UK Tax Preparation and Advice | BritishExpatsTax.Com


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