UK tax on US social security benefits?

My wife and I are retired and we moved to the UK (my wife is English, I’m American). We do not work in the UK, but live off our Social Security benefits. We paid US taxes last year—2010—but I don’t know what we are required to do about UK taxes. Do we need to pay or file with no UK income?

If you are filing in the UK on the arising basis the US social security pension is exempt from US tax under the double tax treaty. You should doubtless file an amended US return to reclaim any US tax you paid on this income and both file UK tax returns (where 90% of the income would be taxable).

Guya --

Thanks for your reply, but I'm somewhat financially illiterate and don't really understand.
What does "on the arising basis" refer to?
Are you saying that the UK taxes take precedence over the US, even though the income is from US Social Security?
For 2010, I also cashed out my TIAA-Cref pension fund to buy the UK house, and took a big tax hit in the US. Do you know how that affects things?

Both of you need to file UK tax returns. Where it is of benefit to you you would elect the benefits of the treaty such as in relation to the LSD you took in 2010 (lump sum distribution, in case you are worried) and the social security pensions.

If you have not already registered with HMRC you are already late in notifying chargeability so may be hit with modest penalties so you need to both register for self-assessment as soon as you can after the bank holiday. You are past the deadline for filing on paper so will have to file UK returns by the end of January 2012 using online filing once you registered for self-assessment and for an online access code.