Small US inheritance - How do I handle this?

Agreed, there is not enough information of UK tax status and income level to know the answer. I feel that weesoul should seek some advice or do some personal research on their tax situation particularly as they are receiving US pensions and depositing them in US accounts and will soon be receiving a UK pension too and weesoul's posts make me think that they might not be fully aware of their tax situation.

As I said I have had no UK income since 2007. I've had a small US pension since 2012 and will get both SS and UK pensions next year. Both will be too small to owe tax in either country. 

It sounds as if it would have been covered by the £2,000 exemption if not remitted to the UK or if remitted it was below the UK personal tax allowance.

The US social security and other US pension are certainly taxable in the UK, but we don't know the overall level of income so it still may be below the UK personal allowance.

Without giving too much detail, I reside in the UK.  Any capitol gains from the US account is not actually moved to the UK, it might be spent in the US or spent here.  It is well under £2,000 in gains.  When I have both US pensions I will still be well below the annual amount to need to pay an income tax, even with the very small capitol gains.  The same for the UK pension.  Even totalling them together wouldn't be enough to pay tax to either country.  My husband's pensions not included in this.

Any chance I can get advice by private messaging giving a list of amounts?

To make sure you fall beneath the income thresholds to file taxes you really need to understand how you are taxed and run a few numbers. What US and UK income sources and UK allowances or US exclusions and deductions have you included on your US and UK taxes to calculate that you are below the thresholds? The small size of your capital gains and combined pensions may well have kept you underneath these thresholds, but you should look at your situation each time your circumstances change. If you do not understand how the Tax Treaty applies to dividends, US and UK pensions and social security payments you do not have the tools to estimate your US or UK tax correctly and should do some research or get some advice. You could ask at the US Embassy, they have a good tax help desk.

To make sure you fall beneath the income thresholds to file taxes you really need to understand how you are taxed and run a few numbers. What US and UK income sources and UK allowances or US exclusions and deductions have you included on your US and UK taxes to calculate that you are below the thresholds? The small size of your capital gains and combined pensions may well have kept you underneath these thresholds, but you should look at your situation each time your circumstances change. If you do not understand how the Tax Treaty applies to dividends, US and UK pensions and social security payments you do not have the tools to estimate your US or UK tax correctly and should do some research or get some advice. You could ask at the US Embassy, they have a good tax help desk.

I haven't done UK taxes since 2007, only my husband does.  My UK income next year will be the pension which will be £3800.  Not enough to pay tax.  My US pensions next year (partial for SS) I estimate will be just over $6,000 with maybe $200-300 interest income.

I haven't done UK taxes since 2007, only my husband does.  My UK income next year will be the pension which will be £3800.  Not enough to pay tax.  My US pensions next year (partial for SS) I estimate will be just over $6,000 with maybe $200-300 interest income.

So your total income is around 7740 pounds. Assuming you are taxed on an arising basis your US pensions, US SS, interest, and UK state pension are all UK taxable, but they are less than the personal allowance so probably no UK tax due.

Your US SS is not US taxable if you are a UK resident so you need to exclude that from your worldwide income and see if you have to file or pay US taxes.

You don't mention any dividends or capital gains, just interest. If that comes from a CD or bank account you are ok, but if you own US mutual funds you should make sure you understand the UK tax treatment of overseas funds, even if the amounts are small. Also if you own any UK funds or have UK accounts that have an aggregate value over $10k you should file FBAR.

The US position is quite straightforward. Income is above the filing threshold so annual filing of income tax returns is mandatory even if there is zero tax due. FBARs are possibly also needed.

There may, however, be other items taxable for US purposes that are not taxable in the UK such the winter fuel allowance or income within an ISA.

So your total income is around 7740 pounds. Assuming you are taxed on an arising basis your US pensions, US SS, interest, and UK state pension are all UK taxable, but they are less than the personal allowance so probably no UK tax due.

Your US SS is not US taxable if you are a UK resident so you need to exclude that from your worldwide income and see if you have to file or pay US taxes.

You don't mention any dividends or capital gains, just interest. If that comes from a CD or bank account you are ok, but if you own US mutual funds you should make sure you understand the UK tax treatment of overseas funds, even if the amounts are small. Also if you own any UK funds or have UK accounts that have an aggregate value over $10k you should file FBAR.

Miscalculated.  Looks like the equivalent of £9,000 between all 3 pensions. Just did my SS phone application. 

No mutual funds.  Just CDs, stocks, college funds, cash.  No investments in UK and not enough for FBAR (we spend too fast!)

I filed income tax return for the US last year as I'd been receiving a small pension.  Will continue to file every year.

Thanks very much of help and your patience!

The US position is quite straightforward. Income is above the filing threshold so annual filing of income tax returns is mandatory even if there is zero tax due. FBARs are possibly also needed.

There may, however, be other items taxable for US purposes that are not taxable in the UK such the winter fuel allowance or income within an ISA.

Thanks for your help.  No FBAR needed.  I will file a US return.  No ISA's and my husband gets the winter fuel allowance - only one per household.

Thanks for your help.  No FBAR needed.  I will file a US return.  No ISA's and my husband gets the winter fuel allowance - only one per household.

Make sure you understand the application of the Tax Treaty so that you include the correct pensions and SS amounts on your US taxes. Also you need to be aware of any US tax withholding on payments made to you in the UK. You could well get a tax refund from the US.

Make sure you understand the application of the Tax Treaty so that you include the correct pensions and SS amounts on your US taxes. Also you need to be aware of any US tax withholding on payments made to you in the UK. You could well get a tax refund from the US.

I was reading through this and it says there is no US tax on SS paid to non-US residents.  Do they withhold tax which I'll need to get a refund on? 

I assumed when I file I'd just put the UK pension amounts on the Foreign income exclusion form.  The only non SS income from the US will be a small amount of interest and my university pension ($222/month). 

I can't find anything that says my dh will get 50% of the amount of my SS.

I was reading through this and it says there is no US tax on SS paid to non-US residents.  Do they withhold tax which I'll need to get a refund on?  

No, you will get your US SS with no tax withholding. You do not enter it on your 1040 because US SS is not US taxable when paid to a UK resident. It should be included in your UK income for tax purposes though.

I assumed when I file I'd just put the UK pension amounts on the Foreign income exclusion form.  The only non SS income from the US will be a small amount of interest and my university pension ($222/month).  

I can't find anything that says my dh will get 50% of the amount of my SS.

You cannot assume anything as far as tax goes, you must understand the IRS and HMRC regulations their interaction via the Tax Treaty and how they are applied to your circumstances.
 
The Foreign Earned Income Exclusion is only for earned income so you cannot use it for pensions. You need to use foreign tax credits, if any. I strongly urge you to read the relevant parts of the US/UK tax treaty, the  IRS rules and or seek advice from the US Embassy or a professional.

No, you will get your US SS with no tax withholding. You do not enter it on your 1040 because US SS is not US taxable when paid to a UK resident. It should be included in your UK income for tax purposes though.

You cannot assume anything as far as tax goes, you must understand the IRS and HMRC regulations their interaction via the Tax Treaty and how they are applied to your circumstances.
 
The Foreign Earned Income Exclusion is only for earned income so you cannot use it for pensions. You need to use foreign tax credits, if any. I strongly urge you to read the relevant parts of the US/UK tax treaty, the  IRS rules and or seek advice from the US Embassy or a professional.

Thanks.  I will do that.