Income Taxes on US Military Retirees' Pay

No question, just information only... I am a US citizen and hope to be moving to the UK before end of year 2015 to join my British fiancee. I am also US military retired and was researching how taxes both US & UK taxes, impact my military pension. I performed a quick search of this forum and found almost no discussion on this topic. I found the below information posted on the Mildenhall website under RETIREE ACTIVITY PROGRAM.  Below is the article in full, but also a link to where the article is posted online.

Income Taxes on US Military Retirees' Pay
newcomer link: http://www.mildenhall.af.mil/library/factsheets/factsheet.asp?id=18976 [nonactive]

Income taxes on U.S. military retirees' pay: Money received as retirement pay by a retired U.S. military person resident in the United Kingdom is subject to income tax by the U.S. government, but such money is wholly exempt from tax by the British government.

Authority for this is the bilateral tax treaty between the U.S. government and the U.K. government. The current treaty came into effect on Jan. 1, 2004. For United Kingdom purposes, the treaty may be referred to as United Kingdom-3 Income Tax Treaty, and the relevant article is Article 19.

Should any bank or other financial institution attempt to impose British taxes on such money you should refer them to the provisions of this treaty. If a retired U.S. military person resident in the United Kingdom is required to file a British income tax return then the person's military retired pay may be reported in the following manner. This procedure has worked without known exception.

On the supplementary pages for foreign income make no entry to the question about pensions income. In the additional information box at the end of the supplementary pages, enter the following: "Page F[number of page where question about pensions income is located], Pensions: Military Retirement Pay received from USA Government is not subject to UK tax--the provisions of Article 19, Section 2(A), of the United Kingdom-3 Income Tax Treaty apply." Should you wish, you may add, "(For information only, the amount received was $.......)".

Should you desire a copy of the treaty article, you may obtain it from the Internal Revenue Service, 24 Grosvenor Square, London W1A 1AE, England.

This is true if the retired military person is not a UK citizen. If they are a UK citizen and resident in the UK then the UK can tax any US military pension they receive. This is the case for all US Government, military or state pensions.

As a US/UK dual citizen if I was resident in the UK my MA state pension would be taxable by both the UK and the US.

Take a look on the visa section if you have any questions about UK visas and immigration as a non EU-spouse/fiancee.

Thank you for that detail. For the next several years I will be a US citizen residing in the UK. Our current plans are to move back to the US in 2-3 yrs time. Having said that, the best laid plans might change and I will keep this in mind if I fall into category you describe.  . . Thanks