Social Security tax questions.

Hi Happy New Year.

I have some questions about SS income for my in-laws. They are 78 and 84 respectively if that matters to the tax man.  They are dual UK/US citizens and have recently moved back to the UK to retire after 50 years in the US. I just want to make sure we get all the tax stuff right. Does the taxing of their SS matter in terms of where they have the money deposited?? Currently, they have their monthly money go into a US bank account they have had for years and then move the money over as/when needed. Does this have any effect on their yearly self-assessment?

So technically they have no "UK" income but since they are permanent UK citizens now they must file a self-assessment? Correct?

They must file US taxes and Fbar if needed and UK self-assessment yearly?

Thanks so much.

NWKH

Now that they are back in the UK all their worldwide income is taxable, plus the US UK tax treaty means that their SS is taxable only in the UK. It doesn’t matter where the money is paid to or when they transfer funds as they will be taxed “on an arising basis”.

When they file their US return they will continue to declare their SS but the taxable portion will be shown as zero.

My wife has her SS paid directly into our UK account which is extremely convenient and is done by the SSA with no fees at all, just the actual exchange rate on the day.

They have to file a self assessment because they have foreign income, no way round that I think.
https://www.gov.uk/self-assessment-tax-returns/who-must-send-a-tax-return

You may also need to send a tax return if you have any untaxed income, such as:

some COVID-19 grant or support payments
money from renting out a property
tips and commission
income from savings, investments and dividends
foreign income

As UK residents, both individuals are required to register for self-assessment with HMRC and file annual UK personal tax returns reporting US social security.

The income is completely exempt from US tax for a UK resident subject to UK tax on the arising basis.

Thanks so much, Durhamlad and Guya. Will let the in-laws know and break the bad news to Uncle Sam!!! Two less SS checks to tax!!

Cheers!!