Is this a general rule?

I know its ridiculous to hope that there is any generally applicable rule when it comes to US and UK
taxation, but I'll ask anyway.

In my planning I'm assuming that the country where the funds reside gets the first shot at taxing them.

So if I get UK wages or dividends I put them on my UK forms, pay the tax and then claim a tax credit
on the US forms. Likewise for US income, dividends ete., I pay the US first and then claim a tax credit in the
UK and I'll end up paying any tax differentials to the country with the higher taxation rate.

There is no such general rule.  It dependss on where you resident and a citizen firstly...

There is no such general rule.  It dependss on where you resident and a citizen firstly...

But when you start filling out forms you have to start somewhere. Sometimes tax is
taken out at source and obviously that goes the the country where the funds are located.
In order to claim foreign tax relief the tax has to have been paid. Here's a 'concrete'
question

US/UK dual citizen domiciled and ordinarily resident in the UK earns $100 in the US and
$100 in the UK. How is this taxed? Let's ignore foreign income allowances and apply the
lowest income tax bracket.

Next what happens with $100 in US dividends that are remitted to the UK and $100 in UK
dividends.

But when you start filling out forms you have to start somewhere. Sometimes tax is
taken out at source and obviously that goes the the country where the funds are located.
In order to claim foreign tax relief the tax has to have been paid. Here's a 'concrete'
question

US/UK dual citizen domiciled and ordinarily resident in the UK earns $100 in the US and
$100 in the UK. How is this taxed? Let's ignore foreign income allowances and apply the
lowest income tax bracket.

Next what happens with $100 in US dividends that are remitted to the UK and $100 in UK
dividends.

I've done some more research and things are becoming a bit clearer to me. Looks like the
whole retirement account stuff is nicely handled and in fact US social security paid to me
in the UK will only be taxed in the UK. It looks llike this is generally the case for pensions
and annuities, except when you gate a lump sum pay out, then that is taxed in the country
where the retirement fund is located. Anywho, I''m going to plod through the tax forms
of both countries and see if I run into any issues.

Nun - you are kinda of right but:

1. The US returns will need treaty claims, and
2. The UK will tax 90% of US SS, as against the maximum of 85% in the US, so the overall answer (depending on tax rates which historically have been higher in the UK) will be slightly worse if you are in the UK.

Nun - you are kinda of right but:

1. The US returns will need treaty claims, and
2. The UK will tax 90% of US SS, as against the maximum of 85% in the US, so the overall answer (depending on tax rates which historically have been higher in the UK) will be slightly worse if you are in the UK.

After going around the houses an bit I think I need to ammend my original post. As guya points out citizenship and residence are
critical to how you get taxed. So I'll postulate a "rule of thumb" for a UK/US dual citizen, resident in the the UK.
Render unto Ceaser what is Ceaser's.

The country where the income, dividends, pensions etc arise will tax them and then you claim a foreign tax credit
in the other country, this is a result of domestic laws and specifically addressed in Article 1 paragraph 4,
of the Tax Treaty. It seems like common sense that the country where the
money arises would get first bite at the cherry. I've deferred US tax by paying into 401ks, so it just seems right
that the US should get the tax when I eventually take the money out, regardless of where I live. The situation is
probably different if you are not a US citizen.

Some examples might help. Say I earn money in the UK and have interest and dividends, the UK will tax the income
by PAYE and the tax will probably be taken out at source on the investments. As the US requires me to report
worldwide income I'll have to include my UK income on my 1040, but I'll claim foreign earned income allowance
(up to $80k/year) and tax credits for the UK tax paid.

If I take money from a US pension the US will tax me on it as I'm a US citizen and this will appear on my 1040.
As a UK resident I'll have to report my US pension income, but as I've paid US tax on it already I'll get a
tax credit for that in the UK. For the case of ROTH IRAs to the extent that they are tax free in the US ithey
are also tax free in the UK.

A specific exception to this are State pensions from the US or UK which are only taxed by the country where you reside.

Perhaps someone can try to summarize similar situations for other citizenship and residence situations.

nun - you are making the classic mistake of dashing to read the treaty before asking and understanding the domestic rules in each place.

The treaty is only useful if you know the domestic rules and can then define what the treaty is modifying.   The UK gives unilateral relief but only if tax is minimised in the US and only on income that is doubly taxed.

On top of that both places have different rules for what is taxed, what the tax year is and which exchange rate is acceptable.

Interest and dividends are never taxed under PAYE, so your example falls at the first read.  If you are thinking of foreign earned income then you could claim the foreign earned income exclusion if/when you qualify.  However you then need to know the US domestic rules as to in which basket the earned income as against the investment income is reportable on your US tax returns.  The US of course taxes other things that the UK does not such as gambling winnings and employer pension contributions.  A Day will soon have a significant impact on UK taxes but may adversely affect the US position; IMHO a general rule is a dangerous game.  The UK has an unwritten constitution so much of UK tax law is not written in legislation signed by the Monarch.  HMRCs manuals are only one view and frequently incomplete.  There is no substitute for expert advice.

Your understanding of the UK taxation of US pensions does not accord with my thinking under either UK domestic or treaty rules.  HMRCs manusls are poorly and incompletely drafted on this point.  If you wish to pay more tax than necessary then you can continue down your chosen road, but I would suggest for most readers of this forum that expert advice is needed.

I am not usually so disparaging - promise!  However the situation you are in is not amenable to DIY planning.  An expert in this fiekd will have spent a dozen or more years reading nothing but tax law and attending compulsory education each year.  For most folks this kind of knowledge is worth paying for so that they know for certain that things are correct.

You seem to have misinterpreted my post. I am applying the domestic regulations as far as I understand
them. As a US citizen I believe that I should pay US federal tax on my 401k distributions, even if I'm
also a UK citizen domciled in the UK. My understanding is probably lacking so I'd appreciate any comments
you have. Can you tell me your understanding of how the UK taxes US pensions  of UK/US dual nationals
domiciled in the UK?

Obvioulsy UK Pay As You Earn is not applicable to dividends and interest I was only saying that
any UK earned income would be subject to UK PAYE.

Can you tell me where I'm going wrong. Its frustrating to think you are
understanding something and then be told you're not but the explaination as to why is lacking.
Can you take my two examples and tell me how to approach the situations I've outlined?