Social Security - 50 or 85% taxable?

Depending on income either 50%; or at the maximum 85% of the benefit is taxed. So as a U.S.C and U.K.C; U.K. resident and as SS is tax exempt in the U.S. but taxable only in the U.K, will HMRC accept a figure at a maximum of 85% of SS income to be reported on Self Assessment and therefore subject to tax? If so, how would this be reported on the Foreign income pension section?

Is the U.K State Pension only taxable in the U.K, or in both countries, with FTC taken to offset any U.S. tax?

Thank you. .

No a tax pro but coming up to both SS and the OAP in the next couple of years as a dual UK/US citizen.

From my research:

I believe that SS is only taxed in the UK but all of it is taxed, and since it is not taxed in the US then no FTC is possible.

I believe that the OAP is fully taxed in the US and UK so a FTC is available on the US taxes for me as I will pay more UK tax than US  tax on the OAP.

SS is now fully taxed in the UK under the US-UK Tax Treaty. Up until a couple of years ago, only 90% was taxable in the UK, but that came to an end.

You may still see references to the 90% in some on-line UK tax manuals; make sure you are reading the most up-to-date version. No FTC is available for tax paid on SS.

The OAP is fully taxed in both countries, and you may use the FTC to offset any US tax.

SS is now fully taxed in the UK under the US-UK Tax Treaty. Up until a couple of years ago, only 90% was taxable in the UK, but that came to an end.

You may still see references to the 90% in some on-line UK tax manuals; make sure you are reading the most up-to-date version. No FTC is available for tax paid on SS.

The OAP is fully taxed in both countries, and you may use the FTC to offset any US tax.

Thanks Vadio, good info.  The first year we were back 90% of my US private pension was taxed in the UK. The following year that 10% reduction was gone plus the pound had crashed against the dollar so the UK tax on that US pension increased a lot.

Thank you both for your help. I know that the 10% reduction was eliminated a couple of years ago. My understanding is that this was to help with the exchange rate cost and not an income threshold.

Would be nice to have the 50%/85% maximum level though, as you'd get Stateside, oh well...

Would be nice to have the 50%/85% maximum level though, as you'd get Stateside, oh well...

It would be nice if the USA respected the tax free status of ISA's, or even allowed investments in funds within an ISA without taxing them as PFICs, and it would be nice if employees could contribute more than a UK employer match into their company pension plan without it becoming a US foreign grantor trust.

It is what it is I'm afraid.