401k CONTRIBUTIONS on Self Assesment

Hello All!

US Citizen here in UK as a resident non-dom for the 2.5 years. I have an American job and get paid in the US and have social security, medicare and 401k contributions taken out of my paycheck by my US employer (this has been setup/done since long before we moved to the UK). We are currently using the remittance basis.

My question is can I deduct the social security, medicare and 401k contributions from my gross income when reporting my foreign income on my HMRC self-assessment like I do on my US taxes?  Or is there some other way to to deduct 401k contributions from my income the way that UK pension contributions are deducted from income for tax calculations?  Would I just not include these amounts in what I list for my salary, or would I need to include them and then claim them back on some other form like a SA106- Foreign form or something?

TLDR/short version: I know in both the US and UK you can can contribute to retirement schemes to lower your taxable income. I would prefer not to pay UK income tax on the money taken out for of my salary for my US 401k.  But how to I do this on my UK self assessment?

If this isn't possible, should I just stop contributing to my US401k completely and try to set up some sort of personal pension in the UK?  (We will be working in the UK for 3-10 more years but plan to move back to the US and eventually retire in the US.

Thanks all!

Sorry to be the bearer of bad news but if you are resident in the UK, you are employed in the UK, not the US. It doesn't matter that you may be doing remote work in the US. Your employer needs to be paying you as a UK employee. This means they need to be paying national insurance not social security and medicare. You pay UK taxes first and US taxes after allowing for UK taxes paid.

Hello Weller. Thank you for the advice! From what I've read, your advice is accurate for permanent or long-term transfers, but I think it may miss the "detached-worker rule" in the US-UK Treaty. From what I've read, US employees transferred on temporary terms up to 5 years may stay on the US Social Security system. I'm pulling my information from newcomer link: https://www.taxesforexpats.com/expat-tax-advice/us-social-security-agreements.html [nonactive]   It seems like there are similar detached worker rules for most contries, but often only for 2 year periods, the US one is longer for some reason.

I'm a trailing spouse, so just working remotely for a US company without a UK presence. It does look like if we plan to stay longer, then I would need to set up a DPNI (or DCNI?) to pay the NI and tax individually. newcomer link: http://www.hmrc.gov.uk/gds/nic/work/embassy.htm [nonactive]         Or, try to convince my employer to set up a UK presence (unlikely they'll be willing to do that).

You are a trailing spouse, as you say. Therefore you weren’t sent to the UK by your employer, you weren’t transferred to their subsidiary, for example.

I agree with the previous advise you’ve been given.


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