US/UK tax

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mr_spock

Original Poster:

3,076 posts

176 months

Monday 16th September 2019
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Hi all,

Can any of you recommend a good personal tax specialist who could advise on US/UK taxes?

Long version:
My partner is a US citizen based here with work. She's going back towards the end of next year, and we're thinking about getting married first, at which point I can apply for a spousal visa. My employer is a UK company which has a US company too, I could transfer to that at any point. I'll be resident in the UK for some time for family reasons, but want to figure out what's the most tax-efficient and visa-compliant option for which company employs me, where I get paid, and where I therefore need to file tax returns bearing in mind the double taxation treaty.


jeff m2

2,060 posts

112 months

Tuesday 17th September 2019
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If you remain in UK and are not a US citizen then you do not have to file a US return.
If you marry and your then wife returns to the US without you she would file a US return as "married filing separately". (and not claim you as a dependent, because you will be taking your own exemption in UK)

If you join her in the US and work it is usually advantageous to file a joint return. Any decent accountant will run the numbers both ways to find the best way to file, either joint or mfs.

If you file for a visa as a spouse it will be valid for a certain time, one year I believe, so don't file until you are sure you can arrive in the US within that period.

ETA The tax treaty is not relevant unless you have income from both countries......but that may be the case for your first year of becoming a US resident.
It's relatively simple, when you file that return you would include your UK income plus and any US income. Then on page 35 (I josh) then on page 2 you would put your US withholding tax and on the line below your withheld UK tax for which you will receive a tax credit

Edited by jeff m2 on Tuesday 17th September 04:32

mr_spock

Original Poster:

3,076 posts

176 months

Tuesday 17th September 2019
quotequote all
Thanks Jeff!

As she's in the US forces here at the moment, I read there may be a way of getting the visa stamped on base - although travelling to the US isn't a problem for that anyway. She has to go back late next year, I may be moving between US and UK for a while after that due to family committments.

Would I need to make an FBAR filing for my pension and ISA though? Or only when a US resident? It looks like US taxes are lower, so during the time when I'm moving around I'd like to find the most tax-efficient way to do it. I'm not entirely sure I can work out what that is!


jeff m2

2,060 posts

112 months

Tuesday 17th September 2019
quotequote all
FBAR, not until you are ordinarily resident.
I should add...I only know what I know, I'm not an expert.

With regards to investments, most US mutual funds are for US residents only, they distribute internal cap gains to the unit holders along with income each year, which are taxable, but they adjust your cost basis up. So it's sorta OK, it just takes a while to understand.
Any pension you have can be kept, it's not taxable until you retire, anything else....maybe consider liquidating and bring to the US and invest here, very low expense ratios and no upfront charges on nearly all funds.

Yes, taxes are not so bad here but we still moan and complain, Capital Gains have much lower rates than income, which means you have greater control as generally only realised gains are taxable, so you can offset a loss etc.and end up paying very little with help from your adjusted cost basis.
Taxation favours the wealthy, that's probably never going to change, Trump couldn't get the "carry" on hedge funds thru even with a majority.
The answer is don't fight it...just get rich.

Property taxes are a bugger in some States, also don't forget we have State income Taxes, and some Cities too.

I should make a distinction between wealthy and high earners, high earners will always be shafted, but if wealthy you have the ability to avoid income and get your "spending money" solely from CGs

Edited by jeff m2 on Tuesday 17th September 17:43

mr_spock

Original Poster:

3,076 posts

176 months

Wednesday 18th September 2019
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I'm not wealthy by any means - above average salary but not much other wealth except pension savings.

We're looking at North Carolina, 0.86% property tax, so not far off what the council tax we're paying at the moment. It seems there's a 3% vehicle tax when title is transferred. State income tax is 5.57%, so total tax 25%. Not bad smile

So, with a US visa and address, I could get paid and pay tax in the US but still spend much of my time in the UK?


The Moose

20,573 posts

170 months

Saturday 21st September 2019
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Without a heck of a long time working out your situation in its entirety, I think your biggest problem is going to be once you’ve got your green card then wanting to spend significant time outside the US. Having said all that, I don’t know anyone who married into a green card so don’t know if the rules are different to other GC holders.

If you’re marrying this chick, you’re best off using that to get into the US as opposed to an inter company transfer of some sort. That way you’re not tied to employment and can seek work from anywhere, not that single company.

We simplified all our holdings before leaving, only retaining property ownership in the UK (and an insignificant pension of £900 that we couldn’t get rid of for some reason I forget).

mr_spock

Original Poster:

3,076 posts

176 months

Monday 23rd September 2019
quotequote all
We got engaged on Saturday , so I guess it’s happening! Yes, spousal visa will be the entry route, the inter company transfer would be to get paid in the US rather than for a visa. And yes, I think it may get complicated, which is why I asked fir recommendations for a tax specialist in my OP smile

mikal83

5,057 posts

213 months

Monday 23rd September 2019
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Greenbacktaxservices are currently working on a 5 yr back log for me, fbars the lot and 2017/8 filing.

The Moose

20,573 posts

170 months

Tuesday 24th September 2019
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mr_spock said:
We got engaged on Saturday
Congrats and good luck!!!

NNH

1,112 posts

93 months

Tuesday 24th September 2019
quotequote all
mr_spock said:
We got engaged on Saturday , so I guess it’s happening! Yes, spousal visa will be the entry route, the inter company transfer would be to get paid in the US rather than for a visa. And yes, I think it may get complicated, which is why I asked fir recommendations for a tax specialist in my OP smile
Congratulations!

I'm a Brit married to an American, living in the US on a spousal Green Card. Your immigration issues are more important and more complicated than your tax affairs IMHO.

- If you suggest to the US visa authorities that you're not planning to live full time in the USA, they won't grant you entry.
- If you "abandon" your US residency, your Green Card may be forfeited (guess who learned this one back in 2012)
- If you have a Green Card, you'd be very wise to file US taxes even if living elsewhere
- If you move to the US on a spousal Green Card, you get fast-tracked citizenship in 3 years. This is probably going to make most sense for you, as it lets you live outside the US after you become a citizen without any problems

Feel free to PM if I can help.



Stigproducts

1,356 posts

232 months

Tuesday 24th September 2019
quotequote all
Don't forget that as a US citizen you have to file US taxes for the rest of your life, no matter where you live. If the US rules say you pay tax but your local country doesn't, you still have to pay the US what you owe them, even if you haven't set foot in the place for decades
Ask Boris Johnson how I know!

mr_spock

Original Poster:

3,076 posts

176 months

Tuesday 24th September 2019
quotequote all
NNH said:
mr_spock said:
We got engaged on Saturday , so I guess it’s happening! Yes, spousal visa will be the entry route, the inter company transfer would be to get paid in the US rather than for a visa. And yes, I think it may get complicated, which is why I asked fir recommendations for a tax specialist in my OP smile
Congratulations!

I'm a Brit married to an American, living in the US on a spousal Green Card. Your immigration issues are more important and more complicated than your tax affairs IMHO.

- If you suggest to the US visa authorities that you're not planning to live full time in the USA, they won't grant you entry.
- If you "abandon" your US residency, your Green Card may be forfeited (guess who learned this one back in 2012)
- If you have a Green Card, you'd be very wise to file US taxes even if living elsewhere
- If you move to the US on a spousal Green Card, you get fast-tracked citizenship in 3 years. This is probably going to make most sense for you, as it lets you live outside the US after you become a citizen without any problems

Feel free to PM if I can help.
Thanks! Will pm soon. We do plan to live in the US more or less full time, but since my mum is 90 and my kids are too old to get on my visa I would expect to come back regularly and for a couple of months at a time. My future wife probably wouldn't join me for these trips in the main, and I understand that having a wife and home in the US should avoid any risk of abandoning? Especially if I'm working for a US company.


mikal83

5,057 posts

213 months

Tuesday 24th September 2019
quotequote all
Stigproducts said:
Don't forget that as a US citizen you have to file US taxes for the rest of your life, no matter where you live. If the US rules say you pay tax but your local country doesn't, you still have to pay the US what you owe them, even if you haven't set foot in the place for decades
Ask Boris Johnson how I know!
You sure. I read somewhere that if you earn below a certain threshold you didnt have to?

The Moose

20,573 posts

170 months

Tuesday 24th September 2019
quotequote all
Stigproducts said:
Don't forget that as a US citizen you have to file US taxes for the rest of your life, no matter where you live. If the US rules say you pay tax but your local country doesn't, you still have to pay the US what you owe them, even if you haven't set foot in the place for decades
Ask Boris Johnson how I know!
I believe you can give your citizenship up. My understanding is that you effectively have a final-return and pay whatever's due. Obviously if you have any wealth, they'll check you out closely and make sure you've paid everything.

I know an American who moved to the UK and retained his US citizenship. He wants to get rid of the US citizenship because he has decided never to return. He spent a long time not paying US tax and has since become rather wealthy - it sounds like he's always at risk! That's why I said to simplify everything you possibly can.

jimmyjimjim

5,847 posts

199 months

Wednesday 25th September 2019
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The Moose said:
I believe you can give your citizenship up. .
You, can but it's an official declaration, under oath, has to be done in person at a specific location (embassy?) and some other guff; not a simple matter.


Stigproducts

1,356 posts

232 months

Saturday 28th September 2019
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mikal83 said:
Stigproducts said:
Don't forget that as a US citizen you have to file US taxes for the rest of your life, no matter where you live. If the US rules say you pay tax but your local country doesn't, you still have to pay the US what you owe them, even if you haven't set foot in the place for decades
Ask Boris Johnson how I know!
You sure. I read somewhere that if you earn below a certain threshold you didn't have to?
Good luck with that unless you are a lollipop lady working 45mins a day or something
https://www.msn.com/en-us/money/taxes/here-are-the...
and don't forget the state income tax, which can be as much as and extra 12% + even more if you are self employed.

Boris had to pay capital gains, which is a lower percentage than income tax but he still got shafted. In teh UK he didn't have to pay any tax on his house sale, but Obama still had his hand out.
https://www.telegraph.co.uk/news/politics/11361816...

" In the UK, individuals do not pay capital gains tax on the sale of their first home, so Mr Johnson would not have faced a bill.
However, all US citizens, including those with dual citizenship, are legally obliged to file a tax return and pay US taxes wherever they are living. "

This is why in the US you get a lot of old people living in a massive house on their own, because if they sold it, most of the profit would get taxed, so it wouldn't be worth their while.

mikal83

5,057 posts

213 months

Saturday 28th September 2019
quotequote all
Stigproducts said:
Good luck with that unless you are a lollipop lady working 45mins a day or something
https://www.msn.com/en-us/money/taxes/here-are-the...
and don't forget the state income tax, which can be as much as and extra 12% + even more if you are self employed.

Boris had to pay capital gains, which is a lower percentage than income tax but he still got shafted. In teh UK he didn't have to pay any tax on his house sale, but Obama still had his hand out.
https://www.telegraph.co.uk/news/politics/11361816...

" In the UK, individuals do not pay capital gains tax on the sale of their first home, so Mr Johnson would not have faced a bill.
However, all US citizens, including those with dual citizenship, are legally obliged to file a tax return and pay US taxes wherever they are living. "

This is why in the US you get a lot of old people living in a massive house on their own, because if they sold it, most of the profit would get taxed, so it wouldn't be worth their while.
You pay tax on the sale of your personal house that you live in???

Stigproducts

1,356 posts

232 months

Saturday 28th September 2019
quotequote all
Yes, subject to a tax free allowance. But if you bought a house a long time ago you soon breach that and then it's capital gains. It's $250000, per person. See that telegraph article and you can see how Boris ended up owing 100k gbp.

NNH

1,112 posts

93 months

Saturday 28th September 2019
quotequote all
mikal83 said:
You pay tax on the sale of your personal house that you live in???
US capital gains tax is complex. Personal homes are subject to tax (above $250k for single, $500k for double) and you can't offset inflation, but the rules for offsetting repairs/investment are generous, and the capital gains rate is lower than the income tax rate.

jimmyjimjim

5,847 posts

199 months

Sunday 29th September 2019
quotequote all
Foreign earned income exclusion.

So ignore the crap about dinner ladies above.

https://www.efile.com/foreign-earned-income-and-in...

(ignore the source too - afaik, the amounts are correct, it's just the first google hit).