Hi there -
My husband and I will be moving back to the U.S. from the U.K. after we sell our house in England. We will be bringing the money from our house over to the US. My question is - Will we be taxed on this chunk of cash we bring into the U.S.? What if we immediately buy a home in the US with it? We do not own any other property and would just be using this money to buy a home.
Thank you for your help!
Well, that settles that! Thanks.
No, as long as you do buy a home with it. I think if you invest it and rent instead, you could be liable. But if you buy a home you're fine.
what about the other way, what if for some unknown reason, like I HATE IT HERE, I empty my 401k's and head home to blightly, does anyone know if I have to pay tax on cash coming in to the UK ????
Our UK accountant says no to tax both ways. If you have more than one house however, you will be liable for CGT when you sell up.
what about the other way, what if for some unknown reason, like I HATE IT HERE, I empty my 401k's and head home to blightly, does anyone know if I have to pay tax on cash coming in to the UK ????
No, but you would have to pay tax and a penalty here. The law makes them withold taxes unless it is a rollover to another 401k or IRA.
what about the other way, what if for some unknown reason, like I HATE IT HERE, I empty my 401k's and head home to blightly, does anyone know if I have to pay tax on cash coming in to the UK ????
No, but you would have to pay tax and a penalty here. The law makes them withold taxes unless it is a rollover to another 401k or IRA.
Yep, but if I left this wonderful place and never came back, it wouldn't be an issue now would it :smile:
Yep, but if I left this wonderful place and never came back, it wouldn't be an issue now would it :smile:
:???: do you get a choice not to pay the taxes? -I got the impression they take it from your money before they hand it over......
Anyway eeb, isn't life better for you over there in California, now you've escaped the mormons?
Yep, but if I left this wonderful place and never came back, it wouldn't be an issue now would it :smile:
:???: do you get a choice not to pay the taxes? -I got the impression they take it from your money before they hand it over......
Trust me they do, but if you continue living and working in the US there's a pretty good chance they'll charge you additional tax on your return. If however you were to empty your 401k and move over to the UK it would be in your best interest to file your taxes in the US even if you never plan on returning. If you do you could see a large chunk of that penalty money come back to you. I'll try to explain it with my limited tax knowledge, but do consult an accountant before taking any of my advice.
Essentially they tax that withdraw with penalties and the expectation that you will finish out the year at your present salary in the US. I moved to the UK in July of 2000 and quit my US job and cashed out the 401k in June of that year. I assumed I'd never move back and decided not to file because I had no intention of paying Uncle Sam a further penny in tax. When we moved back, I had to get current on my tax returns and much to my chagrin I found out that I would have recieved a $3000 return had I filed! It still hurts to think about it. It's funny how they will charge you interest on the money you owe them, but you can only claim money owed you for two years! :evil: As I understand it it all depends on when you cash out and when you leave your job and the UK tax season.
FYI - If you move back to the UK for longer than 1 year, the INS will revoke your greencard, incidentally, the IRS will not and expect you to file US tax returns for the length of the 10 years of the green card, irrespective of whether or not the INS have revoked it.
Anyway eeb, isn't life better for you over there in California, now you've escaped the mormons?
Yes, Califoniaaayyy is much better than Utah and I very much like it here, but it wouldn't matter if I was in the garden of Eden, home is home, family is family, 'tis the way of things.
Yep, but if I left this wonderful place and never came back, it wouldn't be an issue now would it :smile:
:???: do you get a choice not to pay the taxes? -I got the impression they take it from your money before they hand it over......
Trust me they do, but if you continue living and working in the US there's a pretty good chance they'll charge you additional tax on your return. If however you were to empty your 401k and move over to the UK it would be in your best interest to file your taxes in the US even if you never plan on returning. If you do you could see a large chunk of that penalty money come back to you. I'll try to explain it with my limited tax knowledge, but do consult an accountant before taking any of my advice.
Essentially they tax that withdraw with penalties and the expectation that you will finish out the year at your present salary in the US. I moved to the UK in July of 2000 and quit my US job and cashed out the 401k in June of that year. I assumed I'd never move back and decided not to file because I had no intention of paying Uncle Sam a further penny in tax. When we moved back, I had to get current on my tax returns and much to my chagrin I found out that I would have recieved a $3000 return had I filed! It still hurts to think about it. It's funny how they will charge you interest on the money you owe them, but you can only claim money owed you for two years! :evil: As I understand it it all depends on when you cash out and when you leave your job and the UK tax season.
oooo, thats useful, thanks. :smile: