I am a UK citizen who is almost through to the end of the US immigration process (I am currently awaiting my citizenship test date) and my spouse and I fancy the idea of moving back to the UK for a few years.
I have been trying to figure out if we have to pay US tax on any income earned while in England (such as employment income tax, share sales, any money we may make from the future sale of any property).
If anyone has any advice or experience of how difficult or easy it is to file taxes from London, I would be very happy to hear about it.
Thanks
Mark
I don't know much about this, but I do know you are liable for US taxes if you are a US citizen, where ever you live. I THINK this also applies to perm residents (and would imagine it would be important if you wanted to make sure you did not jeopardize your application). That's the bad news, but the good news is you should be able to get a Foreign Tax Credit, which, I think, offsets US taxes, for everything you pay in the UK. Assuming UK taxes add up to more than US, you may end up being off the hook (although you must still file a return). Make sure, however, you check with accountants and/or lawyers knowledgeable about US taxes and foreign taxes before you do anything, DO NOT assume I know what I am talking about! Hope this helps.
The skinny is, you get a credit for taxes paid to the UK while living and working in the UK. Chances are this will wipe out any USA taxes on this income. If you sell a home in the states you have to pay taxes in the US. The tax laws are very complicated and I suggest contacting a CPA that specializes in US citizens working abroad prior to your leaving. Once in the UK, you can send him or her all the papers and it can be prepared and sent back to you for signing and mailing. Good luck grin
On 2002-07-08 12:28, quattromark wrote:
I am a UK citizen who is almost through to the end of the US immigration process (I am currently awaiting my citizenship test date) and my spouse and I fancy the idea of moving back to the UK for a few years.
I have been trying to figure out if we have to pay US tax on any income earned while in England (such as employment income tax, share sales, any money we may make from the future sale of any property).
If anyone has any advice or experience of how difficult or easy it is to file taxes from London, I would be very happy to hear about it.
Thanks
Mark
Hi Mark
Your tax status for the US is dependant on how long you have lived within the US. If you lived outside the US for more than 183 days (assuming your spouse is NOT a US citizen or resident) you are taxed as a non resident and only taxed on US source income.
email me private with more details and I will be pleased to give you tax advice. I can either advise you how to prepare a tax return or recommend UK based tax preparers who know about US tax.
Regards
Paul
<font size=-1>[ This Message was edited by: Austin Powers on 2002-07-09 00:53 ]</font>
On 2002-07-08 14:52, nmills1757 wrote:
The skinny is, you get a credit for taxes paid to the UK while living and working in the UK. Chances are this will wipe out any USA taxes on this income. If you sell a home in the states you have to pay taxes in the US. The tax laws are very complicated and I suggest contacting a CPA that specializes in US citizens working abroad prior to your leaving. Once in the UK, you can send him or her all the papers and it can be prepared and sent back to you for signing and mailing. Good luck :grin:
The problem with Tax credits is that they do not always fully cover your US liability on foriegn earnings. There are better means of dealing with foriegn earned income than using the tax credit. If you use a CPA, make sure that they fully understand the tax treaties. CPA's are very expensive and I am not sure are worth the money. Get a quote or estimate from your local H&R Block Premium office and compare with your CPA.
Paul