Paying UK taxes while living in the US???

[lizaanne 0]

I know that if I (a USC) where to move to the UK and work I would still have to pay US taxes. Does that hold true for my UK husband? Does he need to continue to pay UK taxes while he is living in the US? I don't want us to get into any messy tax situation if we decide to move there in the future.

Thanks!

~Liza

[Girona40 0]

I know that if I (a USC) where to move to the UK and work I would still have to pay US taxes. Does that hold true for my UK husband? Does he need to continue to pay UK taxes while he is living in the US? I don't want us to get into any messy tax situation if we decide to move there in the future.

Thanks!

~Liza

Why would you have to pay US taxes if you were a resident of the UK? Are you talking about PP tax or income tax?

[Trompe le Monde 1,107]

US citizens resident abroad are liable for US taxes for income over $80k.

I don't believe the same holds true for UK citizens resident abroad.

[Girona40 0]

US citizens resident abroad are liable for US taxes for income over $80k.

Can you tell me where you find this information?

It seems strange that if you live in the UK, you work in the UK, you pay UK p.a.y.e. taxes, etc. that you have to pay tax in the US, simply because you are a citizen.

[Trompe le Monde 1,107]

it's here:

http://www.irs.gov/publications/p54/ar01.html

Foreign earned income exclusion and housing exclusion and deduction. Chapter 4 discusses income tax benefits that apply if you meet certain requirements while living abroad. You may qualify to treat up to $82,400 of your income as not taxable by the United States. You may also be able to either deduct part of your housing expenses from your income or treat a limited amount of income used for housing expenses as not taxable by the United States. These benefits are called the foreign earned income exclusion and the foreign housing deduction and exclusion.

Like all things concerning the US government, it's complicated.

[Girona40 0]

it's here:

http://www.irs.gov/publications/p54/ar01.html

Foreign earned income exclusion and housing exclusion and deduction. Chapter 4 discusses income tax benefits that apply if you meet certain requirements while living abroad. You may qualify to treat up to $82,400 of your income as not taxable by the United States. You may also be able to either deduct part of your housing expenses from your income or treat a limited amount of income used for housing expenses as not taxable by the United States. These benefits are called the foreign earned income exclusion and the foreign housing deduction and exclusion.

Like all things concerning the US government, it's complicated.

From reading this particular section it appears that this is something that is applicable to persons who reside in a foreign country for longer than a US tax year and then return to the US. This is not applicable to someone that immigrates "permanently to the UK.

"Yes. You CAN claim the foreign earned income exclusion and the foreign housing exclusion or the foreign housing deduction."

As I understand it, this is where you can claim a benefit from the US government against your housing costs abroad.

About Taxes

the US imposes tax on worldwide income, regardless of country of residence. It *is* possible to alter this state of affairs, but the law requires you to resign US citizenship and bans you from ever returning to the United States again."

US imposes tax on worldwide income

I am both a USC and a UKC and I haven't lived in the UK for five years, don't own property there, and am not required to pay any taxes in the UK for what I earn/own here.

[Trompe le Monde 1,107]

I guess if one returns to the UK for good they never have to worry about it. Of course, you never know what life will hold and if you thought for any reason you might return you probably want to think about being up to date on your tax returns. And you are supposed to fill out the tax returns even if you don't have to pay US tax, or so I had been informed.

[Kez/JWolf 6]

UK citizens are not liable for UK tax if they do not live and work in the UK... if you leave a UK bank account then any money in it will be taxable or if you still have property you will still have to pay council tax and if you rent out your property you would be liable for tax on the income from it...

But for most people they are not required to pay any tax once they have left the UK..

Kez

[lizaanne 0]

Thanks much! I thought this was the case, but wanted to make sure. He doesn't have anything but a credit card and bank account there, so we should be ok.

~Liza

[Joey559 1]

US citizens resident abroad are liable for US taxes for income over $80k.

Can you tell me where you find this information?

It seems strange that if you live in the UK, you work in the UK, you pay UK p.a.y.e. taxes, etc. that you have to pay tax in the US, simply because you are a citizen.

Its VERY TRUE. As long as you are a US citizen, even living on foreign soil you have to submit a tax return showing your foreign earnings. Good news is by the time you show your foreign deductions/costs of lviing you end up not having to owe in most cases but you still must file a return until you give up your US citizenship!

[Girona40 0]

I guess if one returns to the UK for good they never have to worry about it. Of course, you never know what life will hold and if you thought for any reason you might return you probably want to think about being up to date on your tax returns. And you are supposed to fill out the tax returns even if you don't have to pay US tax, or so I had been informed.

Yup! That's what I have read too. That if you are a USC you are required to file a US tax return every year. I guess if you did want to return to the US to live at any time in the future it would be a good idea to comply! lol

Personally, if we are to return to the UK, which may be our only option to remain together as a family, I wouldn't ever want to return here, so they wouldn't get one from me.

We were talking about "unlawful presence" with an attorney/ex.congressman the other day and he was really pressing the point that this was something we needed to avoid at all costs, to avoid my son receiving a bar from re-entry to the US. I said "Do you think, that if my son is deported from this country, when he has done nothing wrong, that any of us would ever want to set foot in this country again?" He didn't seem to get it!

If we are given no choice but to return to the UK, I would renounce my US citizenship in a heartbeat. Uncle Sam is getting nothing from me if he can't give my family what they are rightfully entitled to.

[Lansbury 19]

UK citizens are not liable for UK tax if they do not live and work in the UK... if you leave a UK bank account then any money in it will be taxable or if you still have property you will still have to pay council tax and if you rent out your property you would be liable for tax on the income from it...

But for most people they are not required to pay any tax once they have left the UK..

Kez

The UK and USA have a reciprocal tax agreement. You can choose which one to pay tax in. So if you live in the USA and have income in the UK you can in fact choose to pay the tax on it in the USA, you cannot be taxed on it twice.

Like all rules there are some exceptions. I am in receipt of a UK government pension and the rules say I must pay tax on it in the UK, but then the IRS exempt me from tax on it in the USA.

It normally pays to opt to pay tax on any UK income in the USA as the tax rate usually works out to be less but individual circumstances mean these things need to be checked carefully. We took professional advice before leaving the UK.

[MichelleandCraig 1]

I think that totally stinks. I can't believe (well, I do..just an expression!) that if I went to live in the UK, I would have to file tax returns HERE for the rest of my life!! (because I would never, ever, for any reason, give up my US citizenship, no matter how fantastic I thought the UK was...I would always want to be duel.)

Bad enough to have to do them living here!!! Really though, that stinks. M.