US / UK / New Zealand tax issues - yikes!

Hi everyone,
I am a US citizen, and have lived in the UK for 4 years (on a work permit, so not UK resident in terms of immigration, but UK resident in terms of tax).

I am engaged to a dual UK / New Zealand citizen who also lives in the UK.

In the next couple of years we plan to move to New Zealand to settle permanently.  In the mean time, we are saving, investing (primarily in NZ at this stage, although I have a group pension plan in the UK and a cash ISA) and trying to figure out the best way of dealing with our money.

It seems that accounts in our joint names anywhere in the world once we are married will be potentially within the grasp of the IRS (which I wrongly thought his assets would be exempt as he is neither a US citizen or has ever lived there).

My head is spinning, and I am afraid to make the wrong choices re: money / tax and get screwed.  I want to try and figure out the best way to go about saving and investing, considering all 3 countries taxes so that we don't have big issues later on.

What are the chances that anyone knows of a UK / US / New Zealand tax specialist???

Pretty slim I am guessing.

Anyone in the tri-citizenship tax situation that would like to share their strategies?

Thank you!
Katie

Only foreign earnings need to be reported to the IRS.

As far as your foreign investments, any account that you have control or interest in needs to be reported to the IRS.  Now it doesn't mean you will be taxed, but you have to report it.  Any foreign US tax specialist should be able to help you.

Now UK/NZ taxes are very similiar.  While I know UK taxes are only on funds remitted in the UK, and I think NZ is the same, you might want to check, so basically both you and your fiance will only be taxed on funds remitted to which ever country.  This does mean you do need to consider where to put your money, because if you move it from the UK to NZ you might get some taxes and other problems that you could avoid if you planned ahead.

Personally, my two pennies on the topic are find a UK/NZ investment specialist and then study up on the foreign concequences for the US.  While the IRS likes to stick their nose in everything, it doesn't matter where you are and is the same in most of the world (except when it comes to Treaty issues for government pensions)...

There are tri- quintuple- octi- deci-specialists out there.  They're called the Big 4:  Earnst & Young, Deloitte Touch, KPMG, & PriceCoopersWaterhouse.  They have specialists in every country, and love to take on cases like yours.  They'd assign a topnotch team of UK, US, and NZ guys to co-ordinate your advice.  If between the two of you, you earn a mid to high six-figure salary, it'll be well worth it to take that route.

If you're not in that income bracket, their price tag will be too expensive.  In that case, I'd hire a dual qualified specialist (US/UK, US/NZ, or NZ/UK) and hire a second expat specialist for the third country; or hire three expat specialists.  This will cost you far less, but you will need to do the co-ordinating of the advice yourself.  It may make sense to have the specialists either meet with you at the same time or else arrange a teleconference call, so that they can feed ideas off each other and get a synergisticly whole solution that's better than any of them could come up with on their own.

I think there are some misunderstandings here:

1. The UK and NZ do not have similar tax systems.  For example the UK taxes capital gains while NZ does not.
2. You need primary advice from a US specialist so you avoid issues such as NZ trusts.
3. Since you are not UK domiciled you both already have significant tax savings opportunties.

1. The UK and NZ do not have similar tax systems.  For example the UK taxes capital gains while NZ does not.

Well, that is all a matter of perspective.  Meaning compared to the US, they are a bit more similiar, the tax brackets and amounts are similiar, the tax year is the same, the way the taxes are paid is similiar, VAT, etc etc etc are far closer between the UK/NZ then the US, but it is a valid point that nothing is every too similiar not to seek advice.

Thanks guys,
I actually work for a big 4 but unless you know someone, everyone needs a charge code to charge their time to, so they won't help me.

Guya - I thought the issue of domicile was only relevant for IHT purposes. But I am probably confused?

I probably won't be doing much investing in the UK I guess, as the taxes are quite high, but I do put a small amount into an ISA and have a group pension plan with my employer (they also put in money as well).

It sounds like the best option may be what was suggested re: having a few tax specialists - but I can imagine that costing a lot of money! I guess maybe the best thing would be to figure out some investments etc that I want to do and then find out the tax consequences - ie a more specific scenario.

I really hate the fact that the IRS wants to know how much I am making and would like to have to report as little as possible. It just makes me suspicious - like why do they want to know that info if they never plan on using it?

I guess maybe the best thing would be to figure out some investments etc that I want to do and then find out the tax consequences - ie a more specific scenario.

It may make more sense to start with what is the consequence of twenty options, and whittle it down from there.

I have a guide to US taxation of non-US investments I could let you have.  That will narrow down your list, then you can take your narrowed down list to the UK and the NZ specialist to narrow down further...

Regarding the US wanting to know so much and the sinister possibilities:  If you recall your history, Al Capone was caught not on racketeering charges but on tax evasion.  The purpose of all these fines and penalties isn't to creep up and bite KatieKins, it's to whollop the folks who are terrorists, drug lords, Mafioso, and other miscreants who manage to weasel out of every other charge against them.  The fact that Katiekins and the whole of the law abiding US population gets caught in the wake of the bombshell doesn't seem phase the IRS.