US Citizen Relocating to UK for Two Years - Tax Liability?

Hi all!  First of all, thank you for being such a great resource!  There has been a lot of helpful information on this board that has made the discussion with my family and potential future employer very good so far. 

I was hoping someone can take the time to fill me in on a few things particular to our situation in order to better gauge the impact on our life (monetarily) if we make the move.  Summary & questions below! 

- Wife and I are looking to move to the London as "locals" for our company (no kids)
- Combined salaries would be approximately 250k pounds
- We still in our 30's
- We would want to contribute 10-15% of our income to a retirement account
- We plan to stay for approximately 2 years
- We would still own a home in the US (can't sell it due to a heavy loss)

Questions:
- Given the above, would we be considered Residents but not Domiciled in the UK?
- Who would we pay taxes to given our HMRC status (probably both, but what is the exemption, threshold and credit particulars)?
- What are the tax "gotcha's" we need to watch out for (double taxation, etc)? 
- Can someone do an estimated tax workup on what we should expect to pay in taxes to both the US & the UK so we can accurately forecast our "net" to determine if this makes sense for us?

Really looking forward to getting to know this stuff so I can help others on the boards.  Cheers!

This should help you figure out your take home pay for a start:

http://www.listentotaxman.com/index.php

You will pay UK tax and you will still need to file a US tax return.  There is a tax treaty and you shouldn't be double taxed.  In general, you will pay tax in the country that has the highest tax rate on your salary which given your estimated salaries will probably be the UK.

At your level, you should definitely ask for professional tax help as part of your package.

The treaty is of little assistance because of the saving clause which saves the right of the United States to tax its citizens as if the treaty did not exist.

You will need advice on pensions, structuring of bank accounts and investments, State taxes and a host of other things.

Use a dual qualified US/UK professional to advise you.

As a US citizen the US will continue to tax your worldwide income, but you will be able to exclude ~$93k of foreign earned income or take foreign tax credits. How you will be taxed by the UK will depend on your residency and certain choices you make. Here is a nice flow chart to find out whether you will be taxed by HMRC on a remittance or arising basis.

http://www.hmrc.gov.uk/nonresidents/flowchart.pdf

You'll be taxed by the UK and US on any UK source income and as a UK resident the UK will generally have the primary taxation rights, but the tax treaty will determine the proportional amounts to pay on various types of income.

Given the limited time that you intend to be in the UK and the possibility of being taxed in the UK on a remittance basis I would keep as much of your finances in the USA as possible and look into US based retirement savings, if you are paid by a US company you should be eligible for the company retirement plan. There is some opportunity to build up a US tax free basis in a UK pension plan by using excess foreign tax credits, but I'm not sure if it's worth it if you'll only be in the UK for 2 years and it would take professional advice to make sure you avoid US tax pitfalls like PFIC.

What has your company told you about payroll taxes? ie SS and medicare vs NI.

Here is some light reading for you

https://www.deloitte.com/assets/Dcom-Austria/Local%20Assets/Documents/GlobalEmployerServices_Tax%20Planning%20for%20US%20Executives.pdf