US - UK Dual Citizen UK tax issues

My wife and I are UK/US dual citizens. We have just retired and moved back to the UK after 33 years in the US. We have filed our 2015 US taxes successfully but can't get answers/guidance on our UK tax situation. HMRC just refers me back to their website which doesn't appear to have the information I need.  Can't believe we are the first people in this situation, but nobody seems to be able to provide answers.

I think you would have to set out your specific questions in more detail if you wish to find help here. Otherwise, a tax accountant would be likely to be able to help with answers. HMRC do have help pages for "Tax if you return to the UK", https://www.gov.uk/tax-return-uk

My wife and I are UK/US dual citizens. We have just retired and moved back to the UK after 33 years in the US. We have filed our 2015 US taxes successfully but can't get answers/guidance on our UK tax situation. HMRC just refers me back to their website which doesn't appear to have the information I need.  Can't believe we are the first people in this situation, but nobody seems to be able to provide answers.

Hi Confused US, Welcome to the forum. 

I'm not one of the tax experts here but I'll tell you what worked for us.

I (UKC) had been a dual resident US/UK for the last few years and had myself already set up with self assessment.

When husband (USC) and I moved over together permanently, I wrote a letter to HMRC informing them of the fact that he was now a UK resident. They wrote back asking for details of his income which I then supplied.

The letter I got in response to that was very helpful and basically told us what we needed to do for his return.

At that time it was taking about 6-8 weeks to get a reply.

You can do it all online, I think. You can certainly file online but I feel much more comfortable with paper returns.

I agree with RW, that you may need to be more specific with your questions so that people here can better help you. 

My wife and I are UK/US dual citizens. We have just retired and moved back to the UK after 33 years in the US. We have filed our 2015 US taxes successfully but can't get answers/guidance on our UK tax situation. HMRC just refers me back to their website which doesn't appear to have the information I need.  Can't believe we are the first people in this situation, but nobody seems to be able to provide answers.

If you describe the sources of your income we can try to give you an overview of how you might pay your taxes. HMRC will be your primary taxation authority if you live in the UK permanently and in most cases (but not all) you will pay the UK first on your worldwide income and then claim US tax credits or treaty exemptions to reduce your US tax bill. You cannot correctly file your US taxes without having a good idea of your UK tax obligations as the two returns are interdependent.

I can only repeat what the others have said, but the following may help to get you started:

https://www.gov.uk/self-assessment-tax-returns/overview

https://www.gov.uk/tax-foreign-income

https://www.gov.uk/register-for-self-assessment

From your brief comment, I would make the following (possibly incorrect) assumptions:

1. You will be resident permanently in the UK.

2. Since you lived in the US for 33 years, a portion of your retirement income will come from the States in some form. This is deemed 'foreign - untaxed' (for UK purposes) income, hence the requirement to file a self assessment form.

3. Since you are retired, you will no longer receive any 'earned' income for US tax purposes. This means disregarding anything you hear about filing US tax forms from abroad using the FEIE (Foreign Earned Income Exclusion). Retirement income will likely be 'unearned' income for the US, and you will need to study FTC (Foreign Tax Credits - Form 1116).

4. When you arrived in the UK will be important as to which UK tax year will be your first, and therefore when registration is required with HMRC as well as your first SA return.

5. Given 3 and 4 above, your first year of filing for the US may require some thought, or the filing of 'extensions'.

6. There are some traps in this situation. See Form 8965, and when you will qualify for the exclusion on US health care.

Lot's to discuss, but it all falls into place eventually. Being retired during those first few years of dual taxation, instead of employed, causes some careful consideration.

This may also help for US filing from abroad:

https://www.irs.gov/publications/p54/

For the UK, there is some 'good news' as well, so stand by and let us know a bit more detail of your situation.