Hiring UK/US accountant

Hello, I'm planning my move to the UK and trying to nail down some important detail about finances and taxation. I'm thinking of hiring an accountant to try to minimize our future tax expense since there are a variety of things I'm unsure about...joint bank account, owning property, retirement options etc. I've contacted one fellow from British expats tax...I'm not really sure what qualifications I'm looking for, but he has offered an initial Skype consult to answer questions and make recommendations on my situation plus free future inquiries over email for $525. Is this a good price?? This seems a lot...(especially after the constant stream of expenses from visa, moving, flights etc) ....but this is my first inquiry so I don't really have a sense of what these things cost yet. Have any of you hired accountants or tax attorneys to give you advice? Any recommendations about what qualifications to look for and what price points should be? At this point I'm just looking for initial information help us position our assets in the most favorable way...and tax prep maybe later down the line. Any thoughts? Thanks!

.....for $525. Is this a good price?? This seems a lot....

I'll leave comments on pricing to others. Such sincerity. Such innocence.

Pete Newton (BritishExpats Tax) has a good reputation on other expat sites. I can't vouch for him as I've never employed him. I believe he's based in the US.

You may be interested in Guya's response to your questions regarding hiring US/UK qualified accountants on this thread:

http://talk.uk-yankee.com/index.php?topic=79648.0

Yes check out the link that OAP quotes.

One difficulty is to get "integrated" advice; advice that covers tax in both countries and also investments, pensions and money management. An advisor might be qualified to give you tax advice, but not to give you investment advice and the international finance world is full of complicated and expensive solutions.

To assess any advise it's important to go in with a reasonable knowledge of what you are talking about, so use this forum to ask any questions you have. There are helpful professionals and enthusiastic amateurs who have been through the process already and will be happy to answer your questions. You mention wanting to position your assets in a favourable way. I don't know your level of investing sophistication, but I'd recommend that all US citizens moving to the UK open an investing account with Vanguard before they move so they can invest inexpensively in Vanguard ETFs which are easy to deal with for both US and UK taxes. If you have US retirement accounts I'd just leave them where they are.

Good advice, I'll ask some questions then and see what you guys come up with. I actually got that guy's name from the previous post references, so I'll check out the other 2 before I decide. Got an account with Vanguard already, that's where my Roth is, so I'm thankful for that because I've heard it can be difficult to open new accounts once overseas.

Great to hear you already have a Vanguard account.

The ROTH is an excellent account to have for the US/UK person because it's gains and all withdrawals are tax free in the US and the UK under the US/UK tax treaty. Also if you use the foreign tax credit rather than FEIE when you do your taxes, so that you still declare income on your 1040, you can continue to make ROTH contributions while in the UK.

If you have other US retirement accounts like 401k, 403b etc you can leave them where they are if you like your company plan as the gains are also tax free in the US and the UK under the treaty. As a general investment principle though you might want to look at rolling them over to a Vanguard IRA as the fees will probably be lower.

If you have after tax money to invest I'd open a Vanguard Brokerage account and put it in Vanguard ETFs as these are HMRC reporting funds and you'll be able to claim all the usual UK capital gains allowances etc on them, and they obviously are easy to deal with on you US taxes.

In the UK, as a US citizen, you are basically limited to investing in savings accounts, cash ISAs (although you have to pay US tax on any ISA interest) and individual stocks and bonds. Avoid all UK mutual fund type investments. If your husband is a UK citizen only it might be best to avoid co-mingling of assets so that he and can freely invest in the UK and avoid any US tax compliance issues.

UK pensions are a perennial issue with the complications coming from whether the various UK defined contribution type plans are covered under the treaty or not. This is the area where professional advice is probably most necessary.

Thanks nun for all that, very informative! My husband does have a pension and is just a UK citizen...are you saying he could still be subject to tax? Surely not until he withdraws on the pension though...from what you're saying, it almost sounds like we should invest in the US accounts through me and any UK investments through him, and not create too many joint accounts. I am wondering how this looks on future settlement visa apps though...like maybe we're not comingled enough to look like a legit couple? Maybe there's a balance, like keep savings and checking joint but investments entirely separate? What do you think? Also, do you know if as a married couple we will be able to contribute double to my Roth (11k?)...or would he need a separate account which will be impossible to establish without a US residence. I don't have a 401k, is it possible to open a regular IRA with UK earnings? You sound so knowledgeable! Do you do your own taxes or hire someone?

Thanks nun for all that, very informative! My husband does have a pension and is just a UK citizen...are you saying he could still be subject to tax? Surely not until he withdraws on the pension though..

It all depends on what type of UK pension your husband has and on the interpretation of the treaty and whether you file jointly. If you file separately and you keep your husband from having a US tax liability the pension will not be an issue. If you file jointly you will have to deal with your husband's assets for US tax purposes, including the pension. If the pension is a company final salary pension it is covered by the treaty and there will only be UK and US tax to deal with when income is taken. If the pension is a defined contribution or personal pension the opinions on how current gains are treated on US taxes differ amongst professionals with the most conservative taking the position that a they are a foreign trust under IRS rules and must be taxed as such.

.from what you're saying, it almost sounds like we should invest in the US accounts through me and any UK investments through him, and not create too many joint accounts.

That would certainly be the simplest, but it might not be psychologically the way you want to organize your finances and also might not be the most tax efficient.

I am wondering how this looks on future settlement visa apps though...like maybe we're not comingled enough to look like a legit couple? Maybe there's a balance, like keep savings and checking joint but investments entirely separate? What do you think?

I don't really know enough to comment

Also, do you know if as a married couple we will be able to contribute double to my Roth (11k?)...or would he need a separate account which will be impossible to establish without a US residence. I don't have a 401k, is it possible to open a regular IRA with UK earnings? You sound so knowledgeable! Do you do your own taxes or hire someone?

I just looked up the ROTH contribution limits for married filing separately and I was amazed to see that if you have over $10k in AGI you can't contribute anything, but if you are filing jointly you could contribute up to $11k (ie 2x $5.5k)

http://www.irs.gov/Retirement-Plans/Plan-Participant,-Employee/Amount-of-Roth-IRA-Contributions-That-You-Can-Make-for-2012

So there's an argument for filing jointly, even if it does make things complicated. The difficult thing to gauge is just how much you want to spend and how complicated you want to get in order to get the most efficient arrangement. Are the fees you pay a professional going to be worth the tax savings and the complexity. I'd advise you not to get involved with any planning or investments or tax arrangements that you do not fully understand yourself. You might want to pay someone to do you taxes to save you time and trouble, but I think you should feel that if you had to you could do it on your own with enough time.

I am a US/UK dual citizen still in the US and I do all my own investing and taxes. I am planning on returning to the UK some day so I have re3searched what I should do to make my taxes and finances relatively simple.

Some basics:

IF your husband is a true NRA (not a US citizen, no green card or expired green card, etc.) then filing jointly means you both must file an election for him to file jointly with you with the IRS. Once you do this, he will be required to file a US tax return thereafter, unless you void the election (a once in a lifetime act). Under the election, you can file jointly, or, in any given year, file separately. If, while the election is in force, you chose to file separately, your husband IS REQUIRED to file a separate US return for that given year to the IRS as well.

In addition to a pension, does your husband have a stocks and shares ISA? Does he have funds with a bank/building society in an account that utilises managed mutual funds? Will he win the lottery? ( ) And on, and on. Carefully weigh the short term advantages of filing jointly against longer term realities. Will he ever form a partnership in his business? Is he self employed? Will he ever have an inheritance from UK sources?

Also, you mentioned putting your name on the title to a residence. There's no problem with this, but check with a UK advisor as to the consequences (re: inheritance tax issues) of a non-UK person, either with 'joint tenant' or 'tenant in common' should the worst occur.

Some basics:

IF your husband is a true NRA (not a US citizen, no green card or expired green card, etc.) then filing jointly means you both must file an election for him to file jointly with you with the IRS. Once you do this, he will be required to file a US tax return thereafter, unless you void the election (a once in a lifetime act). Under the election, you can file jointly, or, in any given year, file separately. If, while the election is in force, you chose to file separately, your husband IS REQUIRED to file a separate US return for that given year to the IRS as well.

In addition to a pension, does your husband have a stocks and shares ISA? Does he have funds with a bank/building society in an account that utilises managed mutual funds? Will he win the lottery? ( ) And on, and on. Carefully weigh the short term advantages of filing jointly against longer term realities. Will he ever form a partnership in his business? Is he self employed? Will he ever have an inheritance from UK sources?

It can be a lot of trouble for the UK resident to organize their finances for US tax purposes when they are obviously organized according to UK rules. SIPPs, endowment mortgages and stocks and shares ISAs would all be troublesome and if they are self-employed it just gets more complex. If someone is coming to the USA they are probably motivated to get things organized, but to have to do all that because your spouse is a US citizen can just seem like an imposition and more trouble than it is worth. If you decide to file "married separately" and save your husband the trouble of US tax compliance you will still have to deal with US tax and reporting on any accounts that you hold jointly with your spouse and you should avoid jointly holding "toxic US tax assets" like any UK mutual funds.  It's something that you need to discuss with your husband as well as an advisor.  Here is an overview of the situation for bank accounts, see Example 3, p.5

http://woodllp.com/Publications/Articles/pdf/Who_Pays_Tax_On_Joint_Bank_Accounts.pdf

Julia, if you're still with us, nun has given you some very important points for consideration over the past few posts. These are not meant to overstate the problems of being a US Person resident in the UK. There is much that needs consideration, and only you will know how you want to proceed. There are arguments for and against all aspects (and more) of what we have covered. Which will be correct for you depends entirely on your own situation.

Undoubtably you understand that filing returns when any type of UK investments are involved is not as simple as going down to the local H&R BLOCKs to have a passable return prepared. You must have a reasonable understanding of the Code yourself, or be prepared to pay someone to prepare a return for you. That brings us back to your original post.

There are several (internationally) highly respected dual US/UK professionals who do, or have, contributed to this site. The US Code is incomprehensible on many issues. Even those professionals may at this moment have client cases in which they are not 100% sure of how to make a correct filing. They earn their pay because they are ultimately liable for the correct filing.

In my humble guess, a senior adviser in a reputable dual qualified firm would expect at least £250/hour ($380) for their time with a like amount charged per hour for tax preparation.

Someone with a basic income (below the FEIE) and a small amount of interest from bank accounts could prepare their own taxes, or use TurboTax. If they have a much more complicated return containing the possible situations we have discussed, they will need to spend a sufficient amount of time reading and researching in order to even understand what is involved in the return preparation. At this point, TurboTax relies on the taxpayers knowledge of what needs to be included on the return. This is why those that can afford it use the professional preparers.

Simple US returns are not rocket science. More complicated US returns (with the understanding of impact on UK returns) borders closely on rocket science. The US tax code can be unnavigatable waters. There are no US/UK dual qualified cut rate tax preparers in the UK that I've found.       

Julia, if you're still with us, nun has given you some very important points for consideration over the past few posts. These are not meant to overstate the problems of being a US Person resident in the UK. There is much that needs consideration, and only you will know how you want to proceed. There are arguments for and against all aspects (and more) of what we have covered. Which will be correct for you depends entirely on your own situation.

Undoubtably you understand that filing returns when any type of UK investments are involved is not as simple as going down to the local H&R BLOCKs to have a passable return prepared. You must have a reasonable understanding of the Code yourself, or be prepared to pay someone to prepare a return for you. That brings us back to your original post.
   

Julia has done the most important thing by realising there are issues and asking questions. There are some simple steps you can take to simplify US tax filing and avoid excessive US tax compliance costs and paying a professional to solve problems that could have been avoided by some planning.

In general I would keep your finances as separate as possible from your husband's. Your husband will love you all the more for shielding him from the IRS. Money is a delicate thing in marriage and many couple see mixing finances as all part of the deal, but marrying an NRA has it's special complications so it's vitally important to be even more open and frank about this subject with your spouse.

Wow thank you nun and OAP, you both have given me a dozen leads for things I'll need to look into further. I think we always knew it would be complicated, but yes, it seems even more so than I expected. I think it could be worth getting some professional advice to just set us in the right direction, and as you say nun, I should understand everything and feel capable of handling my own tax return if I had the time. I guess I'll need to come up with a thorough list of questions I'll need answered before the consult.
One more question, you both seem really knowledgeable on investing, both in the U.S. and U.K., and in finance in general. Where did you accumulate all that knowledge? I want get a start on learning all this stuff especially on finances in the U.K as I have no idea how things work over there. Any books, websites in particular or other media that you can recommend? Something basic to medium intensity at this point. Thank you both for all your help!!

I want get a start on learning all this stuff especially on finances in the U.K as I have no idea how things work over there. Any books, websites in particular or other media that you can recommend? Something basic to medium intensity at this point. Thank you both for all your help!!

For general investing principles I would look at

http://www.bogleheads.org/wiki/Main_Page

As you already have a Vanguard account you are probably familiar with John Bogle's approach towards investing. The wiki gives a good overview of what I think is a sensible approach to investing, then check out the various forums at

http://www.bogleheads.org/forum/index.php
http://socialize.morningstar.com/NewSocialize/forums/default.aspx

This will give you a good foundation to assess the UK money world. You can ask your husband too, although for many it's not a topic they know much about and probably want to talk about even less.

You can learn about the various UK financial products by going to

http://www.fool.co.uk
http://www.telegraph.co.uk/finance/personalfinance/
http://www.guardian.co.uk/money

then check out the various bank and building society websites.
http://www.halifax.co.uk
http://www.barclays.co.uk

You will want to avoid all mutual fund type products, so concentrate on current ( checking) accounts, saving accounts and cash ISAs. Anyway UK funds usually have far higher fees than the Vanguard ETFs that you'll have access to because of your existing Vanguard account. If you are taxed in the UK on a remittance basis, and don't bring any money into the UK, you'll be able to invest in any US fund without any nasty UK tax consequences, but to be safe I'd stick to the Vanguard ETFs as they are HMRC reporting funds. For comparison here are a couple of UK fund/broker sites

http://www.hl.co.uk/
http://www.fidelity.co.uk
http://uk.virginmoney.com/virgin/

Most people in the UK are not very sophisticated when it comes to investing so they'll have an ISA and a pension and that's about it and they don't really understand the importance of fees and asset allocation.

Like you I'm a US citizen and when I go back to the UK I plan to keep all my investments in US Vanguard ETFs and US retirement accounts to simplify my taxes and take advantage of the lower fees. I'll have US and UK checking accounts and I might build a UK based cash ISA savings ladder to have some funds in pounds earning a bit of interest. Of course I will carefully watch the accounts so that I fulfill the foreign account reporting requirements of FBAR etc. But I will avoid all UK mutual funds and only have money in simple UK checking or interest bearing savings accounts.