Large Future Earnings

Hi All,

This is a question about future earnings and tax (from a complete newbie on the subject).

I have dual nationality, and have lived here most of my life for the past 30 years.

I am currently earning an average amount in the UK, and although I file with the IRS in addition to HMRC, I've never had to pay any extra to them in addition to my UK payments.

My question is, if I am successful in my career and begin to earn say in excess of £100-200k or equivalent, does the tax agreement still hold in the same way or would I be double taxed after a certain point?

The reason I ask is that I've been tentatively thinking about moving to the USA anyway to be closer to family and experience the life out there. The work I do is literary so could be done from either UK or USA.

Thank you for your help, any thoughts or insights on this would be greatly appreciated as I know virtually nothing about higher earnings brackets.

Rich

Hi All,

This is a question about future earnings and tax (from a complete newbie on the subject).

I have dual nationality, and have lived here most of my life for the past 30 years.

I am currently earning an average amount in the UK, and although I file with the IRS in addition to HMRC, I've never had to pay any extra to them in addition to my UK payments.

My question is, if I am successful in my career and begin to earn say in excess of £100-200k or equivalent, does the tax agreement still hold in the same way or would I be double taxed after a certain point?

The reason I ask is that I've been tentatively thinking about moving to the USA anyway to be closer to family and experience the life out there. The work I do is literary so could be done from either UK or USA.

Thank you for your help, any thoughts or insights on this would be greatly appreciated as I know virtually nothing about higher earnings brackets.

Rich

If you only have salary income, you shouldn't ever owe US tax.  This is because the UK tax rate is higher and therefore by claiming Foreign Tax Credits, it will always wipe out money due to the IRS.

If you have assets outside of your salary or in the US, that's different.

Go, work in the US.  Enjoy the lower tax rates!

Thanks KFDancer,

What if it was from publishing royalties? I suppose that would fall under self employed?

I don't have any other assets outside of this...

Thanks

Thanks KFDancer,

What if it was from publishing royalties? I suppose that would fall under self employed?

I don't have any other assets outside of this...

Thanks

No idea!   

The amount if your income will potentially change your tax rate, but doesn't change how the treaty is implemented. But as you earn more your financial life usually becomes more complex and you will have to be aware of US informational form filing thresholds and the US issues with some common UK investment accounts like sticks and shares ISAs


Sent from my iPhone using Tapatalk

Averaging for creative artists
If Rich32’s income is from publishing royalties as an author or other creative artist, he may be able to obtain a modest reduction in UK tax liabilities from the application of the averaging rules. See https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim84000