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Topic: US Citizen with UK Permanent UK Residence - Do I pay US Taxes?  (Read 1299 times)

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Hello All,

Would appreciate your advice on this matter.  I was told when I moved I would no longer need to file US taxes.  Now finding out information which is contradicting this advice.

1. As a permanent resident of the UK, with no intention of ever going back to the U.S and no financial ties there (no back accounts, no property/assets, no income derived from the U.S) am I required to declare to the U.S. IRS my UK Employer Workplace Pension. It currently has about £20K and I’m 15 years from retirement. It’s my understanding that, in my instance, I do not need to file annual U.S. tax returns. Am I way off on this?
2. Anyone familiar with a recent Law to explain why Ageon is telling me, because I’m a U.S. citizen, I can no longer invest and have access to their entire range of pension funds that my UK colleagues have access to. After 3 years with Ageon, they’re now limiting me to Ageon controlled ones.

Thank you for all of your help.
Me (Brit) Applied for Fiance Visa from UK Sept 1997
Received Fiance Visa Aug 1998
Married my US Husband Nov 1998 and Living in NJ
Sent Online App Jun 27 2015
Biometrics Jun 30 2015
Sent VFS Priority Jul 1 2015
Sheffield Received Package Jul 3 2015
Received Email Jul 6 2015
Received Decision Made Email Jul 9th 2015
Visa Arrived Jul 10th 2015
Now Lots to do!!
Arrived in UK August 25th,2015


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Re: US Citizen with UK Permanent UK Residence - Do I pay US Taxes?
« Reply #1 on: July 04, 2022, 01:09:20 PM »
You are required to file annual tax returns with the USA if you meet these calendar year income requirements: 
Single (not married): $12,550
Married filing Separately (married but spouse is not US citizen):  $5

So if married to a Brit, you only need to earn $5 to meet the filing requirement.

It's more of a paperwork exercise and not burdensome if employed by a employer and you aren't drawing down on a pension from either country.  You file the normal 1040, converting UK income to US dollars.

You can file using the Foreign Earned Income Exclusion (FEIE) on form 2555 which will likely exclude all of your income and just have a $0 due tax return.

Or if you have different earnings (such as pensions) or children, you may find it benefits you to use Foreign Tax Credits (FTC) on form 1116 to have a $0 due tax return (as it sounds as though you don't have anything taxable in the eyes of the US government).

If you have kids and you use form 1116, you can also file form 8812 which will give you a refund of $1,400 per child per year.

You can catch up on back filing the last 3 years of tax returns using what's called the Streamline process.  That will also allow you to claim the stimulus payments that were received by US citizens during the covid pandemic.  If you don't have children, the amounts were $1,200, $600, and $1,400.  So a nice easy "bend over and collect $3,200".  Bad news is streamline processing is WAY behind on catching up (paper returns) and it'll be a long wait for the payments.  But worth the wait when they catch up!

But yeah, you need to be filing returns to be compliant.  You also need to catch up on filing if you want to renounce.  There really isn't any way around it.


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Re: US Citizen with UK Permanent UK Residence - Do I pay US Taxes?
« Reply #2 on: July 04, 2022, 01:27:11 PM »
Thank you for you response.

Is this a process I can do online to fill out the required forms.  Or do I need to hire an accountant?

Thank you,
Me (Brit) Applied for Fiance Visa from UK Sept 1997
Received Fiance Visa Aug 1998
Married my US Husband Nov 1998 and Living in NJ
Sent Online App Jun 27 2015
Biometrics Jun 30 2015
Sent VFS Priority Jul 1 2015
Sheffield Received Package Jul 3 2015
Received Email Jul 6 2015
Received Decision Made Email Jul 9th 2015
Visa Arrived Jul 10th 2015
Now Lots to do!!
Arrived in UK August 25th,2015


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Re: US Citizen with UK Permanent UK Residence - Do I pay US Taxes?
« Reply #3 on: July 04, 2022, 01:31:16 PM »
Depends on how complicated your financial set up is and how comfortable you are with IRS forms.  I will say that if you are catching up and filing Streamline, do lots of research first and fully understand the process before setting out on your own.

As from what you've written, your circumstance seems very straight forward, I would NOT recommend paying someone thousands to file Streamline for you.  If you decide to not do it yourself, shop around as pricing can vary wildly.


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Re: US Citizen with UK Permanent UK Residence - Do I pay US Taxes?
« Reply #4 on: July 04, 2022, 02:31:55 PM »
The streamline process says 3 years.  My husband has been here for 6 years.  Is there another way if we need to do more than 3 years?

I will have a look into it and this is always a great place to get information from. 

Thank you for all of your help :)
Me (Brit) Applied for Fiance Visa from UK Sept 1997
Received Fiance Visa Aug 1998
Married my US Husband Nov 1998 and Living in NJ
Sent Online App Jun 27 2015
Biometrics Jun 30 2015
Sent VFS Priority Jul 1 2015
Sheffield Received Package Jul 3 2015
Received Email Jul 6 2015
Received Decision Made Email Jul 9th 2015
Visa Arrived Jul 10th 2015
Now Lots to do!!
Arrived in UK August 25th,2015


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  • Joined: Sep 2010
Re: US Citizen with UK Permanent UK Residence - Do I pay US Taxes?
« Reply #5 on: July 04, 2022, 02:35:22 PM »
No, that brings you up to date no matter how many years delinquent you are. That and 7 years of Fbars.


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Re: US Citizen with UK Permanent UK Residence - Do I pay US Taxes?
« Reply #6 on: July 04, 2022, 05:11:37 PM »
Is Fbar a form I have to fill out?

Not familiar with the term.
Me (Brit) Applied for Fiance Visa from UK Sept 1997
Received Fiance Visa Aug 1998
Married my US Husband Nov 1998 and Living in NJ
Sent Online App Jun 27 2015
Biometrics Jun 30 2015
Sent VFS Priority Jul 1 2015
Sheffield Received Package Jul 3 2015
Received Email Jul 6 2015
Received Decision Made Email Jul 9th 2015
Visa Arrived Jul 10th 2015
Now Lots to do!!
Arrived in UK August 25th,2015


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  • Posts: 17221

  • Liked: 5904
  • Joined: Sep 2010
Re: US Citizen with UK Permanent UK Residence - Do I pay US Taxes?
« Reply #7 on: July 04, 2022, 05:30:27 PM »
Is Fbar a form I have to fill out?

Not familiar with the term.

It's informational and goes to the treasury as opposed to the IRS.

https://www.irs.gov/businesses/small-businesses-self-employed/report-of-foreign-bank-and-financial-accounts-fbar

If the US person has more than a $10,000 combined maximum balance in the calendar year,  all foreign financial accounts need to be reported.

You don't need to actually have $10k. If you had 5k in one account and moved it to a second account, the combined high balance (5k+5k) triggers the filing requirement.


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Re: US Citizen with UK Permanent UK Residence - Do I pay US Taxes?
« Reply #8 on: July 04, 2022, 09:39:08 PM »
I’m confused. Didn’t realize you were a US citizen.

https://talk.uk-yankee.com/index.php?topic=93025.0

Quote
We moved here two years ago.  I am British but lived in NJ with my husband for 20 years.
We have 2 boys 8 and 12.

https://talk.uk-yankee.com/index.php?topic=87223.0

Quote

Hello all,

I have received a letter from my bank asking me to fill in either a W9 or W8BEN.

I am not sure what to do.  I am a British citizen and lived in the US as a Resident Alien for 18 years.  I moved back home to the UK in August 2015 and will be staying here permanently not returning to the US.

I am under the understanding that once I have been out of the US for 6 months I have to return my Green card.  I have been here just over 6 months.

So, do I fill out the W9 - Am I still a US resident?
Or
do I fill out the W8BEN - Am I no longer a US resident?

If anyone could advise me as I have spoken to the bank and also HM Customs and neither of them knew what I should do.

Thank you for your help.....    :)



Dual USC/UKC living in the UK since May 2016


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Re: US Citizen with UK Permanent UK Residence - Do I pay US Taxes?
« Reply #9 on: July 04, 2022, 09:53:50 PM »
I’m confused. Didn’t realize you were a US citizen.

https://talk.uk-yankee.com/index.php?topic=93025.0

https://talk.uk-yankee.com/index.php?topic=87223.0

They may be a US/UK couple both posting from the same account?


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Re: US Citizen with UK Permanent UK Residence - Do I pay US Taxes?
« Reply #10 on: July 04, 2022, 10:29:35 PM »
They may be a US/UK couple both posting from the same account?

Gotcha. That makes sense. I’m easily confused these days.
Dual USC/UKC living in the UK since May 2016


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Re: US Citizen with UK Permanent UK Residence - Do I pay US Taxes?
« Reply #11 on: July 05, 2022, 11:18:52 AM »
Oooo, you have kids!!!  That means you'll get the $3,200 in stimulus money for the USC (your husband?)


Husband stimulus - $3,200
2019 - $1,400 Child Tax Credit x 2 = $2,800
2020 -   $1,400 Child Tax Credit x 2 = $2,800,
2020 - Stimulus payments for children of $500 x 2 = $1,000, Second payment of $600 x 2 = $1,200
2021 - $1,400 Child Tax Credit x 2 = $2,800, and stimulus payments $1,400 x 2 = $2,800

So by catching up on the last three years of taxes you will collect $16,600!!!!!! Plus interest!!!

Granted the backlogs are enormous and it'll probably be 18 months to 2 years before you actually get the money, but that is NOT a small chunk of change.  Well, I would suspect it's not.  Might not be a big deal to you. 


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Re: US Citizen with UK Permanent UK Residence - Do I pay US Taxes?
« Reply #12 on: July 05, 2022, 12:53:26 PM »
I'm British, Hubby American.

If he files himself not a joint as I am no longer a resident of US does he get the Tax Credits for the two children?

I had a brief read last night on what is entailed and read a couple of things which I clearly need to look further into.

Do you think it is something I can do.  We are a standard family  with two kids that both work and mortgage a house.  No savings of $10,000 or above.

I feel I may becoming very annoying for you again...LOL
Me (Brit) Applied for Fiance Visa from UK Sept 1997
Received Fiance Visa Aug 1998
Married my US Husband Nov 1998 and Living in NJ
Sent Online App Jun 27 2015
Biometrics Jun 30 2015
Sent VFS Priority Jul 1 2015
Sheffield Received Package Jul 3 2015
Received Email Jul 6 2015
Received Decision Made Email Jul 9th 2015
Visa Arrived Jul 10th 2015
Now Lots to do!!
Arrived in UK August 25th,2015


  • *
  • Posts: 71

  • Liked: 0
  • Joined: Jul 2013
  • Location: New Jersey / Norwich, UK
Re: US Citizen with UK Permanent UK Residence - Do I pay US Taxes?
« Reply #13 on: July 05, 2022, 12:54:33 PM »
BTW .... £16,600....WHAT!!!!!!!
Me (Brit) Applied for Fiance Visa from UK Sept 1997
Received Fiance Visa Aug 1998
Married my US Husband Nov 1998 and Living in NJ
Sent Online App Jun 27 2015
Biometrics Jun 30 2015
Sent VFS Priority Jul 1 2015
Sheffield Received Package Jul 3 2015
Received Email Jul 6 2015
Received Decision Made Email Jul 9th 2015
Visa Arrived Jul 10th 2015
Now Lots to do!!
Arrived in UK August 25th,2015


  • *
  • Posts: 17221

  • Liked: 5904
  • Joined: Sep 2010
Re: US Citizen with UK Permanent UK Residence - Do I pay US Taxes?
« Reply #14 on: July 05, 2022, 01:11:11 PM »
I'm British, Hubby American.

If he files himself not a joint as I am no longer a resident of US does he get the Tax Credits for the two children?

I had a brief read last night on what is entailed and read a couple of things which I clearly need to look further into.

Do you think it is something I can do.  We are a standard family  with two kids that both work and mortgage a house.  No savings of $10,000 or above.

I feel I may becoming very annoying for you again...LOL

While your green card will have expired from an immigration standpoint, as far as the IRS is concerned, until you file I-407, you're still on the hook as far as filing taxes is concerned.

https://uk.usembassy.gov/visas/immigrant-visas/lawful-permanent-residents-lprs/

Even though you don't actually have $10,000. If you have a few accounts and move money around, you could still be required to file Fbar.
To confirm, take each account and find out the highest balance in the calendar year. Add up the highest balance for all the accounts, if that's under $10,000, you don't need to file Fbar.


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