Which Tax Forms to Complete When I Move Overseas?

Hi,

Finally making the move to London from the states around October/November.  Which forms do I need to fill out to let the IRS know I will be moving overseas?  I want to make sure all my bases are covered.

Thanks!

You shouldn't need to fill out any.  You will need to fill out the appropriate forms when you do your US tax return next year.

If you don't want to miss any IRS notices about audits, refund cheques, or other bips and bobs, you can do a change of address Form 8822 (available at http://www.irs.gov/pub/irs-pdf/f8822.pdf).  You'll probably not be filing with the same service centre after the move, and may otherwise never get your notices.  I have clients who originally filed with, say, Holtsville and later with the Philly centre, and Holtsville was sending "you haven't filed yet, where are you" letters three years later.

If you don't think it's likely the IRS would have any reason to contact you prior to next year's filing, then you can just let them know when you do your tax return next year.  You will still have to report your overseas income to the IRS when living abroad.

So that means we need to file a tax return for both the US and UK each year?  Drats, I guess it will be easier to get an accountant to take care of all that for me.  Does having to continue to file tax returns in the US stop after I obtain ILR?

The US requires US citizens to file a tax return every year regardless of where you live.

And unless you're self-employed, you probably won't fill out anything for taxes in the UK. 

And unless you're self-employed, you probably won't fill out anything for taxes in the UK. 

What do you mean by this?  Does this mean that if we are not self-employed, we do not need to file a UK income tax return?

No, rather, the UK PAYE (tax withholding) system is more sophisticated than the US one.  Most people have exactly the right amount withheld from their UK pay.  Thus, there is no need to file.  If you are self-employed, obviously no one is withholding your taxes, so you'd have to pay.  And in your first year in the UK, the PAYE is sometimes overwithheld, and you might need to file to get a refund. 

As long as your income from investments is offshore (the USA is offshore to the UK), and you do not remit the money to the UK, you won't have any UK taxes on your investment income.  Thus, with only your wages being taxed, and the PAYE system being so amazingly accurate, you won't need to file.

Learn more about remittances here:  http://www.hmrc.gov.uk/pdfs/ir20.htm#investment

Learn more about your nondomicile and residency status here:  http://www.hmrc.gov.uk/pdfs/ir20.htm