uk earnings - us tax for dual citizen

My friend, (who has no computer skills to ask these questions),  is a UK born citizen with dual US citizenship through his father. He has always lived and worked in the UK and is confused regarding the US tax laws  He has no intention of living in the USA and will only visit his recently discovered brother.
The questions that are of concern to him are:


1) What UK income is allowed before US tax is due
2) What is considered income, do company and UK state pensions, ISA savings, saving accounts qualify as income.
3) What is the situation re the home he owns and lives in, if he sells the house or upon death, bequeaths it to his son and heirs is this liable to any form of capital gains/death dutIEs tax in US.
4) What is the the time scale on providing income from previous years income, ie how may years do the IRS need to know of his previous income

So many questions - but if you are able to help with any information or point toward further advice without it costing most of his small pension it would be appreciated. Regards, Timber Toes

1)  He must file a US tax return each year, reporting all his worldwide income.
      a)  He can take a deduction for foreign workdays, a tax credit for foreign taxes paid, and may be able to exempt some items through the treaty.  It's easiest to provide a list of income items received, and describe their treatment, rather than listing the 1,000's of bizarre combinations that exist and how they are taxed.
2)  All income is income.  Not all income is taxable.  Again, list each type and we can specify how they are taxed.
      a)  Company pensions are usually reported on US tax return, with a foreign tax credit for any UK tax paid.  There are numerous complicated exceptions that apply to the taxable amount to report on a US return.
      b)  UK state pensions are exempt by virtue of the US/UK tax treaty.  A treaty claim must be filed to claim the exemption.
      c)  ISAs can be invested in cash, shares, unit trusts/investment trusts, and even life insurance products.  Each of these face different taxes within the US.  More information is needed to determine US taxation.
      d)  interest on savings accounts would be reported in the US and any UK tax paid is allowed as a tax credit against the US tax due.
3)   a) If he sells it, he may face capital gains tax in the US if the gain is in excess of $250,000.
      b)  If he dies while he still owns it, he faces US and UK inheritance tax situation.  This would devolve to the treaty to determine which country is his primary domicile and which is his secondary domicile.  US inheritance tax does not kick in until $2,000,000 this year, but in future years the threshold ranges between $1,000,000 and $3,500,000; and there's even one year where there's zero inheritance tax.  His will should stipulate that his heirs seek competent US tax advice regarding inheritance tax obligations upon his death.  He should begin planning now if his net worth is in excess of $1,000,000.
4)  The IRS only requires the past three years if there is no significant balance due.  The IRS may require six years if there is a significant balance due.  He should discuss this with a competent US tax expert in the field of bringing forward noncompliance clients to the IRS.  He can do this on an anonymous basis by calling one and having a brief discussion on a no-names basis.