US, UK tax or both

We are thinking of moving to Glasgow for 1 year to see if we like it.  My husband is British citizen and a US citizen.  I am a US citizen.  If we don't like it there after a year we will move back to the US.  If we like it we will sell our US house and move there.  We have 1 child.

He works for a software company in the US as a developer.  They said he could work from the UK remotely.  He would be paid the same salary in US dollars into his US account. 

We also have a house in the US that we would like to rent since the market is so bad.  We would probably loose $100-200 a month on this. 

Questions)

1) To qualify for earned income exclusion is the $85k your after deduction pay or gross salary?  His gross pay in much more than this.

2) Will his company have to pay UK corporate tax?  He doesn't really want to become a contractor because then if they have lay offs they will have to let him go, plus all his benefits will start over when/if he comes back to the US.

3)  Can we deduct housing/travel costs in the UK.

4) We have no investments in the US (only our house).

Wow, sounds pretty complicated with many "if's"...best to contact a tax professional accustomed to working UK/US taxes.

1) To qualify for earned income exclusion is the $85k your after deduction pay or gross salary?  His gross pay in much more than this.

Adjusted Gross...  Nothing is striaghtforward with the US.  Adjust Gross is a complex topic of it's own.  If you really want to get a feel for it, go buy some tax software and "prentend" this year you lived in Glasgow.

2) Will his company have to pay UK corporate tax?  He doesn't really want to become a contractor because then if they have lay offs they will have to let him go, plus all his benefits will start over when/if he comes back to the US.

Corporate Tax?  Well that has to do with retained earnings in the coporation blah blah blah...  I think you mean their share of the FICA.  The answer is, if he is employed in the US and they pay him in the US they treat him just like a regular employee.

3)  Can we deduct housing/travel costs in the UK.

Deductible moving costs are complex topic again...  They are the standard rules for deducting moving and travel costs within the US apply to moving abroad.  The topic is covered here: http://www.irs.gov/taxtopics/tc455.html.  The ability to deduct is based on where your "workplace" is.  So you would have to establish your "workplace" in Scotland and then.

Also, if you intend to live in Scotland for less then 2 years there are some tax relief you might be due in the UK, but it can become a problem if you end up deciding to stay.

But as WebyJ says, tax professional advice is probablly best!