Hello,
I've got a strong prospect of making the move over in the next few months and am trying to sort a few tax things. I've been chasing subjects by reading the forums here and speaking with my tax man, but thought I'd throw out the question in the title that I'm not quite settled on yet. Below is some of my background and few related questions I've gathered. Any help or advice is appreciated!
newcomer link: http://www.ssa.gov/international/Agreement_Pamphlets/uk.html#coverage [nonactive]
• I’m in my early 30s so I have plenty of working years left.
• All my benefits would come from the UK affiliate and everything is pretty much the same as here in the US (except no Dental insurance!)
• No more 401k, instead I’d be enrolled in the private UK-based pension plan (pretax, 4% match).
• Private health insurance on top of NHS will be provided.
• After 11 years of paying into the national pension plan would be eligible for partial UK social security upon retirement.
• Not sure if UK or US social security pays more and am not counting on either one for retirement. All I’ve ever heard is that social security programs in both countries are headed for insolvency before I retire.
• My wife and I are looking at this as a long term engagement (10+ years?).
• Would need to decide if I want to pay UK or US social for the first 5 years. After 6 years in the country we would HAVE to pay UK taxes.
o From what I’m reading, based on my decision, I would have to secure a certificate of coverage from one country to let the other know that I am paying social security in that country.
o I seem to be hearing that UK taxes (40%) are higher than what I collectively pay here in the US. Not sure how much.
o Would it be more advantageous to me to pay (possibly) lower US taxes for the first 5 years then switch to paying UK taxes?
o Not sure how many US social security credits I have (is it one per year?)
o If I decide to pay US taxes for the first five years the Foreign Income Exclusion does not come into play correct?
o What happens to the money I make over the Foreign Income Exclusion of $91.5k?
o What happens to my NHS eligibility if I pay US taxes for the first five years?
Thx in advance.
