Foreign Employer, but American subsidiary?

Hi guys

Having a bit of trouble filling out my tax forms this year. I've lived in the UK for a couple years under a spouse visa. Part way through 2014 I got offered a job with a foreign company registered in the UK but who is a direct subsidiary of an American holding company. I file my taxes through TaxAct and got asked if my employer was american, foreign or both. I just want to make sure I've got this thought out right: I should select both because it is an affiliate of an American company, and this still shouldn't affect my taxes because UK is covered under Totalization Agreements. Does this seem right?

Any help would be great.

Just commenting to see if anyone responds -- I'm now in the same boat, as I started working for a foreign subsidiary of an American company in September...  But I'd also assume the answer is "Both"

Not sure if it helps, but my rationale is -- because all UK employees of my US-parent company have to train on US policies like the FCPA (among a few others), it seems like we follow both UK/US business practices, and therefore the answer on my tax form would then have to be "Both"...not sure if this logic is right, though.

Unfortunately, those who may know the real reason as to why this might be important haven't replied. So, I'll play the straw man. I had a the same situation years ago.

You signed a contract when you began work. Is the company you signed with registered in Companies House as a UK company? Does that UK company control the UK payroll, UK pensions, and UK tax? Does it stipulate in your contract it is in accordance with English Law? Mine did, and I concluded it's a UK company and foreign for US tax purposes. When stock options came about, the US side insisted I (incorrectly) sign a W8-BEN, so they saw us as a foreign employees. It is not "both" IMHO. Office procedures being performed in a "US way" mean nothing for tax purposes, IMHO.

I've never been in that specific situation, but logic tells me it's likely a UK company, not "both". There are lots of companies in the US that are subsidiaries of UK (or other foreign) companies, and lots of companies in the UK that are subsidiaries of US companies as well.

I had a feeling my taxes would be a headache when I took this job. I did some research into my contract and the company and although we are owned by an american holdings company I am fully on UK contract, payroll, etc, and the company is registered in the UK. The name of the company is definitely not registered in the US. It's just identified as a subsidiary of the american holding company on their filings to the SEC. Given the instructions on the tax form, I'm not sure how I would be expected to know if this company has over 10% affiliation (or whatever the guideline was). Also given that our company's work/services are strictly UK only I think this supports the foreign only aspect as well. Hopefully this is the right decision

You signed a contract when you began work. Is the company you signed with registered in Companies House as a UK company? Does that UK company control the UK payroll, UK pensions, and UK tax? Does it stipulate in your contract it is in accordance with English Law? Mine did, and I concluded it's a UK company and foreign for US tax purposes. When stock options came about, the US side insisted I (incorrectly) sign a W8-BEN, so they saw us as a foreign employees. It is not "both" IMHO. Office procedures being performed in a "US way" mean nothing for tax purposes, IMHO.

Thanks- this argument makes more sense on the employment paperwork side of things!