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Topic: UK - US tax question  (Read 1225 times)

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UK - US tax question
« on: November 13, 2016, 10:25:43 PM »
Hi, my husband is from the UK but also has US citizenship and we have lived in the US for 25 years.  We lived in the UK for 3 years when we were first married.  We are considering going to live in Scotland for a year or more (if we like it).  He may still work for a US company and would work remotely.  He makes about $155k a year.  Does anyone know much we would have to pay for UK taxes?  The US taxes are would already be taken out. 

We are trying to figure out if we can afford to move there and how much we would have left to live on.  Do you have to pay UK and National Insurance tax? Do you pay this monthly, quarterly or yearly?

Our plan is to rent our house in the US and if after a year we like it we will sell it and buy a house in the UK.  Do you have to live there a certain number of years to get a mortgage?


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Re: UK - US tax question
« Reply #1 on: November 13, 2016, 10:45:47 PM »
The first issue would be getting a visa is you are not an EU citizen.....but with $155k salary that would not be a problem.

Now to the work. It's not as simple as working remotely for a US company. If he is on the payroll and working in the UK, then the US company will have to comply with UK employment regulations, and set up PAYE and National Insurance. In these situations it's better to set up as self employed in the UK and bill US company.

If you are living and working in the UK you will pay UK taxes first and then take a credit for those against US tax or some people use the Foreign Erarned Income Exclusion.....so you'll probably end up paying zero US tax.


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Re: UK - US tax question
« Reply #2 on: November 14, 2016, 05:08:23 PM »
Perhaps I read this wrong - the husband is from the UK, so no visa required?
$155k salary, if taxed in the UK means close to GBP 50k deduction income tax / NI  at current exchange rate, paid monthly. I'm assuming no UK expenses to set off against the UK tax liability - usually, there's be 10k to 20k of these, and pensions.
No health care premiums.
No state tax.
There are local rates... say GBP 2k p.a.
Useful possibility of clocking up two state pensions. Actually, four.
Very roughly 1 USD spent on food and utilities = 1 GBP on same in UK.
The US company would eventually have to set up UK NI payments, payable monthly at 13.8% (GBP 16k). There's an initial period where they don't if the 'secondment' (if that's what it is) is classed as temporary.

I'm not sure I would easily go along with forming a self employment (or company) and billing the company. Take into account pension rights and stock options, and tax deductible expenses for travel to and from UK.

In my view, there is significant value in talking first to a cross border planner / tax planner if you're going ahead, to help you take advantage of some unique tax breaks, and work through the investment management considerations.

GBP 6K per month is what you'd probably end up with. I guess a very nice house in Scotland will cost GBP 500-750k. University fees in Scotland - free.
I think US tax rates will probably decline, short term, UK ones will rise short, medium and long term, slowly.
Most UK US cross border clients prefer to retire in the US, some choose London, some prefer France for sun and healthcare, some are heading off to South Africa.
RNW
'Consistently beating the average global asset manager'


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Re: UK - US tax question
« Reply #3 on: November 14, 2016, 07:21:13 PM »
What advice has the engager of the work taken on their obligations to pay UK corporation tax & VAT; prepare an employment contract that is valid under Scottish law and provide Scottish law employment rights? The engager of the work should be paying for any advice required, as that entity is the one bearing the risks.


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