Tax Advice - Contracting as corporations vs Self Employed

Hello all-

What a great forum.  I wish I'd found you years ago! 

Looking through the threads, my question seems to be a different (but complex!) variation on the things that have been asked before.  I'd be incredibly grateful for any insight, or for a recommendation of someone to talk to.

I am a screenwriter from the UK who has been tax - and of course visa - resident in the US for the past 2 years.  I have projects in both countries, and currently contract in the US through a loan-out corp (an S Corp) and in the UK through a Limited Company.

As I am currently tax resident in the US, my accountants (US and UK) recommended transferring the UK company's existing contracts to the US corp to avoid any double taxation.  (As the IRS does not view the UK corp as a corp but as me as an individual, it seemed that I would be paying both UK corp tax and US income tax on monies earned by the UK company)

Rationalising the projects to the US seemed like a sensible plan - at the time, my work was increasingly centred in the US - and we were proceeding with the Deeds of Noviation to transfer the contracts to the US Corp.

However, I now abruptly look like having a lot more work in the UK in the early part of next year, and possibly long term too.  Reading through this forum, it seems that the inverse of the situation I was worried about could now come true - money earned by the US company would be subject to US corp tax plus UK income tax.

So I am in rather desperate need of advice as to what to do, and this is not my current accountants' area of expertise. To my completely untrained eye, one potential solution seems like it might be to:

- Transfer the UK contracts not to my US Corp but to me as an individual, which would mean they were subject to income tax - wherever I was resident? - rather than income tax in one country plus corp tax in anohter
- Look to shut down my US Corp and contract as an individual in the US too, for the same reason.

I would be incredibly grateful for any thoughts/advice/experience or recommendations anybody to talk to that any of you could give me.

Many thanks in advance,

Simon
 






 

Hi Simon!

Do you have any representation in the US? I recently left my agency as I prepare to move to the UK, but they had a lawyer to help advise in situations like this on staff. If you do, it might be time to use your client status and get some free but solid advice.

Hi Sam-
Thanks very much for reply.
I do have an agency here in the US but unfortunately they don't seem to have the necessary expertise.
Cheers - and happy travels!
Simon

Many people in this situation would have the UK entity make a check the box election. Alternatively, get rid of the UK entity and have the US entity taxed by both countries as a corporation. Someone will have to run all the figures for you.

Hi there-
Thanks very much for the reply.

My us accountant was planning to make the 'check the box' election but seemed to think that would not solve the risk of double taxation. Do you perhaps have an opinion on that? 

Agree would be great to have someone fully run the numbers etc. (it doesn't seem to be my current accountants' area of expertise.) if you - or anyone reading - could recommend someone who might be able to do that  I would be very grateful.

Thanks again,

Simon