Author Topic: US Citizen moving to UK. Tax questions  (Read 273 times)

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Offline BridgetHunty94

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US Citizen moving to UK. Tax questions
« on: May 04, 2018, 04:14:21 AM »
So I’m planning to move to the UK on a Spouse Settlement Visa to live with my husband. I know when I move there I still have to pay US taxes since I’m still a US citizen regardless of me living in the US or not. So I’m just wondering what do I do?
How do I do my taxes if I’m working in another country? Who do I inform?
My taxes have always been simple so this situation is really nerve wrecking for me.

Offline Nan D.

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Re: US Citizen moving to UK. Tax questions
« Reply #1 on: May 04, 2018, 07:49:13 AM »
As a US citizen, you'll deal with the IRS, just as you always have done. You can still use Turbo-tax or one of the online preparation services, if you like.  You'll also deal with the UK's tax entity, HMRC, for any income you have when you are living in the UK.

If you are earning income in the UK, there are IRS forms you can use to get credit for taxes paid to HMRC. There are others on this board who are more familiar with the processes - I'm just going through it the first time now.

It's my understanding that if you work in the UK, your taxes will be taken out of your paycheck, so there may be no paperwork for you to actually file with HMRC, if you have no other income but work. If you have foreign income, you will probably need to do a self-assessment with HMRC. They have a website where you can sign up and do most things online now.

Be aware that the UK and the USA tax years are not the same. You'll file your IRS taxes based on Jan-Dec of a year. HMRC runs April - April. On the good side, the IRS allows overseas citizens up to mid-June to file, and extensions are possible. With HMRC there are different dates depending on if you are filing a paper self-assessment or doing it online (if you even need to file one).

If you arrive in the middle of a UK tax year, say, June, you can request "split year" treatment, and anything you will have earned in the US prior to your arrival in that tax year will not be counted on your taxes in the UK.

They tax the individual here, so be prepared for not having deductions for family members (if you have a family) on HMRC taxes. You'll probably be filing with the IRS as married filing separately, to keep your spouse out of the IRS's view. If you arrive and you do not work during the UK tax year, and have no foreign income, you probably will not need to file any sort of tax forms for UK. (I'll let others correct that if it's wrong info.)

You should be fine, once you read through the requirements. If not, there are good people on this board who will help you out, if they can, with explaining how things work. Best of luck with your move!

« Last Edit: May 04, 2018, 07:55:46 AM by Nan D. »

Offline durhamlad

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Re: US Citizen moving to UK. Tax questions
« Reply #2 on: May 04, 2018, 11:28:27 AM »
I think Nan has summed up the situation quite nicely. Our son moved back from the USA in September last year and started work in November. He has no income from the USA, just an IRA and a Roth which he does not have to report to HMRC until distributions are made. HMRC are taking taxes from his UK paychecks using P.A.Y.E. and he should not need to file a self assessment with them. The first 2 or 3 paychecks had PAYE taxes withheld but then HMRC figured that in the few months before April 5th he would not earn enough to pay UK taxes so what he had paid was refunded in his next paycheck and no tax was taken until his first paycheck after April 5th.

When filing his taxes with the IRS he will be excluding his UK pay using the Foreign Earned Income Exclusion (FEIE). However to do this he must be physically outside of the USA for at least 330 days so he has filed for an extension as he won’t be able to claim this until after late August. The same criteria applies to avoiding the ACA mandate penalty so he has 2 reasons to delay his filing. (The ACA mandate was repealed for the 2018 tax year). He is using TurboTax to file his US return.
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Offline Kelly85

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Re: US Citizen moving to UK. Tax questions
« Reply #3 on: May 04, 2018, 02:15:12 PM »
(The ACA mandate was repealed for the 2018 tax year).

Actually it doesn't take effect until next tax year (2019).

Offline Anchor

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Re: US Citizen moving to UK. Tax questions
« Reply #4 on: May 04, 2018, 03:09:44 PM »
Be aware also of FBAR and FATCA, which potentially involve reporting foreign (to the USA) financial accounts.

FBAR reports are separate from your taxes and are reported on-line if you have more than $10k in foreign accounts.

FATCA Form 8938 is part of your tax return, but the limits above which you must report are substantially higher.

https://www.irs.gov/businesses/comparison-of-form-8938-and-fbar-requirements

Offline durhamlad

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Re: US Citizen moving to UK. Tax questions
« Reply #5 on: May 04, 2018, 03:36:11 PM »
Actually it doesn't take effect until next tax year (2019).

That is good to know, I just mislead the OP.

If the OP has no earned income to exclude with the FEIE then she will still need to delay filing until she has been out of the US for 330 days to avoid the ACA tax penalty.
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