Pugilation

Hi,

does anyone have any contacts with an effective tax advisor and accountant in the Houston area who understands the complexity of expat finances? I've got a bunch of questions and some decisions to make which I need to figure out with some actual expert advice.

Thanks in advance!

Owen778

I'm afraid not.

When I first arrived, we used a CPA that my (US citizen) wife had used before. He was good at the basics of the US tax system, but I had to correct him on a couple of things during our initial discussions, and he had little familiarity with expat taxation.

With hindsight, it was still worth using him in the first year to get me up to speed, but I wasn't greatly impressed, and I've done our taxes since then.

Pulaski

Unless your situation is extraordinary, most situations have probably been posted here before, and several BEers have quite a lot of knowledge and experience of expat tax matters. You can always consult an "expert" once you have got some advice here.

Pugilation

Hmm, I think that there may be some unique aspects to my situation. My pre-ipo company just got bought (i.e. announced yesterday to great surprise) and my options (mix of EMI and NQSO awards) are going to be cashed out end of Jan. I'm leaving the UK mid December, and need to complete a tax return before I go. Some significant amounts moving around, and need to work out if there's a tax efficient way of arranging things, and also what the IRS are going to want to know.

Pulaski

Under those circumstances, as close as the deal is to your planned arrival in the US, I would strongly recommend postponing becoming tax resident in the US until after the deal has closed.

If you need to move, and snare yourself in the US tax regime before the deal closes, then you need the advice of a proper international tax consultancy - something like KPMG, E&Y, or Deloitte.

Pugilation

What counts as being tax resident? Is that dependent on AOS or EAD or is it dependent on landing on my K1?

Pulaski

That's a great question, and I am not certain of the answer. I know the K-1 visa is dual intent and I suspect that you may be tax resident on arrival, with the possible exception of if you bail out and leave the US within 90 days without adjusting status.

Pugilation

Getting this from the IRS site : If you are an alien (not a U.S. citizen), you are considered a nonresident alien unless you meet one of two tests. You are a resident alien of the United States for tax purposes if you meet either the green card test or the substantial presence test for the calendar year (January 1-December 31).

https://www.irs.gov/individuals/inte...ien-tax-status

So I think that this means that once I go through AOS and have the green card, I then count as a resident alien for the whole calendar year from when that green card is issued. So I guess that means that if I file for AOS in Jan, and it takes less than a year to arrive, I'm tax resident for 2017. IF it takes 12+ months then I'll be tax resident for 2018 onwards.

Pulaski

But if you're in the US waiting for your green card during 2017 you will meet the substantial presence test for 2017.

If you arrive in the US after the deal has closed you have the option of filing a dual status return for 2017, excluding all tax events prior to your arrival in the US.

Pugilation

Ah yes, I was misreading the substantial presence test applicability. Definitely need to get onto a professional tbh, one way or the other the UK and US tax regimes are going to take a chunk out of me. If I stay here till Feb HMRC will get me for capital gains, if not the IRS will get me. On the plus(?) side I leave work in December so have a few months of non-earning which will reduce some of my liabilities.

Pulaski

There is the distinct possibility that if you are tax resident in the US your CGT bill might be lower than if you were still tax resident in the UK - but you need someone who is familiar with the CGT rules in both the US and the UK, especially regarding your liability for taxes around the time that you leave the UK and arrive in the US, so my recommendation would still be one of the big tax consultancies.

Owen778

I'd agree with this.

Even an individual US CPA who is familiar with expat tax issues will likely struggle when it comes to US law on gains purchasing a non-public company, let alone UK law.

Cook_County

You would do better taking advice from a dual US/UK qualified tax adviser in the UK.

Pugilation

I'm tapping up a couple of contacts on this angle as well, thanks all!

MidAtlantic

I have seen these recommended elsewhere, but I have no direct experience of them:
Welcome to British American Tax - British American Tax

http://www.americantaxreturns.co.uk/