Kady

I was wanting to know if my British husband who has a EAD and social security number will have to file taxes in England and also to the US when he starts working here in the US?

We are planning on permanently living in England in the near future. I have read that me as a US citizen will still have to file taxes to the US from the wages I earn in England. Is this true? If so, will I be filing both in England and the US? Doesn't seem fair to be taxed twice especially by the country I'm not living in anymore.

Has this happened to any of you?

All help will be appreciated on this matter.

Thanks, Kady

abba48uk

You will not have to pay taxes in both countries. There is a "no double taxation" agreement between the USA and the UK. Where your taxes become due depends on where you are domiciled. If you are leaving the USA to live "permanently" in the UK, your liability to USA income tax should cease from the date you leave. You then become liable to UK income tax. Of course, both the IRS and the Inland Revenue will require notification, and I suggest your first step is obtain any necessary forms (there are ALWAYS forms...lol) from the IRS.

Kady

Thanks for your reply Abba48uk. This is good to know.

Kady

abba48uk

I ought to have said that if your husband is in the USA now he should contact the Inland revenue at Centre for NON residents, fitzroy house, po box 46, nottingham, england (!) ng2 1 bd, or telephone 44 151 210 2222. They should send him two forms, one to go back to them, and one to go back VIA the IRS (the latter form confirms residence). When the system catches up..lol...any continuing UK income will not be taxed by the Inland Revenue. He should also ask for a self assessment form for the UK tax year 2002/2003 (uk tax year ends in April) which he would get around June/July. He will almost certainly be due a refund of tax from the UK since he will be entitled to a FULL year's personal (tax free) allowances although he has had income for only part of the year. ( In effect, the tax allowances are "pro rata-ed" during the year.) Hope I'm not making this too complicated. Console yourself with the thought that its all good news!......

Kady

Thanks again for all the help you have given me.
Kady

L D Jones

Kady wrote:
    >
[...]
    > We are planning on permanently living in England in the near future. I
    > have read that me as a US citizen will still have to file taxes to the
    > US from the wages I earn in England. Is this true? If so, will I be
    > filing both in England and the US? Doesn't seem fair to be taxed twice
    > especially by the country I'm not living in anymore.
    >
    > Has this happened to any of you?

This page has some answers

http://www.usembassy.org.uk/irs/irsfaq.htm

You are required to file a US return every year you live abroad. It is
unlikely you will owe much tax in the US while living in the UK (and you
probably won't pay any at all). The Foreign Earned income exclusion
forms are difficult to do correctly

Just Jenney

Based on my own personal experience, I feel these comments are a bit misleading.

The United States is one of the few countries in the world in which citizenship -- not residency -- is the basis for filing tax returns. All US citizens earning a certain minimum income are required to file tax returns, regardless of where they live in the world. Living abroad does NOT exempt you from this.

Of course, there is a difference between *filing tax returns* and *paying taxes* as they are not necessarily one and the same. But as far as paperwork goes, assuming you earn a minimum amount of income, you MUST file US tax returns no matter where on earth you live.

For US citizens living abroad, there is the Foreign-Earned Income Exclusion (FEIE), which means if you work for a foreign employer and earn foreign income, but make less than $76,000/year, then you don't have to pay US income tax. You may still have to FILE tax returns, however. Additionally, you have to meet certain residency requirements in order to qualify for the FEIE; if you do not, then you might have to PAY US income taxes, not simply file returns.

Likewise, if you make MORE than $76,000/year abroad, then you WILL have to pay US income tax.

In my case, my ex-husband and I lived in Chile in 1995-1997. We both worked for Chilean employers. Together we earned about $20,000/year. We paid Chilean income tax, but had to file US federal tax returns as well, with the attached Form 2555-EZ to avoid having to pay US income tax.

To read more about the Foreign-Earned Income Exclusion, go to:

http://www.irs.gov/businesses/small/...=97130,00.html

Also, I don't remember the Foreign-Earned Income Exclusion form (2555-EZ) as being particularly difficult to complete... Of course, maybe it's changed and gotten more complicated since I last had to fill one out 5 years ago.

~ Jenney

MrsLondon

I wouldn't advise asking for a self assessment form. Once the IR get your name you're probably stuck doing self assessment for years. Most UK tax payers do not have to send in tax returns. Only if your tax affairs are a little complicated (money from private work for example) would you normally be required to do this.
To get a refund of tax if you leave part way through the year, I would normally advise someone to just post their P45 to their tax office (the tax office of their last employer) with a letter saying they are going abroad and wish to claim the rest of the years tax free allowance. (NB I work in payroll).

abba48uk

Thanks to the previous poster for the additional information re the position of US citizens, not a subject with which I am familiar. I confess that I was basing my comments from a UK perspective, and, in that respect, Mrs London's advice only works if you are NOT contining to receive any form of income from the UK whilst your are in the USA. In those circumstances, you have no choice but to self assess. (Dividends, investment income, certain pensions etc, bank account interest etc.).

Kady

Thanks to all of you who gave me accurate information on this concern of mine. The websites really helped alot.
Again thanks,
Kady