FBAR?
Aug 10th 2013, 10:56 pm
#46
Forum Regular
Joined: Jul 2013
Posts: 127
Re: FBAR?
Right but that's not very anarchic is it. More what I'd expect on some badly drafted US gov form or TV ad disclaimer :-) Bracing myself for the attack Apaches and seal team.
Last edited by Caruthers; Aug 10th 2013 at 11:04 pm.
Aug 10th 2013, 11:12 pm
#47
BE Forum Addict
Joined: Aug 2004
Posts: 4,754
Re: FBAR?
I am just curious to know if you feel the IRS has the power of jurisdiction to penalize you in all reality, as opposed to a perceived threat ( assuming that you aren't at a Bill Gates level of wealth and that all your assets are now in the UK). There are so many repatriated dual nationals lower net worth individuals globally, paying local local taxes, that the threat of being at fault with HMRC must be more pertinent before the reality of Obama scrambling the jets for another extraction..
1) ignore your responsibilities as a US citizen
2) comply with your obligations and potentially end up with a few bucks in your pocket
3) renounce US citizenship.
For me the logical challenges and "fun" of taxation along with the potential to use the rules to make me better off trump my philosophical leanings. So I fully comply and end up better off financially. If you talk to an advisor you will get the same advice.
Last edited by nun; Aug 10th 2013 at 11:16 pm.
Aug 11th 2013, 12:13 am
#48
Forum Regular
Joined: Jul 2013
Posts: 127
Re: FBAR?
There are actually potential financial advantages to complying with US tax law when you are a UK resident because of the UK's higher income tax rates. Even if you have no financial assets in the US a US citizen is almost always required to file US taxes. Tax is seldom due so there is no penalty for not filing, however, the UK does now share account and financial information with the US authorities so I have no idea what the IRS will do in the future, and if the US citizen wishes to return to the US a back log of unfiled 1040s can be a big headache. So you have 3 options:
1) ignore your responsibilities as a US citizen
2) comply with your obligations and potentially end up with a few bucks in your pocket
3) renounce US citizenship.
For me the logical challenges and "fun" of taxation along with the potential to use the rules to make me better off trump my philosophical leanings. So I fully comply and end up better off financially. If you talk to an advisor you will get the same advice.
1) ignore your responsibilities as a US citizen
2) comply with your obligations and potentially end up with a few bucks in your pocket
3) renounce US citizenship.
For me the logical challenges and "fun" of taxation along with the potential to use the rules to make me better off trump my philosophical leanings. So I fully comply and end up better off financially. If you talk to an advisor you will get the same advice.
IRS seem tied up. Just check out all those settle for cents on the dollar adds on TV..
Aug 11th 2013, 12:26 am
#49
BE Forum Addict
Joined: Aug 2004
Posts: 4,754
Re: FBAR?
I am curious about the potential financial advantages that you claim. Surely local tax codes take precedent i.e. you can't elect to be American and gain some advantage, unless you aren't resident for the taxable year.
IRS seem tied up. Just check out all those settle for cents on the dollar adds on TV..
IRS seem tied up. Just check out all those settle for cents on the dollar adds on TV..
Potential advantages for the average US expat payer tax can arise from use of foreign tax credits to build up a US tax free basis in things like pensions. Also careful use of IRAs, ROTHs and ESC-A10 can reduce retirement account taxation. I am organizing my retirement accounts so I pay tax at the generally lower US rates prior to moving to UK and when I take income from them they will be free of both US and UK tax.
Just curious, what is your citizenship and residency? If you are moving ~$80k from the US to the UK what will you be doing with it? Leaving it in a bank account or investing it?
Last edited by nun; Aug 11th 2013 at 12:30 am.
Aug 11th 2013, 3:31 pm
#50
Forum Regular
Joined: Jul 2013
Posts: 127
Re: FBAR?
Both tax codes are equally relevant, but the percentage of tax that you pay to each will depend on citizenship, residency, income source and the US/UK tax treaty.
Potential advantages for the average US expat payer tax can arise from use of foreign tax credits to build up a US tax free basis in things like pensions. Also careful use of IRAs, ROTHs and ESC-A10 can reduce retirement account taxation. I am organizing my retirement accounts so I pay tax at the generally lower US rates prior to moving to UK and when I take income from them they will be free of both US and UK tax.
Just curious, what is your citizenship and residency? If you are moving ~$80k from the US to the UK what will you be doing with it? Leaving it in a bank account or investing it?
Potential advantages for the average US expat payer tax can arise from use of foreign tax credits to build up a US tax free basis in things like pensions. Also careful use of IRAs, ROTHs and ESC-A10 can reduce retirement account taxation. I am organizing my retirement accounts so I pay tax at the generally lower US rates prior to moving to UK and when I take income from them they will be free of both US and UK tax.
Just curious, what is your citizenship and residency? If you are moving ~$80k from the US to the UK what will you be doing with it? Leaving it in a bank account or investing it?
Dual. Not sure what to do with it as its more than 80k. Probably need some professional advice.
Aug 11th 2013, 4:54 pm
#51
BE Forum Addict
Joined: Aug 2004
Posts: 4,754
Re: FBAR?
If you are dual you should to look into ROTH IRAs and remember that investing in pooled investments, ie US or UK mutual funds will be difficult and could lead to big tax bills. Definitely seek professional advice.
