Lowdown on Tax Issues

Old Aug 24th 2020, 8:19 pm
  #46  
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Default Re: Lowdown on Tax Issues

Originally Posted by mrken30 View Post
Would this trigger an exit tax? Hoping your net worth is less than $2mn.each. I am curious if that amount is pre or post tax? Does this give an added advantage of a ROTH IRA?

https://www.immi-usa.com/green-card-...d%20correctly.
I don’t know, which is why I said I hoped someone would come along with more information. That link you provided is excellent information for the person asking the question. They can now compare their circumstances against the triggers for the exit tax.
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Old Aug 24th 2020, 8:31 pm
  #47  
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Default Re: Lowdown on Tax Issues

Originally Posted by durham_lad View Post
From the very first tax return you can use the US tax year for US income when filing the HMRC return. Just simply make a comment in the white space similar to below. That way the 1099’s and W2s are easy, as are the P60s



With the US return however I have to keep a spreadsheet tracking my U.K. pensions and interest on a month by month calendar year. P60s are no use when doing the US return.
For entering the Interest, dividends and gains from the 1099s on the HMRC return do you need to exchange USD to GBP currency as at the date of each individual payment? or can they be grouped using an average rate for the year?

Just to clarify, In the example for the first year return, it implies that US Income received Jan - Apr of the UK tax year is not reported until the following UK tax year?

Thank you

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Old Aug 24th 2020, 8:44 pm
  #48  
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Default Re: Lowdown on Tax Issues

Originally Posted by Russet View Post
For entering the Interest, dividends and gains from the 1099s on the HMRC return do you need to exchange USD to GBP currency as at the date of each individual payment? or can they be grouped using an average rate for the year?

Just to clarify, In the example for the first year return, it implies that US Income received Jan - Apr of the UK tax year is not reported until the following UK tax year?

Thank you
Yes, the first year HMRC return did not report the US income Jan - Apr until the following year. Once you have chosen this method you must stick with it.

I Google “HMRC exchange rates” then use the average monthly HMRC rate for each payment. I keep a spreadsheet with the payments (US pensions, dividends etc) month by month and using the HMRC exchange rate for the month convert to USD.

https://www.gov.uk/government/public...r-2020-monthly
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Old Oct 21st 2020, 10:13 pm
  #49  
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Default Re: Lowdown on Tax Issues

Originally Posted by durham_lad View Post
With the US return however I have to keep a spreadsheet tracking my U.K. pensions and interest on a month by month calendar year. P60s are no use when doing the US return.
Sorry to dig up an old thread but I'm making a load of notes so I have all the great advise on numerous subjects all on one document so I can reference it in the future!

With respect to tracking your UK income and converting that into USD$ do you use the currency exchange on the day of the payment or is there some official rate the IRS will publish similar to the monthly HMRC one?
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Old Oct 21st 2020, 10:46 pm
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Default Re: Lowdown on Tax Issues

Originally Posted by GOALFIRE View Post
Sorry to dig up an old thread but I'm making a load of notes so I have all the great advise on numerous subjects all on one document so I can reference it in the future!

With respect to tracking your UK income and converting that into USD$ do you use the currency exchange on the day of the payment or is there some official rate the IRS will publish similar to the monthly HMRC one?
There are IRS published rates https://www.irs.gov/individuals/inte...exchange-rates .and https://www.fiscal.treasury.gov/repo...e/current.html When I worked for a multi-national company we just used Bank of America mid rates for converting to USD. I think as long as you are consistent, it probably doesn't matter.
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Old Oct 22nd 2020, 7:38 am
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Default Re: Lowdown on Tax Issues

Originally Posted by mrken30 View Post
There are IRS published rates https://www.irs.gov/individuals/inte...exchange-rates .and https://www.fiscal.treasury.gov/repo...e/current.html When I worked for a multi-national company we just used Bank of America mid rates for converting to USD. I think as long as you are consistent, it probably doesn't matter.
I agree.

for my pensions which were a regular monthly income I just used the IRS yearly average which they usually publish by end of January the following year.
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Old Nov 25th 2020, 9:42 am
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Default Re: Lowdown on Tax Issues

Like you, I am confused by the taxation issues about returning to the UK after having worked for a french company for many years and then retired in France. Because I kept my UK house during my retirement and spent more than 91 days in the last 3 years I fail the Overseas and UK tests other than leaving this month to get within the 120 days allowed by the tiers system.

I want to leave after April 6 possibly in the summer so as to have better chance in selling my apartment but to do so, I would have spent more thsn 180 days in the UK etc.

It seems to me that the DTA makes the Statutory Test redundant if it means that there's no extra tax to pay òn the French pension and any share dividends since French tax is supposed to be higher. If the UK consider the retirement as employment, then the tiers system would also work out.
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Old Nov 29th 2020, 12:38 am
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Default Re: Lowdown on Tax Issues

Originally Posted by durham_lad View Post
That all looks about right to me. With the tax treaty you can think that you will be paying the higher of the 2 countries taxes.

When you come to making Roth withdrawals you will be asked about the 5 year rule but basically, if you are over age 59.5 and you opened your very first Roth 5 years earlier then no problem, the withdrawal is all tax free.
Hi Durham Lad,

How does the tax treaty work when you have a regular IRA ? When I retired , I had my Franklin Templeton mutual funds 403B transferred to an IRA with Charles Schwab . How does the UK tax system deal with IRAs in USA? Thanks
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Old Nov 29th 2020, 5:32 pm
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Default Re: Lowdown on Tax Issues

Originally Posted by countrygirl33 View Post
Hi Durham Lad,

How does the tax treaty work when you have a regular IRA ? When I retired , I had my Franklin Templeton mutual funds 403B transferred to an IRA with Charles Schwab . How does the UK tax system deal with IRAs in USA? Thanks
HMRC treat a regular IRA in the USA similar to a UK SIPP in that it is allowed to grow tax deferred and it will only be subjected to any tax when distributions are made at some future date.
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Old Nov 29th 2020, 5:50 pm
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Default Re: Lowdown on Tax Issues

Thanks Durham Lad
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Old Dec 1st 2020, 6:28 am
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Default Re: Lowdown on Tax Issues

Hi Durham lad,

If HMRC treat the IRA savings like a UK SIPP maybe the same applies for a French Assurance Vie which is the same sort of saving for retirement and tax free if kept for a number of years but I have been told that I'd have to close the AssuranceVie before moving back
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Old Dec 1st 2020, 8:06 am
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Default Re: Lowdown on Tax Issues

Originally Posted by cator View Post
Hi Durham lad,

If HMRC treat the IRA savings like a UK SIPP maybe the same applies for a French Assurance Vie which is the same sort of saving for retirement and tax free if kept for a number of years but I have been told that I'd have to close the AssuranceVie before moving back
I really don’t know anything about tax treaties between the UK and France, I am only interested in our circumstances which is the treaty between the USA and UK where all this is spelled out.

Maybe you could start by reading the equivalent treaty with France

https://www.gov.uk/government/public...e-tax-treaties

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