brokenhearted.

Currently still sorting out my deceased husbands affairs, and considering my next step in life journey. I am a greencard holder married to USC, since he passed at the end of January a lot has been going on, along with the usual inability to function or function in small spurts.

Today I have more or less decided to go back to the UK once I can get all the ends tied up, which includes selling some assets I will not need. Land, some personal property and I can liquidate some smaller financial items such as a small account that he would "play' with shares. Some of the money will help with final bills etc and costs to get my dog ready for the journey with me.

I have to admit that I am clueless when it comes to IRA Roth's something my husband was always in charge and we really did not anticipate this happening at this time - so I am committed to a steep learning curve.

I anticipate leaving with IRA Roth accounts ( they are spread over 4 accounts ) and a survivor annuity provided by the civil service. We rented and have no house to sell - so I am not expecting to exceed the 2 million threshold for expatriation but read that IRA' Roth s have a different treatment under expatriation even if you do not meet the 2 million threshold?

I am ok with the other criteria - filed taxes, and tax responsibility over the past five years.

Anyone throw any light on the treatment of IRA's etc or is this only in the case of being a covered expatriate?

scot47

Would it not be advisable to get a US accountant to handle this ?

Dorothy

I would add getting your American citizenship before you go back as well. Right now you may want to go back to the UK, but you never know what the future holds and you may want to mov back to the US at some point.

My condolences on the loss of your husband. Take care of yourself.

brokenhearted.

Thank you Dorothy for your kind words - The only reason I have a green card was because of marriage so I can say I very much doubt I will be seeking to return to America in any other capacity than the occasional visitor. Friends and family are all in UK.

theOAP

First, let me add my condolences to those above and to also say please take care of yourself during this stressful time.

From what you have indicated, stressing over the expatiation form 8854 is not necessary. The process of filing 8854 is in two parts. Most, such as yourself, will only be concerned with the first part which is a simple listing of the FMV (full market value) of all assets minus any debts associated with those assets. Just be sure the total amount of all assets is below $2 million. Filing 8854 is the official way to withdraw from any obligation for filing tax returns with the IRS in the immediate future. As you have identified, IF assets total more than $2 million, then one becomes a covered expatriate and the requirement to complete the second part of the exercise is required (which can be financially painful - avoid at all costs). If below $2 million, then the initial completion is also the final filing.

The eventual distributions for ROTH IRAs are currently tax free in both the US and the UK. If calculating the Exit Tax came into play (part 2 of the exercise if the FMV total were over $2 million) then ROTHs have special treatment (and hopefully, not a problem for you).

Is the "survivor annuity provided by the civil service" from the US? As mentioned above, it may be worth contacting a dual US/UK tax advisor in the UK, once you return to the UK. As stated above, the ROTHs are tax free in the US as should be the "civil service" annuity if you are resident in the UK, but the eventual distributions from pensions (annuities), based on current comments from the UK, do not always go smoothly, but that's a long way down the road and not something to worry about now.

Will you sell the land before returning to the UK?

IF, by chance, the FMV of the annuity, plus the ROTHs, plus the personal assets and accounts, and plus the land do total over $2 million, then seek advice from an advisor now, asking whether the ROTHs can be ignored for initial valuation. It's a somewhat grey area under the Gift Tax rules of the initial completion of 8854. (Estate Tax rules are then used for calculating the Exit Tax if over $2 million).

Sorry for the rambling post, but the rules around 8854 are at best vague and often subject to an individual advisors interpretation. Just be below $2 million.

PrairieWriter

I don't have any advice to add, except that we are moving back to the UK next year as well. I'm just so sorry for the loss of your husband. Sending big hugs and lots of love at this difficult and undoubtedly very lonely time.

brokenhearted.

Many Thanks for all your kind words -

To OAP- thank you for that overview - I am relieved to hear that the initial phase is likely to rule me out of expatriation tax. I am looking to sell the land before I leave, though I am aware of the possibility it may not happen before I leave.

The survivor annuity is paid by the US Government as my husband worked for FAA and I totally understand it will be worth getting a tax professional to deal with taxes for both US returns and UK returns regardless of how the expatriation works out for me.

I will need to do the calculations as you indicate - see what can be jettisoned if needed to get below that magic number.

Many Thanks