countrygirl33

I am a recently retired dual citizen with homes in USA and UK. Anyone know how it works if I stay in the UK over 183 days ? Will I automatically be sent a notice to pay UK tax or will I be
expected to request a self assessment to show I pay tax in the USA? My pension is paid into my USA bank, so I have no income going to the UK. How does it work with tax forms for both countries with the different tax years? Also, if I do decide to make the UK my primary residence will I still be able to keep my bank accounts and credit cards in the USA ? I have been coming back to the UK every year and now having spent more time here really feel that I may want to return permanently, so I want to spend the majority of my time here before I make the decision..

robin1234

theOAP

The following is the HMRC gospel on residency and tax obligations:
https://www.gov.uk/government/public...-test-srt-rdr3

Read carefully as there are loopholes depending on your specific situation, although 183 days seems to be straight forward (3.1).

countrygirl33

Thank you so much for responding .. So with my pension being deposited in USA , will I have to pay tax on it in UK ? All of my bank , IRA's etc interest is in USA . I have no income going to UK . I'm assuming I just continue to do my USA tax returns as usual and then have to fill in a self assessment if I overstay the 183 days? When they see how much Fed tax and Cal state tax I pay that should satisfy the UK as we have a reciprocal tax agreement ? Is this doable without paying for global tax accountant? If not, any idea how to find someone in UK that is reasonable and knowledgeable? I'm leary of just contacting some company from the internet.. I'm in Lancashire

countrygirl33

Thank you OAP . I will read

theOAP

IF you are resident in the UK for tax purposes (see SRT test above), you will file a UK Self Assessment tax return and declare all your worldwide income. That means all income from the US as well. You pay HMRC any tax owing on that income.

As a US citizen you will always file a US tax return, declaring all your worldwide income, no matter where in the world you are resident.

If you are resident in the UK for tax purposes, then HMRC have first rights of taxation on your worldwide income. Since you are retired, you would file a US tax return and claim FTCs (Foreign Tax Credits) for the amount of tax you pay to the UK. That normally, but not always, offsets any US tax due. Since you have no earned income, filing FTCs means there are no time related residency requirements for periods spent abroad for the US tax return.

Owning a property in both countries may someday (some years) require extra reporting.

A very many of us file returns to both countries without the aid of global tax accountants. Many even manage to avoid turning into tax obsessed ****'s such as yours truly.

See if you will be liable for UK tax with HMRC first. If so, you may want to rethink your plans for time spent in the UK. Check the sufficient ties test in the SRT info - it may be a way out due to the US home.

If you do relocate permanently to the UK, then dual reporting is inevitable.

countrygirl33

Thank you OAP .. Do you know about the form 8938 which I read needs to be filed with IRS if you have assets over 200K ? What are considered assets, my home in UK and my off shore bank account ? Are USA pensions and USA bank accounts considered assets ?

theOAP

Generally, your home in the UK is not included on 8938. Any account you may have in relation to that property, such as funds from the letting or a maintenance fund would be included if you are named on the account. A property held for profit by a group you are part of is included.

Foreign accounts such as any bank or brokerage account are included. The value of a foreign pension is included. Gold bars, yachts, private jets, collectible antiques and old masters, diamonds, etc. which are held privately are not included on 8938, otherwise some US Senators and Congresspeople would have to file 8939.

Accounts sourced in the US (bank, pensions, stocks and shares) are not included. US stock sourced from a UK broker is included.

The instructions for 8938 are very unclear in places, but the threat is a $10,000 penalty if you get it wrong. For normal, everyday people - do the best you can. If it's wrong, the penalty may be overlooked.