windsong

Well December always makes me think of taxes! I will have my US taxes for 2015 handled by my US accountant after January. Regarding 2015 UK taxes I don't think they will be very difficult as I have only received a small pension from a company in the US this year.

I plan to do the UK tax return myself and I assume HMRC will direct me to the correct forms if I ask them. I may not even have any taxes to pay to the UK this year.

I do have some questions, though:

1. I believe there is a form from the UK I have to send to US accountant to write off UK taxes against the U.S. taxes I paid this year (even if I may actually pay no taxes in the UK)

2. Isn't there another form I need to send to the U.S. if I have more than 5,000 pounds or dollars in any UK. bank account. And even if I don't, does the form still need to be completed? To whom in the U.S. should it be sent and by what date? Is it the end of December? And where can I obtain the form?

3. U.S. taxes are due by April 15 next year and I think UK taxes are also due in April for the previous year. Is this correct for the UK?

4. Are there any other forms I need to fill in?

Thanks in advance.

Shirtback

U.K.:
You can do your taxes online or on paper:
https://www.gov.uk/self-assessment-tax-returns

US:
Your accountant should be able to tell you what you need to send.

Pulaski

3) US tax returns for 1/1/15 - 31/12/15 are due to be filed by 15/4/16.

The UK tax year for income tax runs from 6/4/15 - 5/4/16 (there is an arcane and interesting, but entirely logical, reason for this perculiar tax year), but taxes are due on various dates depending on the type of income being taxed, with there being at least one interim payment of income tax befor the year end for every income type that is not subject to income tax withholding. Four quarterly payments of income tax is a common pattern.

nun

Assuming you are a US citizen resident in the UK then

US taxes due by April 15th for Jan 1st to Dec 31st 2015
UK taxes due online by Jan 31st 2016, paper forms are due by Oct 31st 2015 for April 6th 2014 to April 5th 2015.

You should have filed for UK self assessment by Oct 5th 2015.

You will pay UK tax on 90% of any foreign pension amount before any US withholding. You should send a copy of the UK forms and tax you paid to your US accountant who should resource the US pension to the UK and apply any US withholding and UK foreign tax credits against your US tax bill. If there is no UK tax then there's nothing to do.

Your accountant should deal with any US foreign account informational forms so you must tell them about all your accounts....they should be asking you if you live in the UK!

windsong

Thanks, Pulaski and Nun.

I didn't know about the self assessment so I need to do that.

I read somewhere that you don't have to file a return if you earned less than £2500 in the year. I earned over that amount because of my US company pensions but less than what I believe to be the personal exemption which is around £9000, so I think this means that I will have to send in a return to HMRC but will pay no tax. ( I haven't been here that long.) Does this sound about right?

I probably need to call HMRC which I will do on Monday.

Thankfully, next year looks a lot better for me job-wise.

windsong

And then there's FBAR and FATCA. Not quite sure what they are but I believe FBAR is a U.S./IRS form that asks for details of all bank accounts in which there has been more than 10,000 dollars in it at any time during 2015. Does it inquire only about UK accounts or those in the U.S. as well? There may be one in the U.S., an old one not used in a few years, that has zero in it but I can't remember if I closed it. I thought US banks automatically closed accounts not in use after three months but I am not sure.

I do hope my US CPA knows about FBAR and FACTA.

Pulaski

It's foreign (non-US) accounts only.

durham_lad

I'll be interested in what HMRC say as my wife will be in a similar situation next year, but I'm thinking that since her income is foreign that she will need to file as there is no way for HMRC to know what income she is receiving or if it is less than the exemption.

theOAP

For US 2015 tax year, payable in 2016:
If you are resident outside of the US on 15 April 2016, (in the UK, for example) then your 2015 tax return is not due until 15 June 2016. FBAR (114) will be due 30 June 2016 for 2015 tax year. Starting in 2017 FBAR (114) will be due on 15 June (the same date as your tax return, although still declared to Treasury, not the IRS).

https://americansabroad.org/issues/f...-date-changed/

The UK personal allowance for UK tax year 2015/16 is £10,600.

https://www.gov.uk/government/upload...rate_limit.pdf
(See chart, midway down.)

"You usually need to fill in a Self Assessment tax return if you’re a UK resident with foreign income or capital gains.

You don’t need to fill in a tax return if your only foreign income is dividends under £300 in total and you don’t have anything else to report."


https://www.gov.uk/tax-foreign-income/paying-tax

durham_lad

Thanks OAP, good info as always

Richard8655

Yes, this is correct. The U.S. requires reporting of foreign bank accounts in 2 ways. Any foreign bank account and interest earned is reported on the standard IRS 1040 return and associated forms and schedules. If the account has over $10,000 USD equivalent, FBAR comes into play requiring reporting that account and total assets online at the Dept. of Treaury's reporting website. An online account is required to be created since paper FBAR reporting has been eliminated as of last year.

Most good U.S. Tax software (such as Turbotax or Taxcut) will easily guide you through these steps and generate the appropriate forms. No need to hire a tax accountant in my opinion, as the software with its questionaire section can handle most situations.

(FATCA is the law behind all this reporting.)

nun

Actually FBAR has been around for a long time before FATCA. FBAR reporting is separate from your tax return and done here

BSA E-Filing System - Welcome to the BSA E-Filing System

If you meet certain higher limits than $10k in foreign accounts you will have to file an 8938 with the IRS.

Richard8655

Actually I was generalizing as the point was not the history of these laws but what the reporting requirements are.

I wouldn't recommend entering foreign bank account data into the Treasury Dept. reporting website until one completes the IRS tax return for the year. It's typically the last step in the the process for accuracy and consistency purposes.

durham_lad

I believe they are now bringing the timing of these 2 events together next year. It used to be June 30th for the FBAR report but next year it is April 15th, so if you are in the habit of filing for an extension for your tax return you may have to be sure and file your FBAR ahead of your tax return.

Maybe someone can confirm that filing for an extension for your tax return does not give you an extension on your FBAR reporting, but since they are 2 different organizations and the balances on your previous year's bank accounts have nothing to do with your income tax return I don't see why an IRS extension to file will automatically apply to the FBAR date.

Richard8655

Good point. I'd be interesting in clarification of these changes for next year as well. But having worked for the US Govt, I wouldn't be surprised if separate extensions will be required.