JBYoung6

Does anybody have personal experience or knowledge of what the tax implications are of being a dual citizen of the UK and US ?
My situation is that I currently reside in the US but will be moving to the UK soon. Have been weighing up whether or not to get US Citizenship or not before I leave, but have little knowledge of the tax implications.
Being a Dual citizen makes sense in a lot of regards as my wife is American and our 4 kids are Dual citizens.
Any help or insight would be much appreciated

nun

Simply if you become a US citizen you will be taxed on your worldwide income wherever you live. If you reside in the US already you know what it's like to file US tax forms and if you move to the UK you will have to do that as well as filing UK taxes. The rationalization of the two systems is accomplished by local rules and the US/UK tax Treaty. Your investing life will be complicated by both US PFIC and UK distributing funds rules.

penguinsix

We outline some of the issues you need to consider with US citizenship here:

http://britishexpats.com/wiki/Pros_a...US_Citizenship

As a US citizen, you have to file a tax return anytime your income is > $9,000 USD (more or less). HOWEVER, for most people, due to overseas income exclusions, housing expense exclusions and dual-tax treaties, it is unlikely that you will actually owe any taxes to the US government.

The more annoying problem is paperwork. You have to fill out the tax form, you have to fill out an FBAR on foreign bank accounts, and you have to deal with FATCA if you have substantial assets. You also have to report on any foreign businesses you might own. The paperwork can add up.

In your case, your wife and kids are already going to be going through this, so it might not really make all that much of a difference to you overall to have to go through with this.

Take a look at the mirror of this site: US expats living in the UK. They'll answer some of the tax questions and also give you, or your wife, some advice on the adjustment to life in the UK for an American. Helpful on a range of issues from taxes to schools and, most importantly, where to find decent Mexican food.

http://talk.uk-yankee.com

Good luck.

J.JsOH

Can someone kindly help with some minutia of Tax filing?

As UK resident, USC/UKC I'm now down to filling in the boxes on the HMRC online self-assessment form for USA 401(k) withdrawal. When I took the annual regular withdrawal of 401(k) there was 20% federal Income Tax withheld

Assuming I have no other income, and ignoring personal allowances for the sake of this question, I see two ways to go;

On UK forms, Enter last years 401(k) withdrawn full amount arising as Foreign Pension
then enter the amount 20% Foreign Tax taken off.
Then report the UK tax paid to IRS to get credit / refund.

Or

Enter last years 401(k) withdrawn full amount arising as Foreign Pension
but not claim UK for the Foreign tax paid, take a UK tax hit on the full amount 401(k) arising and report the larger amount UK tax paid to USA IRS and get my original 20% credited by USA?

Any guidance anyone?


Then another unclear is;
The Dual Tax Treaty and UK (DT19876B referring to contributions but I read it for withdrawals also) declare 401(k) as pension scheme. Pensions income is filed only in country of residence per DTA.
If this is the case that 401)k) is a pension scheme reported only to country of residence then do I or don't I report 401(k) withdrawal to IRS?

Thanks. My mind is going in circles.