Sell27

Thank you so much for the feedback here. This has been very helpful and quite concerning that I would have been completely oblivious to this!

A few things have been mentioned that are applicable to me and my husband. A lot to think about to make sure we do not break any rules.

Firstly we BOTH have Stocks and Shares ISAs (Individual Savings Account) where we trade fairly regularly. For those who may not know, the ISA's have a personal saving allowance each year that is tax free on any interest earned in UK. I have already spoken to a USA account (Deloitte) that have explained any earnings from the ISA will be taxable in the USA.

My ISA Stock and Shares, is the one that we normally do a fair amount of trading on. With the information above, I now understand that neither of us can regularly trade on our ISA's. Which will have an impact on our income. As I have an L1A and (whilst he has L2), the odd balancing of portfolio will be okay. Once my Husband has his EAD, then he should be okay to day trade?

We will have at least one rental property in the UK, I understand this is okay, as it is considered a passive income.

My Husband is a Director of his own limited company where he does IT consultancy work in the UK. We now understand that he can not do any work for this company, e.g remote projects from USA. Therefore from the date we arrive in USA he will no longer be earning any money through the company. Now I am wondering do we need to also make sure he completely closes down the company before he leaves? As although he will not be working (earning any money) he will still have 'management' duties for the company e.g filings for UK.

Not to mention I have a Youtube channel, it is not monetized and I do not see it being so for a long time, but I am now very wary of it it does in future. Therefore I understand the importance of the Greencard.

Again, thank you to the OP and everyone who has contributed.

Pulaski

ISA's are a whole separate matter as they create a legal and tax nightmare when you are subject to US incomes taxes. You might want to start a separate thread on that. I do not have personal experience, but the only advice I have ever seen is to liquidate an ISA before you arrive, which is what I did. I am not sure what would happen if you are definitely planning on returning to the UK, but as far as I remember, ISA's are treated as an off-shore trust, which is a huge problem from a tax perspective.

ETA: I see you mentioned "Green Card", so the answer is simple - liquidate your ISA's before you leave the UK.

Owning and renting out your home will be a tax time bomb, that can lead to CGT bills in both the UK and US, and the US CGT issue has a sting in the tail - depending on the movements in the exchange rate between the date your mortgage started and the date you paid it off, there can (will be, when GBP has fallen against USD over the life of your mortgage) be a notional "gain" that is subject to US CGT, and the amount can dwarf the CGT payable on the sale of your home. IIRC a few years ago one member of BE ended up paying $70,000-$80,000 tax on the "gain" on their mortgage.

scrubbedexpat099

Just following up from Mr P, the issue arises as the US and the UK have totally different systems, ISA's and other tax efficient products are a product of UK Legislation, not US and the US looks at your worldwide income once you are tax resident.

THE CGT issue arise I understand because they look at the original value not when you became tax resident. Anyway I agree with Mr P horribly complicated.And potentially financially painful.

Nutmegger

Presumably your OH is going to apply for an EAD. Once he has that, he can work for his company from the US.

Noorah101

There is no need to shut down his whole business. He just can't do his daily tasks from inside the USA. He could come to the USA, apply for the EAD, get the biometrics (fingerprint and photo) done, then return to the UK to keep working for a couple of months, if necessary, until his EAD arrives.

Rene

tht

You need to understand that the tax and immigration rules may not be the same. If I recall rental property income is considered passive income even if you actively manage it, as long as you spend less than 750 hours a year managing it. But just because it’s passive from a tax perspective does not mean USCIS would not consider it “work”. It is probably dependent on how you do it. If you had a property manager in the UK doing everything you should be OK, if you were actively seeking new tenants, organizing repairs etc you may cross a line because that is something a property manager here does as a paid job.

S Folinsky

Similar questions came up recently in another thread. I am not giving any advice here. What I can tell you is that this subject comes up a lot in discussions between immigration lawyers. Although there is the understandable desire for certainty in life, your questions are the subject of heated debate between immigration lawyers. You may very well consult with three different immigration lawyers who give expert advice with three different answers.

Much in the way of discussion is based upon the venerable 1965 case of Matter of Hira. That case dealt with the dividing line between doing business as opposed to providing labor for the purposes of a B-1 business visa. Although not directly “on point” for your questions, it does provide a basis of determining what is permissible and what is not permissible employment. However that line is quite fuzzy — the basis of the dispute.

Many years ago I handled a case of adjustment off an H-1 [equivalent to present day H-1b] where the spouse had engaged in the type of activity like what your husband does. Former INS wanted to deny the spouse on basis of unauthorized employment. We argued Hira and got case approved. In retrospect, I think the case could’ve gone either way.

If you have an attorney, you may want to consult on the issues. If the answers are fuzzy [as they may well be], you may have to evaluate your aversion to risk.

Good luck.

Sell27

There is certainly a lot to consider when it comes to the tax implications. Fortunately my company have provided accountancy consultancy services for the next year (UK and USA) and have "educated" me and will help to file my taxes. There has been A LOT to digest as the tax systems are quite different. Understanding what the right financial choices are, is quite complex! No doubt I will make mistakes.
Lets hope I do not end up with a large unexpected tax bill...

As for the interim period, whilst my Husband waits on his EAD, that is now a lot clearer now and we will not take any risks.

Sell27

Thank you and duly noted. I definitely plan to not take any risks.