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Declaring UK Taxed Income to IRS

Declaring UK Taxed Income to IRS

Old Feb 24th 2005, 8:33 pm
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Default Re: Declaring UK Taxed Income to IRS

Originally Posted by dbj1000
Residency for tax purposes is unrelated to Permanent Residency or Citizenship. If you are in the US for more than 180 days in one calendar year then you are resident for tax purposes. Full details can be found on the IRS website.

Foreign-Earned Income Exclusion is the obvious way to approach the issue, but given that there is a tax treaty between the US and the UK there are multiple ways to ensure that you are not double taxed on anything.
Correct, If you live/reside in the US you pay taxes on your worldwide income.

Question. After getting the non-residents tax certificate for rental income, will I still pay UK tax? I'm hoping to pay my taxes in the US only. Do I still need to file my UK taxes every year? I am not a UK citizen/national.
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Old Feb 24th 2005, 9:27 pm
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Default Re: Declaring UK Taxed Income to IRS

Originally Posted by Gross50
Correct, If you live/reside in the US you pay taxes on your worldwide income.

Question. After getting the non-residents tax certificate for rental income, will I still pay UK tax? I'm hoping to pay my taxes in the US only. Do I still need to file my UK taxes every year? I am not a UK citizen/national.
Yes, see the link above to Inland Revenue.

Registering means you get it Gross but it does not abslove you of UK tax.

My understanding is that you will need to calculate what you will pay to Her Majesty's Gov and that can be off set against what you calculate you owe Bush's lot. Usually you will pay more to UK gov.
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Old Feb 25th 2005, 2:44 am
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Default Re: Declaring UK Taxed Income to IRS

Originally Posted by Boiler
Yes, see the link above to Inland Revenue.

Usually you will pay more to UK gov.
Agree - until you come to sell it - at which point you'll pay no CGT to UK IR (so long as you meet the non-residency criteria), but will be liable to the US equivalent - does anyone know of any (legal) ways of minimising the US liability....?
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Old Feb 25th 2005, 2:58 am
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Default Re: Declaring UK Taxed Income to IRS

Not really an answer but I am not expecting much positive movement in UK prices.

I was sort of working on the basis that either I would not be here or it would be an issue I would have to address in the UK anyway.
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Old Feb 25th 2005, 3:05 am
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Default Re: Declaring UK Taxed Income to IRS

Originally Posted by Boiler
Not really an answer but I am not expecting much positive movement in UK prices.

I was sort of working on the basis that either I would not be here or it would be an issue I would have to address in the UK anyway.
Yeah, I was planning on selling while I was in the far east and before I returned to the UK....but ended up here on pretty short notice, got my green card too quickly (unusual complaint!!) and will probably end up going for citizenship....bugger.
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Old Feb 25th 2005, 3:11 am
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Default Re: Declaring UK Taxed Income to IRS

Still waiting for the GC, but still liable to US taxes....

I have a friend who is into property investment, I will ask him..
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Old Feb 25th 2005, 3:32 am
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Default Re: Declaring UK Taxed Income to IRS

Originally Posted by Boiler
Still waiting for the GC, but still liable to US taxes....

I have a friend who is into property investment, I will ask him..
appreciate it - thanks!
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Old Feb 25th 2005, 12:48 pm
  #23  
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Default Re: Declaring UK Taxed Income to IRS

Originally Posted by Yorkieabroad
Agree - until you come to sell it - at which point you'll pay no CGT to UK IR (so long as you meet the non-residency criteria), but will be liable to the US equivalent - does anyone know of any (legal) ways of minimising the US liability....?
It rather depends on whether you expect to make more than $250k on the sale ($500k if you're married and filing a joint tax return). If your house in the UK was your primary residence for two years or more then you can exclude $250k/$500k of profit from the sale from Capital Gains Tax over here. If you lived there less than 2 years (you actually have to be living in the house as your primary residence, rather than just owning the property) then you can pro-rate the $250k/$500k. Full details are on the IRS website here.

If you are going to make more than $250k/$500k on the sale then you need to calculate the cost basis of the home, in order to subtract the maximum home value from the amount you sold it for. I don't know much about what's involved, but it can reduce your CG liability. Some information is here.
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