A few questions on taxes
#1
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Joined: Jan 2014
Posts: 4
A few questions on taxes
I will be moving to the USA to be with my American wife once the long and painful IR-1 process is over and I have a few questions about paying taxes both in the USA and the UK.
1) All my income will be from the USA. Will I have to pay any UK income tax?
2) I have some savings and a pension in the UK. Will this be liable for any tax in the USA? If I transfer it to the USA, will I have to pay tax on the existing savings?
3) I will be keeping some money in a UK current account to finish paying some debts. What is the tax situation with this?
4) I will probably come into some inheritance in the UK in the next few years. The same with my wife in the USA. We will be jointly filing in the USA unless it affects her grad school funding. Will we have to pay tax in the USA on our UK inheritance and vice versa?
5) Is it worth making voluntary NI contributions and are there any implications from this other than being able to keep my state pension (I am 26).
Thanks in advance for your replies
1) All my income will be from the USA. Will I have to pay any UK income tax?
2) I have some savings and a pension in the UK. Will this be liable for any tax in the USA? If I transfer it to the USA, will I have to pay tax on the existing savings?
3) I will be keeping some money in a UK current account to finish paying some debts. What is the tax situation with this?
4) I will probably come into some inheritance in the UK in the next few years. The same with my wife in the USA. We will be jointly filing in the USA unless it affects her grad school funding. Will we have to pay tax in the USA on our UK inheritance and vice versa?
5) Is it worth making voluntary NI contributions and are there any implications from this other than being able to keep my state pension (I am 26).
Thanks in advance for your replies
#2
Re: A few questions on taxes
1) No
2) Depending on how much income you have, possibly. It will certainly have to be declared to the IRS.
3) If more than 10k, it needs to be declared.
4) Inheritance tax will apply from the country in which the amount is received, again, it will need to be declared as income to the IRS.
5) No other benefits, but it's worth doing.
2) Depending on how much income you have, possibly. It will certainly have to be declared to the IRS.
3) If more than 10k, it needs to be declared.
4) Inheritance tax will apply from the country in which the amount is received, again, it will need to be declared as income to the IRS.
5) No other benefits, but it's worth doing.
#3
Re: A few questions on taxes
I will be moving to the USA to be with my American wife once the long and painful IR-1 process is over and I have a few questions about paying taxes both in the USA and the UK.
1) All my income will be from the USA. Will I have to pay any UK income tax?
2) I have some savings and a pension in the UK. Will this be liable for any tax in the USA? If I transfer it to the USA, will I have to pay tax on the existing savings?
3) I will be keeping some money in a UK current account to finish paying some debts. What is the tax situation with this?
4) I will probably come into some inheritance in the UK in the next few years. The same with my wife in the USA. We will be jointly filing in the USA unless it affects her grad school funding. Will we have to pay tax in the USA on our UK inheritance and vice versa?
5) Is it worth making voluntary NI contributions and are there any implications from this other than being able to keep my state pension (I am 26).
Thanks in advance for your replies
1) All my income will be from the USA. Will I have to pay any UK income tax?
2) I have some savings and a pension in the UK. Will this be liable for any tax in the USA? If I transfer it to the USA, will I have to pay tax on the existing savings?
3) I will be keeping some money in a UK current account to finish paying some debts. What is the tax situation with this?
4) I will probably come into some inheritance in the UK in the next few years. The same with my wife in the USA. We will be jointly filing in the USA unless it affects her grad school funding. Will we have to pay tax in the USA on our UK inheritance and vice versa?
5) Is it worth making voluntary NI contributions and are there any implications from this other than being able to keep my state pension (I am 26).
Thanks in advance for your replies
2) You pay tax to the IRS on worldwide income so therefore you will pay tax only on income paid and not the principle.
3) if the amount is greater than $10,000, you have to declare it but only income (interest, dividends, etc.) from that amount will be taxable. Any income taxes paid in the UK can be used as tax credits against US taxes owed.
4)There isn't any federal inheritance tax (tax on the recipient) in the US but only an estate tax( tax on the donor). Since the donor is not a US citizen or US LPR, there will not be any federal tax due.
#4
Re: A few questions on taxes
As for NIC's, it's worth doing as it's only a few squid.
#5
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Joined: Apr 2013
Posts: 5,154
Re: A few questions on taxes
How does it work for a person who has moved from the UK to the US half way through the year after their ISA interest was paid in April. Is that income taxable by the IRS?
#6
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Joined: Jan 2014
Posts: 4
Re: A few questions on taxes
Thanks for the replies.
So just to confirm I pay tax in the UK on the savings which automatically gets taken off the interest.
However even though this is being taxed in the UK the IRS wants a piece of the pie...but I can claim the tax back off the UK government to pay the IRS?
So just to confirm I pay tax in the UK on the savings which automatically gets taken off the interest.
However even though this is being taxed in the UK the IRS wants a piece of the pie...but I can claim the tax back off the UK government to pay the IRS?
#7
Just Joined
Thread Starter
Joined: Jan 2014
Posts: 4
Re: A few questions on taxes
Oh yeh what about ISAs? Should I move my money out of them because I won't get any tax credits?
#8
Re: A few questions on taxes
Thanks for the replies.
So just to confirm I pay tax in the UK on the savings which automatically gets taken off the interest.
However even though this is being taxed in the UK the IRS wants a piece of the pie...but I can claim the tax back off the UK government to pay the IRS?
So just to confirm I pay tax in the UK on the savings which automatically gets taken off the interest.
However even though this is being taxed in the UK the IRS wants a piece of the pie...but I can claim the tax back off the UK government to pay the IRS?
#9
Re: A few questions on taxes
http://wills.about.com/od/stateestat...cetaxchart.htm
#10
Re: A few questions on taxes
If someone arrives on an Immigrant Visa, and then goes back to home country for a few months, U.S. federal tax liability still applies from the date of first entry.
#11
Re: A few questions on taxes
A new arrival with an Immigrant Visa only has to declare worldwide income arising after first entry to the United States. However there are a number of restrictions on what exemptions/deductions can be claimed and in particular, you can't file married/joint (unless you elect to include all income for the entire calendar year).
If someone arrives on an Immigrant Visa, and then goes back to home country for a few months, U.S. federal tax liability still applies from the date of first entry.
If someone arrives on an Immigrant Visa, and then goes back to home country for a few months, U.S. federal tax liability still applies from the date of first entry.
http://www.irs.gov/publications/p519/ch01.html
#12
Re: A few questions on taxes
I always filed a TD F 90-22.1 (FBAR this year) and that was shown on Schedule B Part III as a ;yes' to items 7a & b.
#13
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Joined: Apr 2013
Posts: 5,154
Re: A few questions on taxes
I'm curious about the ISA situation as well. Of course, I don't get taxed on it in the UK, but when H&R Block do my US return, they never include it as income. I do tell them about it, and I mention it is tax-free in the UK, and they don't put it on my 1040A Schedule B form. This may because the interest has always been below $1500, but I'm not certain.
I always filed a TD F 90-22.1 (FBAR this year) and that was shown on Schedule B Part III as a ;yes' to items 7a & b.
I always filed a TD F 90-22.1 (FBAR this year) and that was shown on Schedule B Part III as a ;yes' to items 7a & b.
#14
Re: A few questions on taxes
I'm inclined to agree now that I've rad a bit more about it. I notice from looking at old US returns that it is just the 2012 return she didn't include the ISA interest. Not sure how they will resolve that.