starmanz

Hi all!
I'm an expat based in Los Angeles and I have a opportunity to cash in
some UK based shares and have the proceeds wire-transferred to
my US bank account.
BUT... I'm worried about falling foul of the IRS which, of course,
would be very bad!
Does anyone know the payments I would have to make to the UK and US
authorities to ensure that I stay legal and keep both tax authorities
happy.
Is it classed as a 'gift' or an 'overseas sale' and what would be my
liability at tax time?
Obviously, I'm interested in minimising any payments I would have to
make!!
I have heard that keeping everything in the UK and using a UK
credit/atm card in the US drawing from the UK account would be an
idea but it doesn't sound too kosher to me!
Thank you all very much

paddingtongreen

I suggest you see an accountant. Your US tax return has a declaration, on Schedule B, about foreign accounts. Many people used to ignore that, but with Homeland Security, I think that would be unwise, now.

Thydney

If it's taxed in the UK you shouldn't pay tax here and if it's non taxable in the UK then it's non taxable here.
If in doubt pay for an opinion.

TRPardoe

I am working on taking my UK Industry Pension. The Pension Fund told me to call the Inland Revenue's "Centre for Non Residents" (0115-9742142). They are sending me a form to complete and send to the IRS. The IRS then certifies that I am a US tax payer and they send the form back to the IR. After that I can take my Pension tax free in the UK.

Maybe you should give the above number a call so you don't get liable in 2 countries.

As you know, a US Tax payer has to declare all world-wide income and any foreign account with more than ($10,000 ???) in it in any tax year.

(I am not an accountant or a lawyer. Take anything I say with a pinch of common sense).

TRPardoe

Are you sure about that?

Nothing here is tax free except injury compensation cheques. Try winning the UK lottery and then telling the IRS that it is tax free.

Thydney

I'm in a similar position pension wise had our tax done by HR Block thats what they told us (twice)

Philgr

Definitely get advice from someone with knowledge of the tax treaty between the two countries - the tax treatment is very different and the chance for dual taxation still exists. You will also need to consider how long you have held the chares, what their original purchase price was and how you got the shares - if they were employment related (i.e. ESPP or option grants) the tax will get even more complicated.

Yorkieabroad

I don't know about the pension situation, as I've not needed to investigate that, but as a general rule, using the "if its not taxable in the UK then its not taxable here" approach is likely to bring a lot of trouble. l can think of numerous things that, as a non-UK resident are not taxable there, but are taxable here. As others have said - best to get a professional opinion.

mandpete

When Standard Life 'floated' a couple of months ago my husband got a cheque as he isn't a UK resident and was therefore not eligible to keep hold of the shares.

I'm not sure whether we need to declare this on our tax return. Does anyone know or should I seek 'proper' advice.

starmanz

Thank you very much. I will seek professional advice as it sounds like a total nightmare to attempt alone! :scared:

Yorkieabroad

I guess you would declare it pretty much the same as a dividend on a UK share - ie it would be taxable here, but you would get a credit for any UK tax paid on it.....but take particular note of my second word!

kevntrace

Depending on which part of HR Block prepared your tax return, I wouldn't trust them as far as I could throw them on this type of information.

If you went as a regular punter off the street, I would treat HR Block's advice which a bucket of salt. If you went to one of their "Executive" offices (where a CPA looks over the accounts), that would have a little more merit. But as already has been stated, you need to speak with someone familiar with the tax treaties between both countries.

BTW I'm not an HR Block 'hater' - they are a fine tax preparer if your situation fits nicely within their boundaries.

scrubbedexpat099

CPA's who are up to speed on US and UK taxation are few and far between.

Allegedly there is one in CO.

Probably cost more for advise than the gain.

Thydney

I agree with all the comments made We were sceptical too but the guy actually checked the manuals and read them out to us He spent a lot of time on our 'case' basically because it was different from his run of the mill stuff. I think the key may be that you have declared it to the UKIR rather than it not being declared anywhere.
I wholeheartedly agree if in doubt pay for a pro. Feel free to let us all know what the answer is though