Aquapanther

Hi guys,

I will now be living permanently in the US.
For immigration reasons I will be unemployed for a few months.

Until now I was working for a UK company on temporary relocation to the US sister company, so I was paying UK national insurance contributions (and pension deductions), and then there was a "voluntary deduction" to bring my UK salary to zero. The salary was then getting converted to dollars at an agreed exchange rate, and the US company was deducting federal tax (no state tax due) and I was getting the balance.
This means that my UK tax code is NT.

You maybe didn't need to know all this, but it may be important for my next question.
Do I need to inform the tax man (or any government department) that I an now permanently in the US, and if so how do I go about doing that?
How do I go about paying voluntary NI? (I know there is a big thread about it but it mostly deals with the possible change in law).

Do I need to tell my banks and credit cards that I'm in the US (they are registered at my parents address)?
How many CC would you suggest keeping open?

Anyone else I need to tell?


Cheers.

BritInParis

If you were PAYE then Form P85 is how you inform HMRC. If you have an Amex Card then Global Transfer is a good way to get you started in the US. As for the rest, whether to keep them or not will depend on how permanent your move will be.

Glasgow Girl

With regard to voluntary NI, if you’re living abroad, read leaflet NI38 and fill in form CF83 (found at the end). Send it back to HMRC using the address on the form

Make sure you declare your UK bank accounts on your FBARs and tax forms if you meet the reporting criteria. Either way, make sure you report any interest or income on your tax return. If your registered address is in the UK and not your US address then it will look like you are trying to hide the accounts with draconian penalties if unreported amounts are detected (and they likely will be). Also, if you are here permanently then sell off any financial investments that you may have in any unit trusts, funds, etc and reinvest the proceeds here. The FBAR reporting requirements are onerous and the tax due is excessive, so better to just get rid of them and start again. Google PFICs (as these investments are categorized over here) if you have any such investments and you will quickly get the picture and want to be rid of them as soon as possible!

I kept one current account open with an associated credit card that I use when back in the UK, that is all I have ever needed.

Aquapanther

Thanks, I'll look into that form!
Already sorted the AmEx thanks...had it a few months now.

Thanks, that's a good form!

I have a help to buy cash ISA I have and the interest has been reported to the IRS.
As it is likely that I will buy property in the US before any possibility of going back to the UK (therefore making the HtB part void) I will just close it down and bring the money over here.

With regards to my banks and credit cards...do I need to tell them that I'm living in the US or can I just leave the address as my parents?

Glasgow Girl

So long, as you declare the accounts on an FBAR if required (needed if the aggregate total of all your foreign accounts exceeds $10,000) and on Form 8938 (with your tax return) if your foreign assets exceed $50,000 on the last day of the year, or $75,000 at any point during the year (double these limits if you are married) and declare the income on your 1040 tax return then you are probably ok if you leave the accounts at your parents address although your bank may not like it. I did the same for several years when I first moved over here. But in reality, unless you are trying to hide something there is no downside to changing the address. I get a statement from the Nat West sent over here, and a statement from the NationWIde Building Society. They take a few extra days to arrive but those banks do not seem to care where I live.

I would get rid of the ISA as soon as you can as that opens up a whole additional set of forms that are required because it may be considered a trust and the penalties for not reporting those correctly are severe.

I don't want to be a scaremonger but the reporting requirements on foreign assets are ridiculous, the tax due is excessive and the penalties for not complying are totally out of proportion to the "crime" committed. So, best to be shot of it all as soon as you can. I say that as one who had many sleepless nights once I understood the impact of my existing UK investments. I liquidated all of them and are extremely happy that I did so. Even taking into account the poor exchange rate right now, I would do the same. Whatever you would save in waiting for a better exchange rate will be paid back by significantly higher taxes and time spent on the paperwork, and the constant nagging doubt that you have not dotted every "I" and crossed every "t".

Aquapanther

Thanks, will do!
Ernst Young are/were sorting out my 2016 and 2017 taxes (my ex-employer paid for it) so at least that get that part out the way...I'll need to find someone to do it for 2008 though so yip...best making it as easy as possible!

Glasgow Girl

I still file an FBAR and Forms 8938 with my tax return because I have several UK Personal Pension accounts that have not yet matured. It is impossible to transfer these type of accounts over to the USA because the IRS does not allow it, and cashing them in is not financially smart in my case. Given that there is no current income and they are not a mutual fund type of investment, I honestly do not know if these are required to be on either form but given that there are no penalties for over reporting, I declare these accounts to be on the safe side. I make my best guess as to the yearly value and have a sound and simple rational to support it if questioned. Being pension accounts there is no income so that simplifies the reporting considerably. The FBARs are filed electronically, it is easy and straightforward to do yourself, you do not need an accountant. Turbo Tax handles Form 8938 and that is also easy to do yourself. Again, the key fact being that there is no income to deal with. My point is that you do need an accountant or expert knowledge to do this yourself and therefore you can save considerable dollars if you do not otherwise need an accountant. And, most accountants do not understand how to report foreign accounts anyway, and those that do are uber expensive.

Now, some people will argue that pension funds are also trusts and that you need to file trust forms for those (those forms are the most confusing and onerous of them all). I do not subscribe to that school of thought. Some people believe that to be so and some do not. I believe the IRS has never made a clear statement on this, so even they seem to be unclear about it. Despite all the scare mongering by FBAR lawyers and many others, I do not believe that the IRS is out to get people on technicalities so even if at some point it is declared that trust forms are required then I will comply going forward and will not lose any sleep about the past as the IRS had all the information they could ever have on these accounts in one form or another. They are not out to get the little guy who has paid their taxes and clearly made best efforts to comply, although they could if they wanted to and this is what people use to scare the **** out of you on these issues.

The myriad (and ever changing) reporting requirements for foreign investments makes it almost impossible to be 100% technically correct. The professional advice that I had (from someone who originally worked in the IRS) was that I am fine with what I am doing. So, you have to determine your level of risk and go forth with that.

Hope this has helped you. As a caveat, I am not a financial professional in any sense and therefore everything I have said is a personal opinion only. Clearly I have been here long enough to CMA!