A money-grabbing son of a gun writes...
May 18th 2001, 4:04 pm
#1
Guest
Posts: n/a
A money-grabbing son of a gun writes...
Stupid question, but it has only just occurred to me.
When I eventually move to the USA, I will have paid a few thousand pounds in tax on
this side of the Atlantic. The Inland Revenue, thanks to the pay department at work,
assume that I am on course to be in the usual tax bracket I've been in for nearly
fifteen years because I'm contributing as per normal. As it stands, I will have paid
more than expected because I would have earned less than expected at financial
year's end.
Does that equate to a tax refund at the end of the financial year (which will be
April 2002 here in the UK) or do the IR over here get to send on my details to the
IRS over there and I'll get bugger all back. Or do I get money back in Britain, only
to pay it to the IRS in the US because I have to disclose foreign earnings...?
I'd be rather pleased if someone now tells me I legally get a rebate without recourse
!!! I wasn't banking on it (pardon the pun), but it would be nice.
Shawn.
When I eventually move to the USA, I will have paid a few thousand pounds in tax on
this side of the Atlantic. The Inland Revenue, thanks to the pay department at work,
assume that I am on course to be in the usual tax bracket I've been in for nearly
fifteen years because I'm contributing as per normal. As it stands, I will have paid
more than expected because I would have earned less than expected at financial
year's end.
Does that equate to a tax refund at the end of the financial year (which will be
April 2002 here in the UK) or do the IR over here get to send on my details to the
IRS over there and I'll get bugger all back. Or do I get money back in Britain, only
to pay it to the IRS in the US because I have to disclose foreign earnings...?
I'd be rather pleased if someone now tells me I legally get a rebate without recourse
!!! I wasn't banking on it (pardon the pun), but it would be nice.
Shawn.
May 18th 2001, 4:29 pm
#2
BE Enthusiast
Joined: Mar 2001
Posts: 717
You'll get a tax refund from the Inland Revenue. You'll have to file a tax return to close off your affairs with them.
When you file taxes in the US, you'll have to declare your worldwide earnings for the year (assuming that you will file 'married filing jointly'). Don't panic though, as you will be able to exclude $74000 of foreign-earned income. If you have more than this, as well as capital gains, you can apply foreign tax credit. You may also be able to deduct mortgage interest on your UK house, if applicable.
The net result is that it is unlikely you will pay any US tax on your UK income, and if you have a house in the UK, the IRS will probably give you a tax break on this (crazy as it sounds), but this will depend on whether you, as a married couple, have a mortgage in the US too.
When you file taxes in the US, you'll have to declare your worldwide earnings for the year (assuming that you will file 'married filing jointly'). Don't panic though, as you will be able to exclude $74000 of foreign-earned income. If you have more than this, as well as capital gains, you can apply foreign tax credit. You may also be able to deduct mortgage interest on your UK house, if applicable.
The net result is that it is unlikely you will pay any US tax on your UK income, and if you have a house in the UK, the IRS will probably give you a tax break on this (crazy as it sounds), but this will depend on whether you, as a married couple, have a mortgage in the US too.
