Twinklekk

Hi

My family are moving to FL in April on 5 year visa which my company are providing for me. we are renting out our Scottish home and planning to rent in FL until we feel ready to sell home and buy in FL and also once husband has got employment. I will be on u.s payroll as this is all very new to me, is there things I should look into from tax perspective?

Thanks.

Jscl

Kind of a wide subject but the general stuff is:

You'll have to pay income tax on your worldwide income, which includes things such as your rental income from your house in Scotland. You should get some sort of credit on your US taxes for taxes paid back home.

Florida has no state income tax, so you'd only be subject to federal income tax, and the tiered rates can be found here:
http://www.moneychimp.com/features/tax_brackets.htm

Generally income taxes are a lot less here than in the UK.

There will be no property taxes if you're renting here, so you'll just pay rent and utilities.

airways

We are just about to move to FL as well. Where are you going?

Bob

You want to look into capital gains if you don't sell within x number of years, can't remember what it is before things can get expensive.

There are some threads on house selling though that you could probably search out.

Twinklekk

Thx v much:-)

We are moving to the st Petersburg area.

im9907620

In no particular order:
ISAs are not tax free in the US, especially if you have the stocks and shares type.
Certain UK Self Invested Pension plans MIGHT be taxable.
You would almost certainly be able to sell your UK property as 'your main UK home' during the next 3 tax years without US tax.

As always, these things will depend on your individual circumstances.

airways

How would you pay tax on the ISA? Would it be at the point of cashing?

I have a large ISA that I have been saving the max into for a decade and have no intention of cashing it in, especially as I will eventually return to the UK.

Awesome Welles

What's a "5 year visa"?

Cape Blue

P85 form for moving abroad
NRL1 form for being an overseas landlord (for your let UK property)

In the UK you will pay tax on the profit from your UK letting - this is the gross rent minus mortgage interest, agents fees, insurance, wear & tear etc - you retain your personal allowances so if the profit is less than the circa GBP7K allowance (or double if owned in both names) you will pay no tax - but you still need to complete the self-assessment tax forms each year.

In the US you will pay tax on worldwide income - this will include the profit from renting out your UK property and you will have used-up your US personal allowance with your US income, so your UK profit will be taxed at your US marginal tax rate (as it is added to your US income). The US does permit a depreciation allowance which helps reduce this.

This thread and the ones linked in post # 2 on it should give you some info on your capital gains risk.
http://britishexpats.com/forum/showt...70#post9085170

I don't find taxes any lower than the UK - but I live in California

im9907620

If you satisfy US tax resident criteria then your ISA will be taxable on the earnings (i.e. income and growth). There is no 'upward cost-basing' on entry to the US tax system so gains from acquisition become potentially liable to US taxes. If your preference is to hold them then it might be better to hold pure shares rather than unit trusts or similar. The dividend income is covered by the treaty (15%) so you can't be taxed twice and any surrenders would be at US capital gains rates rather than income rates.

If you have/retain unit trust type ISA's then you/investors should not look to surrender any whilst in the US as this will be charged at the highest US marginal tax rate since purchase irrespective of the individual's rate or former residence.

There are one or two other things that can be done/looked at depending how long someone is in the US tax system for, but careful planning is essential.

With the new US H.I.R.E Act coming in then your ISA provider will have to report the balance of your ISA account to the IRS and you are also liable to report it via the FBAR declaration annually (assuming your all your foreign/UK accounts exceed the $50K threshold). If you intend to keep a UK address for your ISAs and not tell the ISA firm about US tax residency then that is a risk that you or other investors will have to bear....

As ever, take advice before you get in the US tax system.....

for general information only and not to be taken or construed as personal advice