NewlyAbroad

Hi all!

This forum has been a great resource for all my research so far but I wanted to pick the brains of anyone that has done the jump across the pond and check I haven't missed anything!

Context:

• Travelling with my partner. Myself on an E2 visa and them on an O1B.
• Renting out our house in the UK (to help supplement rent in LA)
• Aiming for the Highland Park, Glassall Park, Echo Park area!
• Currently have a Wise bank account with US routing details.
• I'll be working EST so initially coffee shops etc. for Wifi is a little out of the question for WFH.
• Will be bringing out our small dog in June (via Pet air)
• Combined income $~230k (still clarifying the details on this)
• Healthcare will be provided through my work (covering both of us)

Current action plan:

• We've booked Airbnb for 2 weeks whilst we search for a house (aiming for 2-3 bed) at $~3.5-4.5k
• Register for SSN day 1
• Book in California Driver's Test ASAP
• Switch over to AMEX using global transfer
• Aiming to lease a vehicle (is this a pipe dream with no credit score?) - have seen reference here that some brands offer the ability to use aspects of your UK finance history (my previous car was a lease with Hyundai if that helps) but can't find any specific details.
• Aiming to insurance via Geico/similar - any tips appreciated.
• Furniture will just be simple IKEA, FB marketplace whilst we find our feet
• Mobile plan through Mint mobile
• Internet (depending on location) with best most reliable provider.

Questions:

• So far I can see that everything is pretty reliant on SSN, is there anything we can do upfront to prep before needing to apply for the SSN?
• Will Wise suffice alongside my AMEX or should I look to setup a US based bank account?
• Is there anything that I haven't covered so far?

As someone who has been relatively blasé about the move it hit me that I might have done my last Sainsbury's shop last night and it's suddenly all becoming quite real!

Any help would be much appreciated.

christmasoompa

We leased a car through VW's Expat scheme with no credit history, arranged it all before we arrived and picked the car straight up (although we did already have our SSN's, so not sure if you can do that in advance if you don't). We just needed proof of my husband's employment and visa. Lots of other companies do similar.

The Amex transfer is incredibly useful, we did the same and both got credit cards with at least $15k limit on them, and our scores went from zero to over 700 within a week. And we use Mint mobile, again set it up far in advance of our move so we had US numbers before we arrived, it works really well. I'm back in the UK very regularly as I still have my businesses there, and it's easy to just switch between the two numbers.

Good luck.

porkedpie

Wise is great, but get a real bank account when you arrive.

SanDiegogirl

+ 1

PetrifiedExPat

Avoid Fashion District, Downtown, and anywhere near the basketball stadium/conference center. Human excrement and needles everywhere. It was gross

NewlyAbroad

First off, thank you so much for the response as it has helped settle some nerves and moved me more into the excited state of mind (rather than mass-panic!)

It seems that I can only get my SSN after I've entered on the visa so aiming to do that day 1 or 2. The vehicle news is super helpful and I've now got the right terminology and found similar programs with Kia, Hyundai, VW, etc. This is a big weight off my mind.

Great to know how smooth AMEX transfer is although I can't seem to find the gold card that I have in the UK on their US site and don't really want to stump up the $695 for platinum!

All good on mint mobile - that seems to be the easiest part of the process atm. Similarly I'll be back in the UK every other month so good to know I can have both lines working in tandem.

Sounds like a plan. Is there any specific reason? Assume all I need is SSN and proof of residence?

Yep that sounds like the sort of things to avoid, especially in the heat!

Glasgow Girl

Ensure you understand how foreign income (including rental income) and bank or investment accounts are taxed by both countries; and also the US requirement to report foreign accounts. It can be very costly if non compliant with those rules and even if you comply some UK investments are taxed very disadvantageously by the IRS. The UK will have first rights on the rental income but the IRS and California will also tax it although you will get credit for any taxes paid to the UK, so there may or may not be additional tax to pay depending upon how much profit you make under the IRS rules (which are more generous than the UK). Bottom line is understand the impact of foreign accounts and foreign income before you leave the UK, some action may be required before you enter the US to avoid serious taxation issues. If you are not aware of these issues then search this forum for some fairly recent threads providing a lot of detail in this area and come back with questions if applicable.

Also, consider making voluntary National Insurance Contributions while you are gone. Depending upon your age and how long you intend to be gone from the UK it may or may not be financially advantageous for you to do so. Plenty of information in recent threads on this.

Review your budget carefully. Living in LA on $230K is certainly possible but will require careful budgeting. Be realistic about your expenses, especially healthcare. Although covered by your company it is unusual for it be 100% covered and there are generally substantial payments required for treatment. Both medical and dental costs are significantly higher than the U.K., as is car insurance. Even groceries, phone and internet seem to cost a lot more.

S Folinsky

I have been long resident in Los Feliz. It looks like you are interested in the Highway 2 corridor. You might want to extend a little north up to Eagle Rock. Also look at Glendale, particularly Adams square. I think Atwater area is pretty neat (warning - Google search might refer to the town of Atwater, something entirely different). In your budget range, you have a lot of options.

Do note the housing stock will vary quite a bit in age.

I have abandoned my Amex account as being singularly useless.

Pierre_Tete

Or perhaps Pasadena or La Canada.

Have you done a reconnaissance visit here previously to scout those neighborhoods? Did you say you will be WFH? If there is chance you will need to commute you are probably aware traffic is horrible and many roads are poorly maintained, so shorter the commute the better, but quality of neighborhood is most important. I decided to live close to work and my commute is less than 3 miles and luckily the neighborhood is clean and safe.

Your price range is about right for a 2 bed. A 3 bed in a nice area will be at the upper end of your range. However, the issue is lack of supply. A little background.....I live in the general area you outlined but I am close to retirement and I only moved here (3 years ago) to be close to my daughter who's been here for several years. We moved here after 25 years on the East coast. Both my daughter, when she moved here, any myself more recently had a difficult time finding a satisfactory place to rent. You can look at apartments.com and think there's a lot of options, but when you visit in person we both found 90% of the places unacceptable for one reason or another - especially if you have pets (only about 30% of places accept dogs). We have certain expectations - it's all very personal and ymmv. I found most places the quality is poor relative to the high price - lots of older places built 1920-1950 originally without a/c and retrofitted with noisy window a/c units, single glazed windows (freezing or boiling as the sun moves across during day) and poor insulation and sometimes no parking or only street parking. There are newer modern apartments in downtown Glendale with underground parking but I thought it was too much concrete and not enough grass for walking my dog. Due to not finding anything acceptable at the time, I had to rent the 'cream of the crap' and I hated it. I broke the lease after 3 months and moved to somewhere much nicer but 40% higher rent than I was anticipating. I looked again at moving last year hoping supply had increased since Covid but it had not, so I'm stuck renewing my overpriced lease again (but it is a very nice modern condo). A few annoying things about renting in CA - most leases are 12 months (other states I have lived in typically have 6-7 month renewable leases but almost everything in LA is 12 months so if you don't like it you either suck it up or pay to break the lease or pay extra for a short lease, if available) and Cali law does not require the landlord to furnish a refrigerator. You might get one if you rent a high end place, or you might get lucky if the previous tenant left one behind.

My daughter is here and she's happy buy to tell the truth I just don't get LA. The cost/benefit ratio just doesn't add up for me. I will be moving again when I retire soon but I don't know how or if I will be able to be within reasonable distance of my daughter while also living somewhere I like better.

Are you or your partner cyclists? I'm often out and about riding the hills around Pasadena and Griffith Park. Probably the thing I like most about the area.

Good luck.

NewlyAbroad

Thank you all again for the insight, definitely invaluable and great to get lots of different POVs.

Thank you for flagging this. I've done some digging and seem to have deduced the following:

• As the rental income is low (£1.5k pcm) I will be taxed at a higher rate in the UK and this can be transferred as tax credits to the US resulting in no extra tax to be paid.
• I have around £130k in an S&S ISA and I'm not sure what to do about this - it seems a waste to lose 6.5 years worth of savings building if I just sell it all.

I'd love to get your understanding on the 230k being tight. From the calculations I've done (yes doubling groceries etc. 😉) it seems we'll be left with a little more than our current life in the UK. Phone and Internet seem comparable and I get that car insurance will be larger initially.

Thank you for your suggestions. We've gone in favor of spreading our wings a little to get a better place with less budget and commit to 2 cars so we have the flexibility to come and go as we choose (rather than 1 and walking distance to local amenities).

My partner has been here on and off for the last 10 years so definitely has a run of the land. We did a practice stint last year for 3 weeks to get a vibe for the area. Personally I've moved 5 miles from where I was born in the last 32 years so am keen to spread my wings a little and try something out. Technically I will be working on EST and jumping both to NY and LON rather than fully committing to LA.

As we've kept our house in the UK we're looking at this being a 2 year journey (mainly for my partners work).

I'm really glad you mentioned cycling - after my last bike was stolen in London I am looking forward to getting a new bike and enjoying not cycling in the rain for a bit!

postbox134

This is a huge red flag, you'll want to deal with this before you become US tax resident for sure. Search around here for PFIC rules and S&S ISAs.

christmasoompa

No idea on LA as I'm on the opposite coast, but you might want to triple your grocery bill - ours is three times what we paid in the UK. And yes to car insurance being higher, by a terrifying amount - although we do have a teenager so that may be why ours is sky high!

We're also on a 2 year assignment and are making the most of it, having a fixed end date does make sure you make the most of all the opportunities and exploring to be done. So I'm sure you'll have a blast. One other thing to mention, make sure your company will sponsor your green cards in case you do decide you want to stay longer - get that in writing before you leave.

Good luck.

Pierre_Tete

I see some folks have pointed out the potential cost of living issues in LA. $230k should be fine. My income is around that number but comes from salary, pension, dividends, capital gains and interest but mostly from salary (I am not taking withdrawals from my IRA at this time). Roughly speaking, here's how it breaks down for me:

Deductions from salary for all sources (maximum 401k savings, HSA account, taxes including taxes on my non-salary income, medical insurance) $80k
Rent (high end) $54k
Miscellaneous medical expenses (deductibles in a bad year, copays) $12k

Take home after tax, rent, medical = $84k

My wife and I can live comfortably on that. We spend about $300 a week on groceries and wine at Trader Joe's.

Glasgow Girl

On the budget being tight I would certainly defer to someone living out there so go with the numbers from Pierre Tate but also deduct car payments unless you are buying outright and the cost of your discretionary expenses which are on the higher end in California. It all depends upon your lifestyle and whether or not you are planning to save anything during these years. I have no argument that a couple can live reasonably well in LA on that amount, I just don’t think it will be a luxurious lifestyle and as stated previously you may have to compromise on the accommodation you select.

On the ISA if it is held in cash, bonds or individual shares then you have no concerns other than the fact that you will have to pay federal and state taxes on any income the ISA receives while you are over here since the US won’t recognize the tax free wrapper. If invested in any kind of mutual fund like an ETF, unit trust, OEIC, investment trust, etc then you want to sell those prior to arriving in the USA to avoid complex reporting requirements and punitive taxation rates. It is important to sell those type of investments before you leave the UK, the day you set foot in the US on your visa is too late. If you are only going to be here for a couple of years then I would sell and reinvest in whatever else your ISA offers that is not a mutual fund, cash if need be, to retain the tax free status when you return to the UK. The cost of reporting these investments plus the taxation will far outweigh any gains you would make in 2 years, and the cost of maintaining such investments becomes exponentially worse as time increases. The cost is mostly associated with completing the required Form 8621 which is very difficult to complete without professional help, and even then requires significant information to be supplied by the tax payer, very time consumming on both and professionals in this area are very expensive, it’s not something a regular CPA handles. Don’t underestimate this problem, many on this forum wish they had known about these issues before they arrived. Also with an investment with that balance you will have to file an annual FBAR, and Form 8938 with your taxes. Those forms are relatively easy to complete and not time consuming but the penalties for failing to do so (including Form 8621) can be considerable so not something to overlook.

On the rental income, the US will only tax the profit made after deducting the expenses and depreciation allowed under US laws. Because of depreciation which allows you to annually deduct 1/30 of an overseas property cost (minus land cost) from your income, plus mortgage interest and almost all other expense, there may be very little US tax to pay and so likely the UK tax bill be higher resulting in zero additional tax. If you end up staying here and sold your property then both US and UK capital gains taxes would apply, so something to keep at the back of your mind.

joto

We are out of LA, in the Inland Empire. One of the nicer bits admittedly. Rents aren't so high as in the city, and there are likely newer rentals. Plenty highways to get you into LA, although they are pretty busy most of the time, and there are trains fairly nearby, as well as a couple of smaller/medium sized airports, but you would need to go to LAX if you needed to get back to the UK. Plenty of cycle lanes next to our local roads, and walking trails if that is your thing.