McBean

Phew! I've got a month until I'm moving permanently from the UK to the USA, and I have a bucketload of questions. My house here is in the process of being purchased, so if all goes according to plan I'll be handing the keys over on Oct 26th, and boarding a plane on the 27th.

Employment:
I currently work in the NHS and as there are severe cutbacks across the board I know my position will not be filled after I'm gone. I could see no way of handing in a months notice as I can't give up my job without knowing my situation in the States is definite ie the person is definitely going to buy my house, and I won't know that until the money's in the bank which is the day before I leave for good. It's complicated but the long and short of it is that I'll not be returning to work after I receive my October paycheck, and that's the first my employer will be aware of the situation. My questions are: Do I need a P45, and if so why? How do I get one if I'm no longer in the country?

Taxes:
Would I be due some sort of tax rebate because I'll only have worked 7 months out of the 12 in the tax year? If I am what do I have to do to get it, and if I do get it how would I receive it if I'm no longer here? Are there any taxes or charges or anything associated with the money I made from the sale of my house in the UK? I'm assuming there's nothing I need to fill out or anything with regard to taxes in general here, except for informing the Inland Revenue that I'm emigrating, as I'll have no ties, income or investments in the UK from that point on, except the one bank account that will now contain the house profits (for a short time).

National Insurance:
I must admit to being a bit miffed when I found out that if I leave the UK permanently I will no longer be entitled to NHS healthcare should the worst happen - even though I've paid many thousands into the kitty over the years, and am not intending to become a US citizen. Anyway, do I have to inform anyone with regards to National Insurance, or will my current employer sort that out? I don't have my National Insurance card anymore, but I know the number. What happens if I leave the country and don't inform the relevant department (who is the relevant department)?

Money:
The profit from the sale of the house should be going straight into my HSBC bank account here, and I intend to use that money to purchase a new house in the States. Can I just leave it in the UK account and pay for the new house in America from that account, or do I have to transfer the money from the UK account to my US HSBC account first? And if I do that will it be taxed? Is there a problem transferring that amount of money (about £70K)? I think I remember hearing something about anything over £10K being flagged or something, and I know you have to declare it if you're physically taking cash more than $10K into the States but what about just having it in a UK account and using it for a purchase abroad?

Sorry for the bombardment of questions, but if you're bamboozled just think how I feel! Thanks in advance to anyone who can help with any of these queries.

Cheers.

nun

You should inform your employer (NHS) and UK tax authorities of your new US address so they can send you any documents...like a P45. You should file a P85 with HMRC when you leave the UK. You will have to make sure you have no capital gains to pay on your UK house, but I assume you will get private residence relief on that.

I assume you have a US immigrant visa or are a US citizen and you will have to make sure you comply with IRS tax rules. So if you have UK accounts with more than $10k in them you will have to file FBAR. Also if you have any NHS pensions you will have to deal with them for US tax purposes, you should have already done this if you are a US citizen. Once in the US you should get a SS number if you don't already have one.

As far as NHS is concerned tax you've paid does not entitle you to treatment. It's solely dependent on residence in the UK......as you are moving to the US you no longer qualify for free at point of service NHS treatment. Your citizenship also has nothing to do with NHS eligibility.

I'm not sure of your current NI record, but if you want to keep paying the reduced rate voluntary Class 2 contributions you can until you have 30 years of contributions and you will qualify for full UK state pension.

Finally, do you have a job in the US and have you arranged for health insurance?

nun

I read one of your previous posts that says you are married to a US citizen and went to the US on a temporary I-551 recently. So this means the you are a US permanent resident. So you will have to deal with the sale of your house on your US taxes, also FBAR for your UK account will definitely be required. But if you planned to file "married" with your wife you would have had to deal with the sale of the house and the account anyway. Not a big issue, just a bit more paperwork on the US side than if you'd sold the house before becoming a US PR.

McBean

...FBAR for your UK account will definitely be required...

Gulp! What the hell's an FBAR? Is Uncle Sam going to take a chunk of my money?? Because I really need every penny (cent) of it to purchase the house we're looking at over there. I looked at capital gains tax, and from what I could tell it doesn't count if it's just the house you've been living in. I think that's right anyway...

So this means the you are a US permanent resident.

Yes. I assume when I leave next month I will no longer be a UK resident, but obviously at the moment I am.


I'm not sure of your current NI record, but if you want to keep paying the reduced rate voluntary Class 2 contributions you can until you have 30 years of contributions and you will qualify for full UK state pension.

I currently have paid in about 23 years NICs...it looks like voluntary Class 2 contributions cost £137.80 per year. Does this mean if I pay this amount each year for the next 7 years I'll be entitled to a full UK state pension? That doesn't sound right to me.

Finally, do you have a job in the US and have you arranged for health insurance?

I won't be working in the US (at least in the first instance) though I have a green card waiting for me over there, and I already have my social security card. My wife is there just now, and will be the sole wage earner for the immediate future. Her job comes with a benefits package the details of which I won't know anything about until I go over there next month.

nun

FBAR is just an informational form that you fill out to let the IRS know about your foreign accounts. If the house is your main residence you get a capital gains exemption from the IRS. If you are the sole owner and you sell it before you become a US permanent resident there will be no US tax consequences. However, if your US citizen wife co-owns the house and/or you sell it after you become a US PR you'll have to include the sale on your US taxes, but there's probably no US tax due.

Have you entered the US since your temporary I-551 was placed in your passport....If so the US will consider you as a US resident, this becomes important for taxes.[/quote]

It doesn't sound right, but it is!!! Class 2 contributions are ridiculously inexpensive for the benefits you get from them.

Please, Please find out about the benefits package your wife's employer offers. You want to make sure you will be accepted into a reasonable health plan. Being without health insurance in the US is dangerous......mostly to your wallet as you will be treated if you break a leg, but you'll pay for it. You should also get a certificate of coverage from the NHS. US insurance companies want to see proof of previous coverage.

McBean

Thank you very much for the advice. It's most informative. Much appreciated!

GeoffM

Beware that the NHS might try to claim something back from you if you "do a runner" without fulfilling your contract (ie one month notice). Given that you're not going to be working when you enter the US, why not hand in your notice now and even if the house sale doesn't go through, you head to the US anyway? I sold my house this year from the US - I had an offer a few days before I left, and it completed a couple of months later with all communication by email and a phone call or two to the solicitor. At least you won't be burning bridges if you give your employer fair warning. You might even be able to withdraw your notice before the notice period is up anyway.

Oh, and a P45 is no use to you in the US. I don't know if you need it for the P85 though.

yellowroom

But you will need it for your UK and US tax returns for 2012(-2013). Well, you don't HAVE to have it, but it makes it a lot easier filling in the forms.

Bob

Don't faff around, find out now.

Has she already had this job with benefits for long? Have you recently gotten married?

All makes a difference. If it's a new job, they may or may not extend the coverage to include you. If it's a old job and you've recently gotten married, they may be able to add you to the cover straight away as a major life changing event, other wise you might have to wait until the end enrolment period, which is often the beginning of the year but can be the anniversary of the start date.

This is something you don't want to be winging it on.

Bink

+1 on checking the enrollment date for the insurance. Ours is October 1st (I have no idea why but it's across a group of companies) which means all of our changes have to be in by next week.

Mummy in the foothills

It's open enrollment season for a lot of companies right now so make her get the insurance info so you don't miss it.

nun

Yes!!!!!! Don't leave the warm embrace of the NHS and chance things with the cold hearted US health insurance industry. Get all the facts and know that you will have insurance and what it will cover and cost before you get on that plane.

McBean

Okay, I'm still in the UK due to a change in the move in date re the house sale, but I'm moving to the States permanently this Saturday (1st December 2012). I've signed the dispositions on the house, the missives have been signed by both sides, I've handed in my notice, cancelled my superannuation membership with the NHS, received my final paycheck, sold my car, booked my flight and copied some Chas and Dave onto my ipod

I phoned the pay office at my work before I left and informed them of my US address and they said they would send my P45 there. I phoned HMRC a couple of weeks ago but it was kind of fruitless as they've got everything set up to be handled online these days it seems, and if you do manage to talk to someone they just refer you to the relevant web page at hmrc.gov.

Anyway, I came to the conclusion that I can't really do much with regards to my tax/pension situation right away. I can't fill in form P85 until I have my P45 which means I can't fill that in until I get to the States, then post it from there.

I'm looking at paying voluntary class 3 NICs for the next 8 years or so to get to my 30 year threshold. I can fill out form CF83 (Application to pay NICs abroad) and post it off tomorrow, but I intend to pay by annual payment which is paid in arrears, so it looks like I can do that once I get over to the States too...?

I'm still somewhat confused about the whole thing, but basically, would I be right in saying that I don't have to deal with any hmrc stuff (aside from posting the CF38) until I'm at my destination?

jackattack

Yes, Open Enrollment often comes towards the end of one calendar year and is then set up for the entire next calendar year.

Most companies though let you change some things if you have a 'life change event' which can count as (a) having a kid (b) getting married (c) adopting (d) spouse becomes either insured or uninsured, plus a bunch of other things which I can't remember but they are quite specific about what counts as a life change event.

Each of these events might allow you to change some or all of your options; it's also possible that they don't let you change anything but I think that's quite unusual. You typically CAN'T change anything during the year if you become sick and need to use the insurance (otherwise you'd just sign up for the cheapest plan and then switch to a better one when you need to use it) or if you change your mind on which type of plan you want.

A company will usually let a new employee (or one just moving to the US and therefore new to the US healthcare system) set up health benefits within a limited time from their arrival, often 30 days. They don't usually exclude you from benefits until the next open enrollment season.

Obviously, check the benefits situation with your wife's employer since they're all different (of course). The above is typical for a big, publicly traded company. And since I used to work for a major Silicon Valley company setting up a bunch of employee benefits where Open Enrollment season was ridiculously hectic, I'm thrilled instead to be at home looking after baby twins, even if one is sick.

nun

Why Class 3? Will you be retired or unemployed? You can pay the much less expensive Class 2 if you work for a US employer.

Please tell me your wife will be putting you on her medical insurance and you understand the cost of premium and the out of pocket costs.