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Split wages uk/us? Also lease car?

Split wages uk/us? Also lease car?

Old Jan 4th 2014, 5:49 pm
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Default Split wages uk/us? Also lease car?

Hi,

Firstly, loving this site, have learnt so much already, thanks everyone!

Right, i am heading out to LA next week for 6 weeks with the wife to see if we would like to relocate there for a couple of years.

My employer has offices here and in LA so we would be looking at an L1/L2 visa situation.

What i am trying to get my head around is what to do with wages, it has been suggested by a couple of people at work to get paid in both places. Which makes sense to me as it will help me keep my UK accounts active and ticking over whilst i'm away, plus it will help me pay for things in the UK without having to transfer money. But, will it cause me issues with Tax?? Also, given the same exact wages on either side of the pond, where would i end up paying less tax? Assuming an income of £100K?

Still lots to get my head around, but just wondering if people had an opinion?

I was also wondering what people normally do for a vehicle in these situations, given that it's only for 2 years i would be inclined to look at a lease. However as i have not credit history in the US i guess it would be tricky to get one. Similarly with buying i guess. I have looked at AutoSource, but that's for buying, is there a similar services for leasing?

Thanks!

Gareth
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Old Jan 4th 2014, 6:09 pm
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Default Re: Split wages uk/us? Also lease car?

Originally Posted by gazzer82 View Post
Hi,

Firstly, loving this site, have learnt so much already, thanks everyone!

Right, i am heading out to LA next week for 6 weeks with the wife to see if we would like to relocate there for a couple of years.

My employer has offices here and in LA so we would be looking at an L1/L2 visa situation.

What i am trying to get my head around is what to do with wages, it has been suggested by a couple of people at work to get paid in both places. Which makes sense to me as it will help me keep my UK accounts active and ticking over whilst i'm away, plus it will help me pay for things in the UK without having to transfer money. But, will it cause me issues with Tax?? Also, given the same exact wages on either side of the pond, where would i end up paying less tax? Assuming an income of £100K?

Still lots to get my head around, but just wondering if people had an opinion?

I was also wondering what people normally do for a vehicle in these situations, given that it's only for 2 years i would be inclined to look at a lease. However as i have not credit history in the US i guess it would be tricky to get one. Similarly with buying i guess. I have looked at AutoSource, but that's for buying, is there a similar services for leasing?

Thanks!

Gareth
It doesn't matter which account your salary is paid into. You will be a resident of the US and will have to pay US taxes on worldwide income. Your employer will also have to pay it's share of taxes to federal and state governments based on your salary. If the UK taxes you on unearned income for UK assets, those foreign tax credits can be used to offset US taxes owed on that income.

Last edited by Michael; Jan 4th 2014 at 6:15 pm.
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Old Jan 4th 2014, 9:00 pm
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Default Re: Split wages uk/us? Also lease car?

International Autosource lease vehicles as well as sell them.
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Old Jan 4th 2014, 11:15 pm
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Default Re: Split wages uk/us? Also lease car?

I was paid salary in the UK and the allowances in the USA. Unless you are going to be having major expenditure in the UK, I would suggest getting paid in the USA - otherwise you just have to move money over regularly. Of course, I guess this depends what the effective exchange rate they are offering you (i.e. you get paid x in the UK but we will pay you y in USA) is and whether you think you can do better by moving money yourself. Taxes are complicated to predict, as any taxes paid in the UK also get taken into account with your USA taxes, so it may be a wash. But it depends on what else you do with your money.

As far as cars go, it depends what you want. Any car you buy will likely have to be sold quickly so will go to Carmax or the like. You will do well to get Kelley Blue Book trade in value for it then. If a car is just to get you from A-Z then it will be cheaper to buy. If you like a newer car, then the depreciation in 2 years (less than the UK) coupled with the hit you will take on reselling to a dealer may make leasing less expensive.
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Old Jan 6th 2014, 11:26 am
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Default Re: Split wages uk/us? Also lease car?

If you are US resident you are going to pay US income taxes. The situation with payroll taxes is more complicated.
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Old Jan 6th 2014, 7:34 pm
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Default Re: Split wages uk/us? Also lease car?

I just wanted to add something else to the mix here concerning your income. As a general rule of thumb, I have learnt that a person in your situation should take your salary in sterling and double it. That should be what you are paid in dollars.

Don't whatever you do allow your salary to simply be converted to USD. The general cost of living is higher in America once you factor in healthcare, schooling, increased gas / petrol usage, AC, and so forth. Oh, and you'll have a massively reduction time off allowance and 'at will' employment. That is unless you can negotiate an 'expat' contract which keeps these in place.
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Old Jan 6th 2014, 7:43 pm
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Default Re: Split wages uk/us? Also lease car?

Hello all, thanks for all your input, i wasn't aware that IA did leases, that would make sense for me i think.

Salary wise, i think you're correct i should just get paid in the US and send money back to my UK account to cover costs over there as and when needed, i have looked at the costs and they do some very reasonable (free)!

Salary wise, i am technically stepping up a position so i will be asking for double, and some. For at least the first three months we are going to be short of my wife's salary, and after that she still may find it difficult to find work so i don't think it's unreasonable to factor that into my calculations also, what do you think?

Thanks

Gareth
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