Tax benefit if employer rents home for L1 employee for 2 years
Nov 8th 2019, 9:17 pm
#16
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Re: Tax benefit if employer rents home for L1 employee for 2 years
One thing I will say, and I'm musing here, I work for a huge UK multinational, and the the one bit of advice I can give is don't assume your HR department know what it's doing. Mine outsourced everything, from visa's (treaty trader) to tax and benefits. Even then there were a lot of pitfalls.
Nov 8th 2019, 9:25 pm
#17
Concierge
Joined: Apr 2001
Posts: 46,386
Re: Tax benefit if employer rents home for L1 employee for 2 years
For me it was a managing agent. If your rent is always on time, they don't report that but they did if it were late or missed.
Nov 8th 2019, 9:30 pm
#18
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Re: Tax benefit if employer rents home for L1 employee for 2 years
One thing I will say, and I'm musing here, I work for a huge UK multinational, and the the one bit of advice I can give is don't assume your HR department know what it's doing. Mine outsourced everything, from visa's (treaty trader) to tax and benefits. Even then there were a lot of pitfalls.
Nov 8th 2019, 9:35 pm
#19
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Re: Tax benefit if employer rents home for L1 employee for 2 years
Seems slightly unfair.....
Nov 8th 2019, 10:06 pm
#20
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Re: Tax benefit if employer rents home for L1 employee for 2 years
Another thing, get your company to agree to per diem's, your UK company will not know what these are, but if you travel a lot, in the US they are gold :-)
Nov 11th 2019, 4:59 pm
#21
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Re: Tax benefit if employer rents home for L1 employee for 2 years
It was ok in the end, thanks to some overnight FedExing and lawyer overtime, but it was extremely stressful at the time. US HR just shrugged. It was bloody ridiculous - it was the same lawyer both times, who was very nice and remembered me from the original application.
Nov 11th 2019, 7:16 pm
#22
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Re: Tax benefit if employer rents home for L1 employee for 2 years
Nov 11th 2019, 7:19 pm
#23
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Re: Tax benefit if employer rents home for L1 employee for 2 years
Another vote for check then check again anything your HR tell you, particularly if it's coming from the US office. US Citizens ordinarily do not have to know anything about US immigration laws, and boy does it show. My horror story involves a particularly unhelpful HR person around my visa renewal. I had liaised directly with the company lawyer to get my original visa (L-1) from the UK office with UK HR, but on renewal I had a different (US) HR person who was very unhappy about me talking to the lawyers and insisted on inserting themselves into the conversation. The result was they handed me my paperwork the hour before I left for the airport for my flight back to the UK for the visa appointment, chock full of errors that would have been very difficult to explain at the embassy. For starters, they put the wrong job title, grade and job description into the application!
It was ok in the end, thanks to some overnight FedExing and lawyer overtime, but it was extremely stressful at the time. US HR just shrugged. It was bloody ridiculous - it was the same lawyer both times, who was very nice and remembered me from the original application.
It was ok in the end, thanks to some overnight FedExing and lawyer overtime, but it was extremely stressful at the time. US HR just shrugged. It was bloody ridiculous - it was the same lawyer both times, who was very nice and remembered me from the original application.
Thanks for your input Yellowroom,
Mic
Nov 13th 2019, 9:49 am
#24
DE-UK-NZ-IE-US... the TYP
Joined: Mar 2010
Posts: 2,855
Re: Tax benefit if employer rents home for L1 employee for 2 years
Hi, thanks everyone for the feedback.
I understand now that renting doesn't help as far as building credit but does correspondence from a landlord stating that payment frequency and due dates were all met and bank statements from me backing up the fact carry any weight when approaching a mortgage lender? As you all mentioned, i could reach out to credit card companies and buy a few pieces of furniture on credit plus we did look at buying a reasonable car for my wife outright (something around $25k) but could maybe do a half down instead.
I'm having trouble understanding though how this huge benefit in kind wouldn't greatly impact the tax i pay to the point that there is little or no saving. This potentially is little more than creative tax avoidance, if it was that easy, surely every employer who relocates an employee would be doing this initially? Doing the sums, they are working on the basis that it would allow them to reduce my salary (pre bonus) from around $140k to $85k without making a difference to my net take home. My ideal is to be left at the higher salary and keep it clean but i understand where they are coming from as every saving during our 'set up' years is welcome.
Thanks
I understand now that renting doesn't help as far as building credit but does correspondence from a landlord stating that payment frequency and due dates were all met and bank statements from me backing up the fact carry any weight when approaching a mortgage lender? As you all mentioned, i could reach out to credit card companies and buy a few pieces of furniture on credit plus we did look at buying a reasonable car for my wife outright (something around $25k) but could maybe do a half down instead.
I'm having trouble understanding though how this huge benefit in kind wouldn't greatly impact the tax i pay to the point that there is little or no saving. This potentially is little more than creative tax avoidance, if it was that easy, surely every employer who relocates an employee would be doing this initially? Doing the sums, they are working on the basis that it would allow them to reduce my salary (pre bonus) from around $140k to $85k without making a difference to my net take home. My ideal is to be left at the higher salary and keep it clean but i understand where they are coming from as every saving during our 'set up' years is welcome.
Thanks
Sounds like they are trying to game the system, my prediction is YOU will end up footing the bill. Some things are better paid pre tax (because they qualify) and are a business expense, e.g. your healthcare... but as you note if paying your rent was, everyone would be doing it...
Your logic on the rental payments also contradict themselves.. I recall seeing that some platforms do allow for voluntary reporting to credit agencies. However I would think your employer paying your rent would send the opposite signal, i.e. that have not / can’t afford to pay your own rent. Also remember that part of a mortgage application asks for income history and your potential loan approval would be based on the lower salary... because they ask for W2’s
rental reporting... I think it’s a scam to sell an extra service and the risk ( a landlord giving you a black mark) probably out weight any extra benefit you may gain: https://www.transunion.com/product/r...xoC2igQAvD_BwE
Last edited by tht; Nov 13th 2019 at 9:55 am.
Nov 13th 2019, 9:58 am
#25
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Re: Tax benefit if employer rents home for L1 employee for 2 years
So they are trying to avoid payroll taxes (SS and FICA).... ?
Sounds like they are trying to game the system, my prediction is YOU will end up footing the bill. Some things are better paid pre tax (because they qualify) and are a business expense, e.g. your healthcare... but as you note if paying your rent was, everyone would be doing it...
Your logic on the rental payments also contradict themselves.. I recall seeing that some platforms do allow for voluntary reporting to credit agencies. However I would think your employer paying your rent would send the opposite signal, i.e. that have not / can’t afford to pay your own rent. Also remember that part of a mortgage application asks for income history and your potential loan approval would be based on the lower salary... because they ask for W2’s
And again, i agree with your second paragraph, it just sends the wrong signals and even though they would dramatically bump up my salary for mortgage purposes (once the time comes) it would still raise more than a few questions.
Nov 13th 2019, 11:38 am
#26
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Re: Tax benefit if employer rents home for L1 employee for 2 years
So they are trying to avoid payroll taxes (SS and FICA).... ?
Sounds like they are trying to game the system, my prediction is YOU will end up footing the bill. Some things are better paid pre tax (because they qualify) and are a business expense, e.g. your healthcare... but as you note if paying your rent was, everyone would be doing it...
Sounds like they are trying to game the system, my prediction is YOU will end up footing the bill. Some things are better paid pre tax (because they qualify) and are a business expense, e.g. your healthcare... but as you note if paying your rent was, everyone would be doing it...
I agree
