michen

I have a couple of questions, I had set up an appointment with an advisor but they kept rescheduling so looking for another one.

I am about to receive the rest of my company shares (and have lived in the USA since October). Am I right that I’ll need to declare them on my USA tax return and pay tax on them? Will this then mean I don’t have to pay uk tax on them when I submit next year?

if I move some of the money- say 30k- over for a car purchase, do I need to declare this somewhere and will this cause any more implications tax wise?

Thank you in advance!!

morpeth

As far as company shares depends how they were granted , what type, and other factors- definitively a matter to speak with a CPA, and especially if the shares were from a private company or bear restrictions, or are listed on the OTC.

michen

They were “sweet” shares. And accessible after the company completed on a transaction, happily just before I needed to hand my notice in.

I have no idea really what they are other than that! As a leaver, I had no choice but to be cashed out.

morpeth

Well , was the company public or private ? Was it compensation or for consulting ? Have the shares been sold ? Do the shares have any restriction on when they can be sold ? When did you physically receive the shares or into a brokerage account ? Did the company issue a W2 or 1099 form on the value of the shares ? All factors a CPA would consider. an render an opinion in less than an hour, probably less than 15 minutes.

tht

First time I had heard the term Sweet shares. But it seems to be a term:

”

What does Sweet equity mean?

This refers to the managers’/management’s holding of ordinary share capital in a company. The expression is used and the scenario is often found in situations where a company is subject to private equity investment pursuant to a management buyout. Its name reflects the fact that the shares allocated to management are meant to act as an incentive to them, are often subscribed for at a lower price than the private equity fund investor’s shares, ie with a higher upside and are normally designed to divert more of the total equity proceeds on exit to management.”

https://www.lexisnexis.co.uk/legal/g...y/sweet-equity

OP you will need all the details to get any good advise.

Often with private companies share and options are sold and a portion is use to pay tax’s.

Moving your own money here in itself is not taxable, if it was paid in the UK, assuming it’s also a UK company you had shares in it’s likely subject to UK tax. And then depending on the timing it may be subject to US, but with credit for UK tax’s paid (note that only applies to federal, not city or state, where more tax could be owed).

Depending upon on the timing you may also need to include on your 2022 FBAR if you moved last year…

michen

oh no that sounds complicated. I received one lump in oct 2022 weeks before I moved. So that could be taxed too? I guess I’ll get it back. I don’t even know what an FBAR is, off to google 🤣

tht

If it was paid before you became US tax resident I think you should be OK there. But make sure to research FBAR requirements regardless.

durham_lad

No tax implications on either side of the pond. You may be prompted by whichever company you use to do the transfer to state where the money has come from, but this is just part of the money laundering checks. Well worth informing your US bank that a large incoming sum of money is headed to your account.

michen

Thanks everyone. Am I correct in understanding I do not need to file a tax return in April, as I moved here mid October 2022 and was therefore under the number of days required to be considered a resident alien for the 2022 tax year?

in which case my first usa tax return filing would be 2024 for the 2023 tax year, and I’ll have already paid my capital gains tax to the uk by then.

tht

did you receive any US income in 2022? If you did you will get a W2,1099 etc and will likely need to file a return anyway to cove those months.