A taxing question - ISAs
Mar 15th 2004, 1:00 pm
#1
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A taxing question - ISAs
Been in the US 14 months and only just discovered this forum. Nice to know you're all there.
I've been trying to fill out my US tax return for the first time and would appreciate advice from anyone who knows how to treat taxable and non-taxable foreign interest income. I have UK savings accounts of both ISA (tax free) and non-ISA type (tax deducted at source). On the US tax credit form under "foreign tax paid" I have only one line to list "gross income" and "tax paid". It seems odd to lump them all together, or should I exclude the tax-free savings from the "gross income" line since the question is only about tax paid?
And then, since the total UK tax is all less than my UK personal allowance, I can claim it all back from the UK right? Or is that claiming a credit twice?
Yours in confusion
Gillian
I've been trying to fill out my US tax return for the first time and would appreciate advice from anyone who knows how to treat taxable and non-taxable foreign interest income. I have UK savings accounts of both ISA (tax free) and non-ISA type (tax deducted at source). On the US tax credit form under "foreign tax paid" I have only one line to list "gross income" and "tax paid". It seems odd to lump them all together, or should I exclude the tax-free savings from the "gross income" line since the question is only about tax paid?
And then, since the total UK tax is all less than my UK personal allowance, I can claim it all back from the UK right? Or is that claiming a credit twice?
Yours in confusion
Gillian
Mar 15th 2004, 1:12 pm
#2
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Joined: Jun 2002
Location: Virginia
Posts: 1,421
Re: A taxing question - ISAs
Originally posted by gillian77
Been in the US 14 months and only just discovered this forum. Nice to know you're all there.
I've been trying to fill out my US tax return for the first time and would appreciate advice from anyone who knows how to treat taxable and non-taxable foreign interest income. I have UK savings accounts of both ISA (tax free) and non-ISA type (tax deducted at source). On the US tax credit form under "foreign tax paid" I have only one line to list "gross income" and "tax paid". It seems odd to lump them all together, or should I exclude the tax-free savings from the "gross income" line since the question is only about tax paid?
And then, since the total UK tax is all less than my UK personal allowance, I can claim it all back from the UK right? Or is that claiming a credit twice?
Yours in confusion
Gillian
Been in the US 14 months and only just discovered this forum. Nice to know you're all there.
I've been trying to fill out my US tax return for the first time and would appreciate advice from anyone who knows how to treat taxable and non-taxable foreign interest income. I have UK savings accounts of both ISA (tax free) and non-ISA type (tax deducted at source). On the US tax credit form under "foreign tax paid" I have only one line to list "gross income" and "tax paid". It seems odd to lump them all together, or should I exclude the tax-free savings from the "gross income" line since the question is only about tax paid?
And then, since the total UK tax is all less than my UK personal allowance, I can claim it all back from the UK right? Or is that claiming a credit twice?
Yours in confusion
Gillian
They are all over the place, and compared to the UK, I've found they are really cheap.
You could try someone like H&R Block who I think are Nationwide
Mar 17th 2004, 1:21 pm
#3
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Re: A taxing question - ISAs
Originally posted by rogerpenycate
It may be worth getting a tax accountant, so you don't mess up.
They are all over the place, and compared to the UK, I've found they are really cheap.
You could try someone like H&R Block who I think are Nationwide
It may be worth getting a tax accountant, so you don't mess up.
They are all over the place, and compared to the UK, I've found they are really cheap.
You could try someone like H&R Block who I think are Nationwide
I should say I'm not a war profiteer, oil company executive or Wall St banker, and have fairly simple finances - never used an accountant before but am just confused by the double taxation thing. I just wondered how other people found the 1040 form.
Looking at the Inland Revenue site it seems I can just claim all this under my UK personal allowance anyway, and not list it on the US tax return at all?
Mar 17th 2004, 4:26 pm
#4
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Posts: 2
I am at the start of this process so please bear that in mind.
US/UK have a double taxation treaty, I think you have to earn something over US$80k before you need to worry too much about one country wanting additional share of money earned elsewhere. So I am taking the view that fo if you have this sort of dosh then you can afford an accountant.
Inland Revenue has a series of booklets on their web site. They are quite helpful and I have been told their help lines are good as well.
I will have a little interest, small dividends and have let my flat out. I am hoping that the personal allowance etc will keep my net UK tax to a minimum.
I have no US income yet, I guess we will be joint filing.
The US I understand requires you to disclose your worldwide income, ex I think that covered by Double Taxation. It does not I belive recognise UK Tax shelters like ISA's. Having said that ISA's have lost most of their tax benefits. I would have thought that the double taxation includes personal allowances.
I need to sell some shares to fund a house over here, we have a CGT allowance, as far as I can see there is a no CGT allowance in the US.
So technically do I need to declare my Capital Gains on my UK shares to the US authorities?. Actually they have gone down a bit since I have been here so could I deem them a loss?.
I have decided to ignore it all, after all how would the IRS know what I have in the UK and how would the Inland Revenue know what I have in the US?.
US/UK have a double taxation treaty, I think you have to earn something over US$80k before you need to worry too much about one country wanting additional share of money earned elsewhere. So I am taking the view that fo if you have this sort of dosh then you can afford an accountant.
Inland Revenue has a series of booklets on their web site. They are quite helpful and I have been told their help lines are good as well.
I will have a little interest, small dividends and have let my flat out. I am hoping that the personal allowance etc will keep my net UK tax to a minimum.
I have no US income yet, I guess we will be joint filing.
The US I understand requires you to disclose your worldwide income, ex I think that covered by Double Taxation. It does not I belive recognise UK Tax shelters like ISA's. Having said that ISA's have lost most of their tax benefits. I would have thought that the double taxation includes personal allowances.
I need to sell some shares to fund a house over here, we have a CGT allowance, as far as I can see there is a no CGT allowance in the US.
So technically do I need to declare my Capital Gains on my UK shares to the US authorities?. Actually they have gone down a bit since I have been here so could I deem them a loss?.
I have decided to ignore it all, after all how would the IRS know what I have in the UK and how would the Inland Revenue know what I have in the US?.
Mar 17th 2004, 4:52 pm
#5
Joined: Aug 2002
Posts: 4,082
Re: A taxing question - ISAs
Originally posted by gillian77
Been in the US 14 months and only just discovered this forum. Nice to know you're all there.
Yours in confusion
Gillian
Been in the US 14 months and only just discovered this forum. Nice to know you're all there.
Yours in confusion
Gillian
I'm not far from you... up here in snowy one day and 60 degree's the next Connecitcut.
Mar 18th 2004, 9:05 pm
#6
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I just had an email from a nice young man at the Inland Revenue (UK), who addressed me as Madam.
His answer is that the "Double Taxation Agreement provides exemption from UK tax so the IRS will not give a credit [i.e. we shouldn't declare it on the foreign tax credit form]. You must obtain a refund of UK tax by either US/Individual or R43 forms."
These forms are on the Inland Revenue website and are pretty straightforward. Life suddenly becomes a lot easier for me - hope this helps someone else too.
Gillian
His answer is that the "Double Taxation Agreement provides exemption from UK tax so the IRS will not give a credit [i.e. we shouldn't declare it on the foreign tax credit form]. You must obtain a refund of UK tax by either US/Individual or R43 forms."
These forms are on the Inland Revenue website and are pretty straightforward. Life suddenly becomes a lot easier for me - hope this helps someone else too.
Gillian
