US taxation on UK payments
 

Hi all,

I was curious if anyone had any experiences with the tax situation described below, and had any general advice/input:

- I receive regular annual payouts as part of a company sale deal that happened several years back. They're staged payments for various reasons, but I have already paid all the UK tax on these payments back when the original deal was done, so the payments do not incur tax in the UK annually
- These payments are made to a UK bank account, and when I move to the US, I do not intend to transfer or use those funds in the US. They will simply remain in UK accounts, etc, until/if I return

Would the US try and tax these payments? My impression is, if they did, I would struggle to claim back UK tax credits, as there has been no double taxation in the tax year being reported (as all the UK tax was paid in one lump sum several years ago). And I guess more in general, if I do receive arbitrary payments from businesses or individuals in the UK, and the money remains in the UK, what is the IRS view on these payments?

Thanks as always for your insights.

Re: US taxation on UK payments
 

What kind of US visa will you have? Will you be a US resident? You might want to read up if it is relevant on instalment sales; the law is quite different in the US than the UK.

Re: US taxation on UK payments
 

I'll be on an L1 visa, and I will be resident in CA, yes.

I checked out the instalment sales bit on the IRS website the other week. They actually have a very similar provision whereby you can pay the tax upfront on the sale, and future taxes would only be realised on incremental profits/income, such as interest on the payments, which would not apply in the case, as there will be no incremental income.

Re: US taxation on UK payments
 

You almost certainly need legal advice within California as California law is unlikely to conform to Federal law.