mcf

Hi,
I've got dual nationality, born in San Fransisco with a British dad. I am currently resident in the UK and pay UK taxes, and I have only been to the US a few times and never more than a month at a time since my birth (was shipped out at the age of 2).

I know the US and UK have a tax treaty for dual taxation, but my question is am I liable for US income tax if I am no longer based in the UK (planning to move abroad)?

And how would it work, as I have no address in the US, and I'm not sure if I even have a EIN, I just have a US passport.

Jerseygirl

US citizens are required to fill out a US tax return every year declaring their worldwide income...no matter where they live.

ian-mstm

As a USC, you are required, by law, to file a tax return each year *and* to declare your worldwide income regardless of where in the world you live. Of course, due to the US/UK tax treaty, you are usually not double taxed... so, as for actually paying US tax, you are most likely fine. However, there is a set annual income limit ($85,000, I believe) above which you are taxed.


You might have a social security number. Unfortunately, you can't phone or write to find out... you'd have to appear in person at an SSA office.

Ian

chartreuse

Or send off a form to the Federal Benefits Unit at the US Embassy:
http://london.usembassy.gov/cons_new...q_fbu_ssn.html

penguinsix

As others have mentioned, all US citizens are required to report any income regardless of where they live. I think only the US and some country in Africa have this policy of taxing their citizens regardless of residency, and you wouldn't be the first to let this slip.

American citizens living overseas are given a tax credit of about $85,000 or so, which means if you make less than that you wouldn't have any tax owed as the first $85k is basically 'tax free'. After that, you get into some tax treaty areas where the tax you pay to the UK might negate any taxes owed to the US.

The US embassy in London has a tax section that helps expats who are a bit confused about their filings, and you might also find some help in the tax section of the US expats in the UK website, http://talk.uk-yankee.com/index.php?board=11.0 Some of them might be able to steer you in the right direction to clear up your back tax issues and get you moving forward properly in the future.

p.s. if you are a male, you also need to register for selective service when you turn 18, just in case the US military reinstates conscription they want to know where you are located. It's a simple form and after you file it you'll basically never hear from them again, but if you come to the US and apply for something like university scholarships or some other government assistance they will ask if you have registered for the draft.

Bob

and if he's a bloke, register for selective service.

Bink

I wasn't sure if I'd ever been issued with an SSN. I phoned the Federal Benefits Unit of the US embassy in London to see if they could shed any light on this and they checked the system and reported that I had never been issued a SSN. Worth giving them a call.

As a bit of background I'm a dual UK/USC. Was born in the US to British parents and moved to the UK at 6 months where I have been ever since. Recently obtained US PP as wasn't previously aware I was a USC and have been travelling to the US on a UK passport for years.

I am also in a similar situation regarding taxes etc and am in the process of trying to resolve these so will briefly highlight my experience in the hope that it may help:

On top of tax returns, as a USC you are also required to file a Report of Foreign Bank and Financial Accounts (FBAR). This is required if the total aggregate value of all your non-US accounts exceeds $10,000 at any point in any given year. I have recently openly approached the IRS about this and have filed for voluntary disclosure as I am deliquent on these returns having never been aware of this. My research has suggested that very few people are actually aware of this requirement!

I have only recently applied for a SSN for the first time and was told to wait for this before filing the last 5 years tax returns

avanutria

Yes, I only became aware of it when filing for the 2008 tax year. I did it for 2008 but have no idea when it was instated or whether I should do back filing for 2006 and 2007 (I've done federal returns every year)...or even how I'd find out how much I had overseas in those years! I get online statements which generally don't seem to stick around very long.

Bink

Yes, it's not an easy thing to check! You only have to file if the sum of all your accounts exceeds $10,000 which in my case for some years is straightforward (where this is already exceeded from a single account) and in other years is pretty difficult to determine (where no single account exceeds it but the accumulated value may).

I'm having to report the interest on these accounts and you can normally request certificates of interest from the bank for each account you hold, at least this is what I have done in the UK.

Also referring back to the OP - if you don't have an SSN, you will have to prove that you have been out of the country since a very young age. This is a right pain. I had to get copies of my medical records, school attendance, university attendance, letters from my employers and P60 tax records to cover the 27 years involved for me!

Jerseygirl

I usually find it difficult to obtain a certificate of interest from the UK because the UK tax year is April to April vs the US tax year with is Jan to Dec.

Giantaxe

It's 91.4k of earned income so any interest/capital gains isn't counted towards the earned income exclusion.

Michael

Besides the $91.5k income exclusion, there is also a housing exclusion and after that taxes paid in a foreign country can be used as a tax credit against US taxes.

http://taxes.about.com/od/taxhelp/a/ForeignIncome.htm