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US/UK double taxation exemption help

US/UK double taxation exemption help

Old Jan 22nd 2015, 3:12 pm
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Default US/UK double taxation exemption help

Hi,

I am a UK/USA dual national. I have lived in the UK all my life until 1st Jan 2015 when I relocated to New York.I am working as a freelance contractor for a UK company, getting paid in GBP into a British bank account.

I want to make sure I only pay tax in the US as I am a resident here. I have been looking into the forms for double taxation exemption. From what I can tell I need to fill in a UK/USA Double Taxation convention form (SI 2002 number 2428) from HMRC and USA form 8802 from the IRS to prove my residency.

Has anyone else been through this process? Does what I've detailed above sound correct? Does anyone have any further advice or guidance about how I can make sure to just pay tax where I'm a resident (New York)?

Many thanks!
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Old Jan 22nd 2015, 3:25 pm
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Default Re: US/UK double taxation exemption help

Hi,

Make sure HMRC know you have moved to the US and are resident there.

The IRS will certify to HMRC that you are over here and you should then receive a letter from HMRC in due course acknowledging that.

I have found this man VERY helpful with my UK / USA tax issues. He's in NY, too, although I have done phone consults with him.

US - UK Tax Preparation and Advice | BritishExpatsTax.Com

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Old Jan 22nd 2015, 3:53 pm
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Default Re: US/UK double taxation exemption help

Thank you so much!
Yes, I need to fill in the form telling HMRC that I'm here but am waiting for my P45 from my old job so I can fill in those details.

Do you know how long the process should take? I.e. if I get started now should I be sorted by the time I need to pay my US tax in April?
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Old Jan 22nd 2015, 3:55 pm
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Default Re: US/UK double taxation exemption help

If you only started working this month - 2015 taxes won't be due until April 2016.

Taxes for 2014 will be due this April.
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Old Jan 22nd 2015, 4:00 pm
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Default Re: US/UK double taxation exemption help

But presumably I will owe some tax from Jan-Apr 2015? Or would that be paid in 2016?
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Old Jan 22nd 2015, 4:07 pm
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Default Re: US/UK double taxation exemption help

Yes, you'll pay tax generally in the next tax year. So like I'm due to pay 2014 tax by April 15 this year.

If you are self-employed ( like me ) just don't underpay by too much or there's a penalty.
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Old Jan 22nd 2015, 4:09 pm
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Default Re: US/UK double taxation exemption help

USA tax years run Jan 1st - Dec 31st

So any liability you may have from Jan 20115 onwards would be due in 2016, afaik.
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Old Jan 22nd 2015, 4:13 pm
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Default Re: US/UK double taxation exemption help

Take a butchers at this

Tax Years

I would have a quick consult with a tax pro just to make sure you start off on the right foot, especially since you're freelance.
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Old Jan 22nd 2015, 4:16 pm
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Default Re: US/UK double taxation exemption help

Wow - thank you so much everyone for your helpful comments!

I have an accountant who's been helping me do my US tax returns from the UK, but will also check out the British Expats tax website posted above.
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Old Jan 23rd 2015, 3:27 pm
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Default Re: US/UK double taxation exemption help

You should have filed a P85 when you left the UK so HMRC can get your taxes adjusted.

As a US/UK dual citizen I hope that you are up to date with your US taxes as you should have been filing while in the UK.

If you are doing your work in the US you should not be taxed in the UK or be liable to UK payroll taxes or VAT. You will need to file taxes in the US as a sole proprietor and pay US self employment taxes. Being paid into a UK account seems strange if you are living and working in the US.
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Old Jan 24th 2015, 9:14 pm
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Default Re: US/UK double taxation exemption help

You say you are freelance, but it sounds as if you might be employed; hopefully the engager of your services has taken advice on their own obligations.
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