designjohn

Hullo everyone. First post but an avid reader of the forum. Hoping someone will advise.

I’m a British citizen who has just been approved for a green card. I’ve been in the US since autumn 2016 without returning to the UK due to a very slow lawyer and the lengthy application process, which at one point while I was adjusting my status did not allow me to leave the US.

I am self-employed working from home for a British company that is based in the UK so all my income is earned in the UK and paid into my UK bank account. I have filed self-assessment tax returns with the UK for 10 years (the most recent one being in January 2018), which is what I believed I had to do seeing as I was working remotely in the US for a British company (which was based in the UK). For all intents and purposes I was still a UK resident (because my work visa was a non-immigrant visa, I was paid in the UK and worked only for a UK-based company). I’ve never been paid in the US by a US company.

I have been in the US a few times prior to autumn 2016, on my work visa, still working remotely for the British company:
- I was in the US for a year from 2015-2016, before going back to the UK for a few months.
- I was in the UK between 2012 and 2015.
- I was in the US from 2009-2012, returning to the UK for at least a month a couple of times a year.
- Prior to 2009 I was living in the UK full time.

My question is, as follows…
Now that I have the green card, I plan to work for a US company and start receiving an income in the US. I may have the odd, negligible, amount coming from the British company I work for as I tail off the work for them. But I want to become a full-time US worker now I have the green card. I also have rental income from a property in the UK (which I still have a mortgage on).

As I understand it, I will still file a UK tax return each year due to my rental income. But from now on I will also file a US tax return (starting from April 2019) because I plan to have 99.9% of my work income earned in the US with a US company.

- Do I have to file in the US retrospectively for previous years or do I just start now from the date I was approved for a green card?

- Do I inform the HMRC in the UK that I am now a non-resident? If so, would it be easier to fly back to the UK for a couple of weeks and then take my date of return to the US e.g. October 1 to be the date I officially left the UK to become a resident in the US?

Thank you in advance for your advice.

Cook_County

For 2016 you had US source income and may owe US Federal and State tax on that income. You may or may not have been a full year US resident. This needs analysis.

For 2017 your US tax returns are now late. You would be wise to file and pay as soon as possible. The FBAR filing date for 2017 is 15 October 2018, so this is not late at this date. I would think both under domestic and treaty rules you were non-UK resident from at least 1 January 2017, but quite possibly an earlier date. You have probably paid too much UK tax, but may be too late to reclaim all of this. Because of the rental income you'll need to continue filing in the UK as a non-UK resident. Hopefully you filed tax returns in the States for 2009 to 2012 and 2015 and 2016?

tom169

Note that even on a non-immigrant status you can still be deemed a resident for tax purposes. IRS and USCIS have two different definition for resident.

I would seek a competant CPA who has experience with international cases and then depending on how that goes potentially a tax attorney.

AdobePinon

designjohn

Thank you for responding, I appreciate your advice.

Let me clarify - even though I have been in the states on a work visa, I have never earned income from a US-based company. My income has always been from a British company, based in the UK, who I've worked for remotely.

I had a UK accountant up until last year who never said I would need to complete US tax returns. He wasn't a great accountant to be honest but I would have hoped he would have advised me better in this regard.

I've never filed any US tax forms as I was led to believe by my UK accountant that I continue to file UK tax returns (which I have always done). I thought because I was earning income solely from a UK source and never any from a US company and I was completing my tax returns in the UK that that was fine.

If it now turns out I needed to file tax returns in the US in the years I was here, will I get into trouble for this?

I genuinely did not know. I still had a UK address (and still do - the place I rent out) and believed I was paying all my taxes correctly in the UK on my solely-UK-based income.

Looking forward to your thoughts. Just ask if anything else isn't clear. Thank you!

Cook_County

Lawyers have legal privilege - you need a lawyer urgently from both a US tax and a US immigration perspective.

mikelincs

Your problrem comes from not understanding taxes in the US, once a resident you have to declare your total WORLD WIDE income to them, you should have been paying no UK tax and declaring to HMRC that you were resident in another country. You certainly need US tax professional to help you, one well versed in US UK tax requirements.

How did you get the visa if you haven't worked for a US company?, I would have thought that that was a requirement to getting a visa.

Cook_County

The issues could be more serious than personal tax. I would be concerned that you could be deported - or held by ICE while they investigate. Did your employers seek advice on their obligations? If so, did they share this with you?

PetrifiedExPat

Seek the advice of a tax attorney.

mrken30

I am confused, were you PAYE with the UK company? Why were you using a UK accountant if you were an employee? Were you contracting to the UK company?