newlifeinparadise

Quick finance/tax question... My husband has opened an account with HSBC US and just tried to add me. They want me to fill in a W-8BEN form (Cert of foreign status of beneficial owner for the US tax witholding) . We are still in the UK and have our UK address on the account. Then he will be on H1B and I'll be on a H4 in September when we arrive. Anyone have experience with this and know whether I should be filling this in?
He wasn't asked to complete one when he opened the account.

The instructions are long and confusing!

Help!

Steve_

Beneficial owner(s) are you and your husband. You are residents of the UK for the purposes of the tax treaties. You're not claiming any specific tax treaty provisions. Basically name, address, individual, answer 9a. If you have the bank account number, enter that under 8. I'm assuming you don't have an ITIN or SSN if you're H-4, foreign tax ID is pointless if you reside in the UK. (The purpose of the form is to exempt you from withholding on any income you get from the bank.)

That form is easy, the question is what will your tax status be when you arrive in the US?

I assume if he's H-1B then you will become tax residents of the US. At that point you need to go to the bank and file W-9. If you don't when you change your address to a US one the bank will fire off a letter asking why you are using W-8BEN when you reside in the US as they are required by law to ask.

Anyway, don't make the mistake a lot of people who post on here seem to make, i.e. you get to tax filing time next year, and then go out and buy TurboTax or whatever and do your tax return for this year and the IRS then pays a massive refund by mistake and you're sat there wondering why.

Partial years are done differently, there probably is software out there that can do it but I'm not aware of any. Also, most accountants aren't terribly familiar with them and H&R Block etc. very rarely are.

If you're moving to the US it's important to read IRS publication 519 and understand how the US tax system works.

Next year your husband should file a dual-status return for 2012 as he was only resident for tax purposes for x amount of time. Also if you leave the US, that year is also a dual-status year. Years inbetween will be regular tax years and then you can use TurboTax if you must.

A GOOD accountant can do dual-status returns if you have difficulty. http://www.irs.gov/pub/irs-pdf/p519.pdf

There is an example on pages 35-43.

newlifeinparadise

Thanks a lot :-)

nun

Do you have any investments, ISAs, pensions etc in the UK? When you become US resident the IRS will tax your worldwide income so it's important to arrange your non-US accounts appropriately. You might consider selling unit trusts and stock ISAs before you move to the US and understand how any UK pensions are covered by the treaty.