What tax advice would you give someone just starting out...
 

...on the road to **possibly** making a permanent move from the UK to the US? As the US citizen in the family (my husband is French, we're both currently UK residents and going through DCF) and as someone who's not terribly financially savvy, I've been surprised by a lot of the very complicated and burdensome tax law that the US imposes on its overseas citizens and green card holders. I keep coming across stories of people who had no idea they should have been filing FBARs, or that they'd be liable for US tax on the sale of a foreign home, etc. and end up getting, well, screwed.
If we do end up going through with this, how can we best set the whole thing up for success? Or put another way, what are the mistakes we could learn from :unsure:?

Re: What tax advice would you give someone just starting out...
 

Find a good tax advisor.
That's what I'm going to do, at least for the first year, when I move back to the UK.
However from the advisors I've already spoken with, many of them haven't been clear themselves on the various rules.

Re: What tax advice would you give someone just starting out...
 

It depends how complex your financial affairs are and what investments you have. If you have stock market investments and pooled investments such as OEICs and unit trusts, it might make sense to sell them ahead of your move to the US, so long as it doesn't create an immediate liability to UK tax, but you should certainly plan to liquidate and tax-advantaged investment plan that is NOT a pension plan, as the tax advantage will not be recognized by the US tax authorities. If you don't plan to return to the UK, it will likely make sense to sell your house, in practice you have several years to sell without creating a capital gains tax liability, but choosing and hiring an estate agent is much easier while you are still living locally.

Re: What tax advice would you give someone just starting out...
 

Honestly, get a professional tax person who is well-versed in cross-country tax issues. Not just some guy you're family has been using for decades or a friend of a friend, but an expat-savy professional who can handle the complexities of FBAR and FATCA but also things like Form 5741 for ownership of foreign companies and also capital gains complexities.

It's really not a DIY project unless you've had some experience doing these things and are a bit savvy about the nuances of the laws. Take a look at http://talk.uk-yankee.com (US expats living in the UK) and they have a section on how to deal with taxes and some recommendations for people with experience in this area.

Re: What tax advice would you give someone just starting out...
 

I am not going to dispute that advice, it is the safest advice to give, but I am curious, how many people (percentage of) who immigrate to the US for personal or family reasons, as opposed a corporate sponsored move, do you think actually get professional tax advice? :confused: ...... My guess would be very few, .... less than 10%.

.... And clearly many of the posters here, from what they say, or reading between the lines, are NOT sitting on a hefty stock portfolio, nor are they the beneficiary of a trust fund. The tax implications of immigrating are, for most people of modest means, the matter of selling their house soon enough to avoid CGT, declaring any bank, brokerage, and pension accounts they have, and if they liquidate them and transfer them to the US at or around the time they immigrate, most of the possible tax issues go away anyway.

Re: What tax advice would you give someone just starting out...
 

I know there are some good accountants out there but honestly a lot of the "professional" advice is s---, two of my relatives have had really bad advice from "professionals" and ended up with problems with the IRS. I've looked at some websites of professionals and they have various mistakes on them.

Yes there are all sorts of requirements for non-resident US citizens but the basics of it are pretty simple, you file largely the same stuff as you would if you lived in the US, but in addition you file Form 2555 if you are employed abroad. What makes it more complicated usually is that you are more likely to have a foreign pension or foreign investments so you end up having to file forms like Form 3520 or 8621.

There is more to it than that but really start by reading IRS publication 54 and go from there. Your husband being an alien should read publication 519, particularly the bit about dual-status returns.

It's better to be in a position where you know 80% of it, then phone up the IRS to fill in the blanks and then double-check all of that info with a professional than depend on professional advice alone.

It's a lot easier to ask for help filling say, form 3520 than hope the accountant figures out you need to fill it in.