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Where Taxpayers and Advisers Meet

Us resident, Uk resident, Us sourced income

aj123323
Posts:2
Joined:Tue Jul 06, 2021 3:05 am
Us resident, Uk resident, Us sourced income

Postby aj123323 » Tue Jul 06, 2021 3:19 am

Hi, I am a Dual US/Irish citizrn

In February of 2020 I moved to the US to begin working for a company out there. I began renting an apartment there which I still rent to this day (IE I have a permanent residence available to me in the US)

When covid hit, I was told I was able to work from home. Long story short in October I moved to the UK, working remotely for the same company and living with my partner who is studying here. We are interested in sticking around long term and my situation is currently that I am able to do this work long term.

I travel to the US frequently for work and spend a total of 30% of my year there, living in said apartment. My income is sourced in the US and is paid in dollars to a US bank account registered to my address there. The company has 0 links to the UK. My company automatically deduct my tax obligation from my salary every month and deal mainly with people working in the states. In 2020 I filed US federal tax returns and California state returns. My salary is $85k.

I am aware of a tax treaty however I am quite worried that I am doing something wrong here. Tax code is scary. What do I need to do in the UK to have peace of mind?

Any help would be greatly appreciated. Thanks!

aj123323
Posts:2
Joined:Tue Jul 06, 2021 3:05 am

Re: Us resident, Uk resident, Us sourced income

Postby aj123323 » Mon Jul 12, 2021 11:03 pm

Can anyone give me a recommendation of someone to get in touch with at least?

iwmtaxadvisor
Posts:45
Joined:Wed Sep 09, 2020 5:12 pm
Contact:

Re: Us resident, Uk resident, Us sourced income

Postby iwmtaxadvisor » Sat Jul 31, 2021 2:32 pm

Sorry to keep you waiting, spotted your enquiry only today.
I can provide a list of UK US tax specialists, you can private message me of look us up on Google.
A few guidelines
1. you have correctly identified that there is a potential UK tax liability, so well done on that
2. just because there is a liability does not mean that there is tax to pay. There are multiple considerations, some good, some bad as regards reducing global tax.
3. although there is a short term UK tax arrangement for individuals sent to the UK on secondment there is no such arrangement for a person who is simply living elsewhere. This is kind of new to HMRC so you'll need patience, and you'll want to have good relations with your company's HR team, since you'll need to be able to reassure them they don't have to comply with running a UK payroll service just for you.
4. ...and you'll have to be talking to the HR team about whether they should be making Social Security payments for you
5. the UK will want you to put in a return, telling them at what day you are claiming to be UK resident. The legislation on 'residency' changed recently: it has thought of most things but not your situation so, your US UK tax planner must go through the rules from scratch to avoid making you resident in the whole April to April tax year that you arrived and not just from the date of arrival.
6. most European private banks and brokers won't open accounts for you as you are a US citizen and the IRS demands returns in a certain way. So take care to retain the US broker you use if the broker can deal internationally. But, you'll probably find you have to tell them of your new status in due course.
7. the combination of US social security pensions and UK state pensions is worth almost 1m so find a way to maximise both but watch the WEP

actually, I could write a book. That's enough right? The main thing is that actually you're in a great position now to get some tax breaks few others can, and they are worth more than what it's going to cost you. Just a few people seem to do this self-directed but it takes them three to five years to get the hang of it all.

Rob NW
Robert Warren
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