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Where Taxpayers and Advisers Meet

Moving to the USA

richyje
Posts:1
Joined:Sun Jan 27, 2019 11:52 pm
Moving to the USA

Postby richyje » Mon Jan 28, 2019 12:07 am

Hi,

First time posting on this forum, and wish to say thank you to anyone who can offer advise to our position.

Myself, wife and 3 kids are contemplating moving to start a new life in the USA. We are investigating visa'a at present and think we may start a business utilising Inheritance my mother left me when she passed. The inheritance was way below the IHT threshold so no tax to pay.

We have a house in the UK which we plan to keep, but let. We have 2 ways to do this 1) Through Airbnb, Homeaway etc that could deliver higher returns and 2) Through a regular estate agent, who has advised the house should net approx £2300 per calendar month - the rental income from this house is to be used to pay for a rental in the USA.

I am not sure if myself and/or my wife would still avail of our personal allowance (£23,700 between us both). Our property could net in £27,600 per year, so would we just be liable for 20% tax on £3900 ?

Thanks,

Richard

AGoodman
Posts:1738
Joined:Fri May 16, 2014 3:47 pm

Re: Moving to the USA

Postby AGoodman » Mon Jan 28, 2019 3:51 pm

Yes, you should be able to use your personal allowances but don't forget you will also be liable for US income taxes on the full amount.

You should be able to obtain tax credit in the US to set your remaining UK liability against the US liability but it is not straightforward, not least because the two tax years are different. You may need an accountant over there to help you (there are US/UK specialists here but they will of course be geographically distant).

You will also need to register for the non-residents landlord scheme to avoid deduction of 20% UK withholding tax (which can be reclaimed but best avoided). I don't know if the agent can help you with this.

DavidTreitel
Posts:271
Joined:Thu Aug 16, 2012 4:31 pm

Re: Moving to the USA

Postby DavidTreitel » Mon Jan 28, 2019 8:00 pm

When you succeed in moving to the States you will be a resident and subject to US Federal and possibly State tax on worldwide income & gains, plus annual information reporting. If you have a mortgage, you will want to do some reading on the US taxation of foreign currency mortgage gains. Rental income would be taxed after expenses and depreciation. The US will give a credit for UK tax paid on any doubly taxed rental profit.


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