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    • Momzilla
    • By Momzilla 5th Mar 18, 11:29 PM
    • 2Posts
    • 0Thanks
    Foreign Income double tax issue
    • #1
    • 5th Mar 18, 11:29 PM
    Foreign Income double tax issue 5th Mar 18 at 11:29 PM
    I am a US citizen who relocated to the UK from the USA last year (2017). Prior to that time I was employed, and accrued a month's vacation pay. I moved over, and had the vacation pay deposited to my bank in the USA after I had arrived in the UK. (Basically, I was on vacation for a month in the UK.) The IRS has taxed it as employment income. (IRS tax year ended 31 Dec.)

    I asked HMRC if they considered this amount as taxable, and I have received two answers - one yes, one no. My thought is that it was earned (accrued) prior to becoming a UK resident it is, thus, non-taxable. The employer has no presence in the UK and I performed no work for them while here. I have been advised by friends that my interpretation is correct, and referred to "statute" but am unable to locate anything on the HMRC website that discusses this. Can anyone point me to such language?

    [There is no way to get a credit against my 2017 USA taxes if taxed by HMRC because I would have had to have the HMRC tax paid by 31 Dec 2017 to list it on my 2017 IRS tax forms, and the HMRC tax doesn't formally accrue until April 2018. I'd prefer to not be double-taxed!]
    Last edited by Momzilla; 06-03-2018 at 5:27 PM.
Page 1
    • jimmo
    • By jimmo 6th Mar 18, 12:22 AM
    • 1,913 Posts
    • 2,374 Thanks
    • #2
    • 6th Mar 18, 12:22 AM
    • #2
    • 6th Mar 18, 12:22 AM
    In the UK the first principle is to establish whether you are taxable or not on the specific income you receive. Then, if you are taxable, the next question is which year you are taxable for.
    In your case you did not work for your American employer after becoming resident in the UK Therefore your earnings from that job are not taxable in the UK.
    Last edited by jimmo; 06-03-2018 at 11:18 AM.
    • EdSwippet
    • By EdSwippet 6th Mar 18, 8:48 AM
    • 681 Posts
    • 644 Thanks
    • #3
    • 6th Mar 18, 8:48 AM
    • #3
    • 6th Mar 18, 8:48 AM
    There is no way to get a credit against my 2017 USA taxes if taxed by HMRC ...
    Originally posted by Momzilla
    Because this is income that was earned for 'services performed in the US', it is primarily taxable to the US and you would instead have to claim any credit against UK taxes. Details in the US/UK tax treaty.

    In practice there probably should not be any UK tax due on it, but even if there is then it is very likely that taking credit for your US tax will wipe it out. Remember that you can take a UK tax credit against most US state tax liabilities too. Also US medicare tax, if I recall correctly.
    • Momzilla
    • By Momzilla 6th Mar 18, 12:49 PM
    • 2 Posts
    • 0 Thanks
    • #4
    • 6th Mar 18, 12:49 PM
    • #4
    • 6th Mar 18, 12:49 PM
    Technically I was still on their employment roster, just on "vacation" - but yes, I did no work here in the UK. Thanks for the link to the regulations. I'll be sure to read them carefully.
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