living in the US/but UK citizen.

heydee

Q - sorry if wrong location on forum - but if, theoretically, I worked in the US (I'm a Brit) and pay income tax there, working on a Visa, permanently resident - where would I pay tax on gains on savings in the UK, or on shares I bought whilst in the UK, but sold whilst in the US, or on any dividends on those shares, or indeed on any other capital gains made by virtue of buying in the UK and selling whilst in the US.
It's all a little confusing! Thanks!

pjclar02

Hello there

It depends - as is so often the question in these sort of cases. If you remain tax resident in the UK, you will be taxable on your worldwide income.

If you break UK residency, you will be taxable on income with a UK source i.e. bank interest. You will be able to claim a credit for tax paid in the UK against tax payable in the US.

If you remain non-resident for five whole tax years, during which time you sell capital items, then any capital gains may avoid UK capital gains tax.

The rules are more complex than this, but this is a simplified version seeing as it is only a hypothetical situation.

heydee

Thanks. Not as hypothetical as I inferred. Just being a little tongue in cheek.
I am working in the US for 3 years (for now) and am tax resident in the USA.
Do I still need to fill in a UK tax return and by the above post, do you mean the tax on the bank interest is payable in the UK? Or do I pay tax on it in the in the US? Same with the dividends?
Also - I bought a property whilst based in the UK. And might sell it soon. To complicate matters, it is off-plan property in a 3rd country! So the capital gain will likely be made after April 2012. Do I then declare it in my US 2012 tax return form, or fill in a UK 2012-13 tax return form and make the declaration in that?
It's all a little messy...am guessing I need to speak with a tax advisor, but I am thinking of the hefty expense!

dzug1

You - probably - pay tax in both countries.

However any tax you pay in the UK will be deducted from what you owe in the US so you effectively land up paying the tax of the country that has the higher rate

I shy away from answering about the property

pjclar02

It depends!! If you have minimal UK interest, and you have not been issued with a UK tax return then you will not have to complete one.

The bank interest will be liable to UK tax, but this should be taken at source.

Dividends should be tax free.

The sale of assets will be exempt unless you return to the UK within the five tax years so no need to declare this in the UK.

Tax advisors do not all come with hefty fees!! Feel free to PM if you need advice and we will give you a good price!!

getmore4less

Worry about the US they try to tax everyone in the world.

The cost of international tax advise will probably pay off in the long run.

Cook_County

US tax is simple. You report worldwide income and gains, figure PFIC tax on any PFICS, file annual FBARs and Form 8938 and you are done.

Get a dual US/UK qualified tax adviser to assist if unclear.

You said previously you moved to the US in 2010 so doubtless you filed for 2010 last year; I am worried that you may have some PFICs as well as real property.

John_Pierpoint

Will your employer help put.
I think tax advice is an allowable expense in the USA?

Don't forget you can buy a badge in the USA that reads:
The IRS is a terrorist organisation