Any US/UK dual citizens

Soldato
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*** PSA, this is a 2016 thread which has been necro'd ***

I'm lucky enough to hold dual nationality, but as any other dual citizens out there will know, this makes investments and tax a nightmare.

I'm at a stage in my career now where I could afford to put £500-1k a month into an ISA. However, due to the tax-free status of ISAs here, my understanding is that I'd have to pay tax on them in the US.

Is anyone in a similar position, and how do you invest / save?

I appreciate that the advice will be to speak to an accountant, and I've got a meeting set up next week, but I'm just wondering if anyone is in the same boat. I have considered giving up the US citizenship, but ideally would like to retain the option to live there one day (a lot of my family are there) so if I can save reasonably here while still remaining a citizen, that would be great!
 
Soldato
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Speak to an accountant buddy.

I am the following :

1)UK Citizen
2)Australia Citizen
3)Indian Overseas Citizen

I have some element of income in each country (either from business or assets). Double taxation rules, residency rules, it can get complicated.
 
Soldato
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Under the hot sun.
I'm lucky enough to hold dual nationality, but as any other dual citizens out there will know, this makes investments and tax a nightmare.

I'm at a stage in my career now where I could afford to put £500-1k a month into an ISA. However, due to the tax-free status of ISAs here, my understanding is that I'd have to pay tax on them in the US.

Is anyone in a similar position, and how do you invest / save?

I appreciate that the advice will be to speak to an accountant, and I've got a meeting set up next week, but I'm just wondering if anyone is in the same boat. I have considered giving up the US citizenship, but ideally would like to retain the option to live there one day (a lot of my family are there) so if I can save reasonably here while still remaining a citizen, that would be great!

If you are having income in only one country, there is no need to declare anything to the second country. Only the country to live more than 6 months + 1 day.
If you are moving around the money, then you need to see what bi-lateral agreements UK has signed with the US on this area. But best case on that, go through a legal off shore scheme.

I will be surprised if there is none, not because is the US but because is the UK part. Which signed such bi-lateral agreements even with Greece all way back to 1953.

(I have dual citizenship but only declaring in UK since I have nothing in Greece).
 
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Soldato
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If you are having incomes in only one country, there is no need to declare anything to the second country. Only the country to live more than 6 months + 1 day.
If you are moving around the money, then you need to see what bi-lateral agreements UK has signed with the US on this area.

I will be surprised if there is none, not because is the US but because is the UK part. Which signed such bi-lateral agreements even with Greece all way back to 1953.

(I have dual citizenship but only declaring in UK since I have nothing in Greece).

Yes, this basically. If you have no income in the US, you dont need to declare anything in either country.
 
Soldato
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If you are having incomes in only one country, there is no need to declare anything to the second country. Only the country to live more than 6 months + 1 day.

I'm not an expert on this but the US is a special case. It's way more harsh about claiming tax from overseas citizens.
 
Soldato
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Speak to an accountant, as has already been demonstrated you are going to get some awful advice from here.

If you are having income in only one country, there is no need to declare anything to the second country. Only the country to live more than 6 months + 1 day.
If you are moving around the money, then you need to see what bi-lateral agreements UK has signed with the US on this area. But best case on that, go through a legal off shore scheme.

I will be surprised if there is none, not because is the US but because is the UK part. Which signed such bi-lateral agreements even with Greece all way back to 1953.

(I have dual citizenship but only declaring in UK since I have nothing in Greece).

Yes, this basically. If you have no income in the US, you dont need to declare anything in either country.

The US taxes their citizens on their worldwide income regardless of where they are resident.
 
Man of Honour
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Speak to an accountant, as has already been demonstrated you are going to get some awful advice from here.


The US taxes their citizens on their worldwide income regardless of where they are resident.

This - the US has all kinds of complications on this that other countries don't - hence why recently a few people dropped their US citizenship in favour of the other one they held.
 
Soldato
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This - the US has all kinds of complications on this that other countries don't - hence why recently a few people dropped their US citizenship in favour of the other one they held.

Yeah, I've considered dropping mine a number of times, the tax returns are a nightmare, and it's going to make buying property and investing decently impossible. I'm just a little reluctant courtesy of Brexit; suddenly I'm considerably less able to get off this little island!
 

aMb

aMb

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You may have excess foreign tax credits from a US tax perspective (for example from your employment income) to offset against the US tax due on non-taxed investment income, but you need to be careful with a stocks and shares ISA if it is considered a PFIC from a US perspective and then subject to whatever additional reporting/punitive tax rates the US subject it to.
 
Caporegime
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Yes, this basically. If you have no income in the US, you dont need to declare anything in either country.

Force, the US taxes it's citizen s globally. You live and work in the UK you have to file US taxes. Of course, there are double taxation rules so you pnly pay the difference in taxes. If for some reason you had to.pay $12000 tax in the US but had paid $10000 in the UK then you would owe the US $2000. Si CE the US has relatively low taxes this is unlikely to happen
 
Don
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Speak to an accountant buddy.

I am the following :

1)UK Citizen
2)Australia Citizen
3)Indian Overseas Citizen

I have some element of income in each country (either from business or assets). Double taxation rules, residency rules, it can get complicated.

Are you Jason Bourne? :p
 
Soldato
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Are you Jason Bourne? :p

Unfortunately my life isnt half as exciting. I do probably travel more than him though.

Wasnt aware of the US regulations in respect of tax. I do declare my worldwide income on every tax declaration in each and every country. I do, however, only pay tax in the respective countries. Double taxation agreements and all that.

So in short....ignore my advice....get an accountant. Money grabbing *******:D
 
Caporegime
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What I'd give for dual nationality... If I ever decide to have a child, we're going to the US and staying until its born, just so they have that opportunity later in life. Unless I've already married an American of course. :p
 
Soldato
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There is a foreign earned income exclusion which is just over $100,000, and US personal income tax rates are generally lower than the UK so you're unlikely to owe the IRS any money unless you have large capital gains.

A few people have told you to speak to an accountant but I'd urge caution with this too. Most UK accountants will know very little about US tax law, and I've seen so many cases online of people being given totally incorrect advice by accountants and having real problems down the line.

If you're going to speak to somebody make sure they know both the UK and US tax systems - I doubt there are that many around so it might take some searching.

I assume you're aware of the FBAR/Form 8938 filing requirements for foreign financial assets?
 
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Permabanned
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I'm lucky enough to hold dual nationality, but as any other dual citizens out there will know, this makes investments and tax a nightmare.

I'm at a stage in my career now where I could afford to put £500-1k a month into an ISA. However, due to the tax-free status of ISAs here, my understanding is that I'd have to pay tax on them in the US.

Is anyone in a similar position, and how do you invest / save?

I appreciate that the advice will be to speak to an accountant, and I've got a meeting set up next week, but I'm just wondering if anyone is in the same boat. I have considered giving up the US citizenship, but ideally would like to retain the option to live there one day (a lot of my family are there) so if I can save reasonably here while still remaining a citizen, that would be great!

I am a Uk/Us Dual.

You have to pay US taxes on everything you earn overseas, however, there is a tax break of around 80-90k? If I remember correctly. There are also tax treaties between countries to avoid double taxation.

A lot of people fail to realize that US citizenship is a pain in the butt if you do not permanently reside there.

I'd talk to CPA so that you don't get on the naughty list of the of the IRS because those boys are rather vicious.
 
Soldato
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There is a foreign earned income exclusion which is just over $100,000, and US personal income tax rates are generally lower than the UK so you're unlikely to owe the IRS any money unless you have large capital gains.

A few people have told you to speak to an accountant but I'd urge caution with this too. Most UK accountants will know very little about US tax law, and I've seen so many cases online of people being given totally incorrect advice by accountants and having real problems down the line.

If you're going to speak to somebody make sure they know both the UK and US tax systems - I doubt there are that many around so it might take some searching.

I assume you're aware of the FBAR/Form 8938 filing requirements for foreign financial assets?

Thanks. Do you know whether the foreign earned income exclusion limit includes my usual PAYE salary, or does that fall outside the $100k limit as it's taxed more heavily here than it would be in the States? If the latter, any capital gains will certainly not take me outside the exclusion.

Yup, I'll be finding a good UK/US accountant; my mum's obviously got the same issues (and has far more by way of investments than me) so she knows some useful accountants.

All up to date with my FBARs, but thanks :)
 
Soldato
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If you are having income in only one country, there is no need to declare anything to the second country. Only the country to live more than 6 months + 1 day.
If you are moving around the money, then you need to see what bi-lateral agreements UK has signed with the US on this area. But best case on that, go through a legal off shore scheme.

I will be surprised if there is none, not because is the US but because is the UK part. Which signed such bi-lateral agreements even with Greece all way back to 1953.

(I have dual citizenship but only declaring in UK since I have nothing in Greece).

This isn't entirely true for US citizens, I thin for every other dual nationality it applies, but the US is a little different in how they allow people to hold dual nationality.
I believe you earnings PAYE taxes or not all count towards the threshold.
Best speak to an accountant.
 
Caporegime
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I have considered giving up the US citizenship, but ideally would like to retain the option to live there one day (a lot of my family are there) so if I can save reasonably here while still remaining a citizen, that would be great!

Have a very long think before giving up something which many people would consider a massive, massive benefit.
 
Soldato
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Thanks. Do you know whether the foreign earned income exclusion limit includes my usual PAYE salary, or does that fall outside the $100k limit as it's taxed more heavily here than it would be in the States? If the latter, any capital gains will certainly not take me outside the exclusion.

The IRS website explains how it works - https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion

The foreign earned income exclusion only applies to earned income as the name suggests - salary, bonuses, commission etc. Capital gains are taxed separately and the exclusion won't apply to them.
 
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