Comments on: Mind-boggling tax system http://americaninbritain.com/mind-boggling-tax-system Views from across the Herring Pond Thu, 29 Jul 2010 06:46:11 +0000 hourly 1 http://wordpress.org/?v=3.0 By: tonyr http://americaninbritain.com/mind-boggling-tax-system#comment-1923 tonyr Mon, 04 Jan 2010 21:55:21 +0000 http://americaninbritain.com/?p=769#comment-1923 what you should find is that taxes in the UK end up being much higher in general than US Federal taxes. So when you come to file your US tax return you can deduct most of the taxes paid in the UK (if not all) and hence end up owing nothing to the US government, save for the expense involved in paying someone to do the tax return. you must also remember to file statements declaring any bank accounts you may have outside the US, and not doing so opens you up for penalties. the tricky bits become things like retirement plans, capital gains or ISAs - these all attract certain tax benefits in the UK which unfortunately can result in having to pay US income tax. For example, you have a capital gains exemption in the UK (I think it's first £8,000), whereas you don't in the US. So if you benefit from capital gains you may end up paying tax on the portion which was tax free in the uk. find yourself a tax advisor but shop around as the costs vary widely. us embassy has links to tax advisors. good luck! what you should find is that taxes in the UK end up being much higher in general than US Federal taxes. So when you come to file your US tax return you can deduct most of the taxes paid in the UK (if not all) and hence end up owing nothing to the US government, save for the expense involved in paying someone to do the tax return. you must also remember to file statements declaring any bank accounts you may have outside the US, and not doing so opens you up for penalties.

the tricky bits become things like retirement plans, capital gains or ISAs – these all attract certain tax benefits in the UK which unfortunately can result in having to pay US income tax. For example, you have a capital gains exemption in the UK (I think it’s first £8,000), whereas you don’t in the US. So if you benefit from capital gains you may end up paying tax on the portion which was tax free in the uk.

find yourself a tax advisor but shop around as the costs vary widely. us embassy has links to tax advisors.

good luck!

]]> By: Peggy http://americaninbritain.com/mind-boggling-tax-system#comment-1709 Peggy Fri, 04 Dec 2009 16:09:21 +0000 http://americaninbritain.com/?p=769#comment-1709 Sounds confusing! Do you have to pay taxes on unearned income (investments, gambling, inheritance, etc.) in the UK? That's often the "more than one source" in the US. Sounds confusing! Do you have to pay taxes on unearned income (investments, gambling, inheritance, etc.) in the UK? That’s often the “more than one source” in the US.

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