Anyone moving to live in the US should be aware that all of their worldwide assets and income must, in general, be declared to the IRS and will potentially be liable to taxation. It is therefore important to seek advice very early in the immigration process and ideally when you are considering your move. This is the best course of action because the US tax system and tax year differs from many other countries, and applying your experience of requirements in other countries may create potentially expensive tax liabilities.
We can help you through the whole tax planning process, and provide you with a lasting tax structure, tailored specifically to your requirements – so you can rest assured that your assets and business are well protected.
Did you know?
If you become a resident in the US from October 2012 you will be considered a resident for tax purposes from the beginning of January of the year. So if you had disposed of an asset in January in the UK and paid tax in that UK tax year you may still have a liability for tax in the US.
You can mitigate the risk by planning ahead.
Property and Tax
Case study: Mr and Mrs Jones sell their UK property
Mr and Mrs Jones sell their UK property in February and immigrate to the USA eight months later in October. When selling the property they make a gain of £150,000. The gain made will be liable for US income tax owing to what is known as the ‘physical presence test’.
By disposing of your assets prior to becoming a resident and placing them in a structure abroad, they are not directly owned by you and, as a result, free of tax. We can help you to properly structure your assets to ensure you pay minimum US estate tax.
Business and tax
Whether selling shares in a company prior to your move, or retaining ownership of your business outside of the US, you need to take note of some of the prospective tax challenges.
Case study: Mr and Mrs Smith are selling their UK Company
Mr and Mrs Smith sell their company in January and move to the US in October. They do not consider for a moment that they are US tax residents at the time of the sale. They must ensure that they elect to opt-out of instalment sale treatment in the USA, or else any sum received after becoming a resident may be liable for US income tax.
Did you know?
If you intend to keep your business abroad whilst residing in the US, the rules are extremely complex. Tax structuring is essential under these circumstances – so contact us today to discuss your situation in greater detail.
Plan now, and secure your future
We want to ensure that any potentially adverse consequences of your US residency are removed completely, leaving you to enjoy your move overseas.