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My husband I used to live in the US with green card status.

Resolved Question:

My husband I used to live in the US with green card status. We had to return to the Uk in 2009 for family reasons. I am working full time in the UK and had to relinquish my green card as I couldn't return every six months to the US as required.
My husband is 73 and is receiving pension from US (into a US bank account) and UK (into a UK bank account. He has been working on a new project relating to his field of fire protection which has meant he has spent a considerable time living in the US since 2009. He was part of a US company which he left in 2008 but continues to receive income from this company through the sale of his shares. His green card is due to expire in October 2014. He is now spending more time in the UK than in the US and although he has a fixed address in the US this is not a property we own or rent. He stays with friends and pays rent to them when he is in the US.
Until now he has submitted tax returns to the USA and paid tax on the income he has received through his shares. My question is whether this is what he should continue to do or whether he should be taxed on this income in the UK. He is about to set himself up as a consultant as he has been asked to undertake some work by a US company relating to his field of fire protection engineering. The intention is that he registers this with HMRC. Please can you advise.
Submitted: 3 years ago.
Category: Tax
Expert:  TaxRobin replied 3 years ago.
Hello,
As long as your husband has the Green card (and continuing to be present in the US) he should file a US tax return. As a green card holder, you generally are required to file a U.S. income tax return and report worldwide income no matter where you live. Of course he is allowed all benefits for relief from Double Taxation in the UK but filing is required. If he is in the UK more than the US he may claim relief under the treaty provisions (but he would still be taxed in the US on US sourced income).
Should he surrender his Green card he would need to look to tax law to see if he is under the expatriation tax.
You are a long-term resident for U.S. federal income tax purposes if you were a lawful permanent resident of the United States (green card holder) in at least 8 of the last 15 tax years ending with the year your residency ends. His residency will end when he surrenders the Green Card. In general, the expatriation tax provisions apply to U.S. citizens who have renounced their citizenship and long-term residents who have ended their residency.
He could claim treaty benefits as a resident of the other country, you must file a return by the due date (including extensions) using US Form 1040NR or Form 1040NR-EZ, and compute his tax as a nonresident alien. He must also attach a fully completed Form 8833 if he determines his residency under a tax treaty and receive payments or income items totaling more than $100,000.
Those shares he sells are US sourced but as a nonresident he would not pay US tax on the shares if he is no longer resident in the US.
All his US taxation hinges on his residency (while still a US green card holder).
Customer: replied 3 years ago.

Many thanks. This has answered my questions.

Expert:  TaxRobin replied 3 years ago.
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