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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4973
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I am a self-employed dancer/UK taxpayer/home owner who is based

Resolved Question:

I am a self-employed dancer/UK taxpayer/home owner who is based in London and I earn money in the USA and pay tax on it in the UK. I am thinking of basing myself in the USA and buying a property there although I will still retain a property in London when I come here to dance and visit family. Can I still be a UK taxpayer? or do I have to be a US taxpayer. I only want to pay tax once on income etc.
Submitted: 2 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 2 years ago.
Hello and welcome to the site. Thank you for your question.

Rules on what is residency for tax purposes changed with effect from 6 Apr 2013. If you retain a property in the UK and have family links in the UK, you would most probably be regarded as UK resident for UK tax purposes.

You have concerns about paying tax more than once on the same income. Under double taxation treaty with various countries including the USA , same income is taxed once. If you have to declare that income in the UK being a UK resident and pay tax on it, then you can claim foreign tax credit suffered on the income in the USA against your overall UK tax liability.

I am providing you a link that explains how residency rules have changed. This should help you see where you stand in terms of UK residence.
http://www.accaglobal.com/ie/en/discover/cpd-articles/taxation/fa13-statutoryresidence.html

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.


Customer: replied 2 years ago.

Thank you, ***** ***** principle the same for property I buy (and sell) in the usa and/or uk. As you say my primary residence will be the UK house but I want to buy one in the USA, will I only pay capital gains once on another property regardless of where it is.

Expert:  taxadvisor.uk replied 2 years ago.

Thank you for your reply.

Your property in the UK would be your principal private residence for capital gains tax purposes. Any gain you make from sale of it would be covered by private residence relief provided it remains your main residence.

The property you buy in the US would be a second home for CGT purposes unless you make that one your main residence once you move over. In that case, the UK property will lose that privelge as you can only have one main residence at any one time.

Any gain made from sale of second home would attract CGT. You claim your gains allowance against it and the balance is taxed at 18%, 28% or a combinaton of two depending on your total income in the year the sale takes place.

I hope this is helpful and answers your question.

Customer: replied 2 years ago.

I suspect I may be domicile here but not ordinarily resident. I work full time in the US with 3 or 4 visits a year to UK which may take me over 91 days. Does that affect any of your advice. I am happy to remain a UK taxpayer, not really keen on being a US taxpayer. Is there anything I need to be aware of.

Expert:  taxadvisor.uk replied 2 years ago.
Thank you for your reply.

I think you may end up paying tax in both countries ..
i.e in the UK on your worldwide income because of your UK residency status for tax purposes and in the US on local income there.

Having said that, you would claim foreign tax credit relief against tax suffered in the US when you complete your UK tax return under double taxation treaty between the two countries .

I hope this is helpful
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