How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask TaxRobin Your Own Question
TaxRobin, Tax Consultant
Category: Tax
Satisfied Customers: 20925
Experience:  International tax
Type Your Tax Question Here...
TaxRobin is online now

My husband is a UK citizen, who also holds US citizenship

This answer was rated:

Hi, my husband is a UK citizen, who also holds US citizenship (he was born there, though has only lived/worked there for about 11 months altogether in his adult life). We have just discovered that US taxes are supposed to be paid by people working in the UK, even though they don't live there? We are also just about to add him to the deeds for my flat, as we are remortgaging to get some housing improvements done, and I am now concerned about adding him, in case this will open us up to paying more tax in the US if we decide to sell.
Assistant: Have you talked to a tax professional about this?
Customer: no
Assistant: Anything else you want the Accountant to know before I connect you?
Customer: no

Hello and thank you for allowing me to assist you.

Customer: replied 10 months ago.
Hi Robin
Customer: replied 10 months ago.
Did you see my query?

It is true that all US citizens are required to report their income worldwide. There are reliefs though for tax. He could file to exclude income up to an amount of the foreign earnings that is adjusted annually for inflation. There is also a foreign income tax credit allowed

Yes I see it. I am trying to explain all his relief allowed

Customer: replied 10 months ago.
Sorry, I hadn't seen your response
Customer: replied 10 months ago.
Would he be fined for never filing up until this point?
Customer: replied 10 months ago.
He got his US citizenship about nine years ago

Adding him to your deeds does not increase tax nor does it make you liable for US tax unless letting.

He could be fined if he owes US tax.

He should look at the past nine years and file the US returns

A US return year is not closed if a return was never filed. He must file so the time to reassess begins to run out.

Customer: replied 10 months ago.
If he didn't do it before we added him to the deeds for our flat, and the fine/taxes turned out to be very large, would our flat be at risk due to him being on the deeds?
Customer: replied 10 months ago.
I'm just extremely concerned about adding him to the deeds if it could put the property at risk

Yes, his portion would be at risk.

Do not add him until he gets the US tax situation taken care of

He may have no US tax liability. Under US tax law, the Foreign Earned Income Exclusion (FEIE) for 2018 increased from $102,100 in 2017 to $104,100 in 2018. The FEIE amount for 2016 was $101,300, 2015 was $100,800, and 2014 was $99,200.

Please let me know if you need more information.
If not then please scroll up to see the STARS to rate so I am credited.

Customer: replied 10 months ago.
It's really complicated, as he worked in Canada for a long time, and in the US (for the 11 months I mentioned in my first message). Here, he used to work freelance, but has just this year opened his own business. Would the FEIE still apply to him?

Yes it does. Not for the time in the US if he was a citizen then but for all the other years , yes.

Customer: replied 10 months ago.
Do you think the fines are likely to be large? Is any punishment beyond that likely? Is jail a possibilty?!
Customer: replied 10 months ago.
We're very concerned as we had no idea about this until now!

Jail , no.

US applies percentages for penalties based on the actual tax owed.

First, he needs to get the US forms completed to see if he does owe anything.

There is no need to worry yet about an amount until you know if he actually owes.

Please let me know if you need more information.
If not then please scroll up to see the STARS to rate so I am credited.

Customer: replied 10 months ago.
OK, just one more question. He may consider renouncing his citizenship. I assume if he did this, he'd still be liable for back taxes/fines, but not for anything from the point he renounces?
Customer: replied 10 months ago.
Also, if he did owe, would we be able to pay back on a payment plan, or would a lump sum be demanded?

The back requirement to file would still be there. One of the first requirements is that you have filed all your were required to file.

He may be exempt from US tax after that. It depends on how much he earns.

If you expatriated on or after June 17, 2008, the new IRC 877A expatriation rules apply to you if any of the following statements apply.

  • Your average annual net income tax for the 5 years ending before the date of expatriation or termination of residency is more than a specified amount that is adjusted for inflation ($151,000 for 2012, $155,000 for 2013, $157,000 for 2014, and $160,000 for 2015).
  • Your net worth is $2 million or more on the date of your expatriation or termination of residency.
  • You fail to certify on Form 8854 that you have complied with all U.S. federal tax obligations for the 5 years preceding the date of your expatriation or termination of residency.

If any of these rules apply, you are a “covered expatriate.”

If all federal tax requirements have not been satisfied for the 5 years prior to expatriation, the individual will be subject to the IRC 877 and 877A expatriation tax provisions even if the individual does not meet the monetary thresholds in IRC 877 or 877A.

Individuals who have expatriated should file all tax returns that are due, regardless of whether or not full payment can be made with the return. Depending on an individual’s circumstances, a taxpayer filing late may qualify for a payment plan.

Customer: replied 10 months ago.
Thank you so much, Robin. What are the first steps to filing the returns? I assume we'd need a specialist accountant/tax professional? Is this something you can advise on? Or recommend someone who can? I see we can call you, but I don't think that's necessary at the moment.

Any call offer is site generated,not from me.

There are online options to file but I am not allowed to make recommendations. I woudl say use a professional.

You are most welcome.
A positive 5 star rating is appreciated so I am credited

TaxRobin and other Tax Specialists are ready to help you
Customer: replied 10 months ago.
Will do, Robin. Thank you so much for your help.

Best wishes