In this series of Insight videos and accompanying articles our US UK Private Client team explain some of the key tax considerations for US citizens living in the UK.

US beneficiary of a non-US trust
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US beneficiary of a non-US trust

Non-US trusts are often not set up with US tax issues in mind which can cause quite a few pitfalls and potentially lead to onerous penalties.

The way in which US settlors and US beneficiaries are taxed in respect of their interest in a non-US trust is dependent on how the trust is classified. It is important to understand the trusts classification and what that means from a US tax perspective. 

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 Check-the-box election
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Check-the-box election

Entity classification elections, or ‘check-the-box’ (CTB) elections, allow certain foreign entities the ability to change their default tax treatment for US tax purposes to avoid a mismatch between US and UK tax treatment.

These elections also provides the ability to avoid anti-avoidance rules that apply to US owners of UK companies.

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US/UK taxation of carried interest awards
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US/UK taxation of carried interest awards

It is important to consider the tax impact across both sides of the pond when being awarded carry to avoid potential pitfalls.

Investment managers need to ensure correct elections are made, mitigate double-tax and ensure that the global tax position is optimised when the carry eventually pays out. To achieve this, collaboration with your tax advisor is essential.

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US/UK taxation of carried interest
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US/UK taxation of carried interest

Investment managers in the private equity, venture capital and hedge fund arenas can be remunerated in the form of carried interest. This is typically received as cash distributions but may also be in the form of shares. 

As carried interest is taxed very differently in the US compared to the UK, ensuring the alignment of income and credits across the two jurisdictions is key and requires specific expertise.

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Expanding into the US
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Expanding into the US

The US represents a huge untapped market for UK businesses. However, any business considering expanding into the US need to be aware of the complexities of the US tax system.

In this article we explain the key tax concepts and considerations for international expansion.

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The problem with US Revocable Living Trusts for UK resident grantors and beneficiaries
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The problem with US Revocable Living Trusts for UK resident grantors and beneficiaries

US Revocable Living Trusts (or Living Will Trusts) are a commonly used estate planning tool in the US because they help to avoid costly and lengthy probate processes. However, these types of trusts can be problematic for UK connected individuals and potential issues are not always immediately apparent.

In this article we explain the key issues with US Revocable Living Trusts and how best to overcome them.

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Investing in US Real Estate
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Investing in US Real Estate

Many foreign individuals and US people (citizens, green card holders and US tax residents) invest in the US real estate market as a way to diversify their assets holdings and as a potential long-term investment.

In this article we discuss the main items to consider when investing in US real estate.

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Double Taxation
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Double Taxation

Double taxation is where income and gains are taxed twice. This can occur when an individual is within the scope of tax legislation in two jurisdictions at the same time.

As we will learn, with the right planning there is often a solution, but in some situations, individuals can find themselves in a double tax position.

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Family succession and transfer of wealth
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Gifts and family succession planning

The transfer of wealth is an emotive topic and there are many non-tax considerations which need thought and attention before tax comes into the conversation. However, the tax constraints can help to focus the mind and identify the available options.

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US Trustees and their UK resident beneficiaries
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What US Trustees and their UK resident beneficiaries need to know about UK tax

Trusts have long been a part of US estate and succession planning.They are important vehicles for protecting family wealth through the generations and can provide flexible solutions for families. Tax rules in relation to trusts and beneficiaries are complex in both the US and the UK, and there is an additional layer of complexity when considering the interaction between the two jurisdictions.

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The Problem with LLC's
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If you live in the UK and invest in the USA, then beware of the US Limited Liability Company (LLC)

US LLCs are a type of private limited company. They offer investors limited liability and also have an attractive tax profile under the US Internal Revenue Code. This combination has resulted in LLCs being widely used in the USA as pooled investment vehicles. Such structures raise no issues for the investor who is resident in the USA. However, the picture can change dramatically in an international context.

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Green Card Tax Consequences
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Green Card Tax Consequences

To set a common scenario: imagine that you moved to the US on assignment, it was only meant to be for a couple of years, but life has other plans; a great opportunity arises requiring you in the US for an indefinite period of time, or you meet someone that makes a longer stay in the US feel like a compelling option.

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Tax efficient investments
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Tax efficient investments

Investments can become tax inefficient in cross-border situations, and there may be other surprises.

Most individuals with spare funds to invest will at some time have been involved in tax planning. Without doubt, this will have been done with the view to avoiding unnecessary taxes. Nevertheless, the activity in question will have taken place with acceptance by, and even encouragement from, the authorities in the country where the investor was living at the time.

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Expatriation and exit tax
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Expatriation and exit tax

US citizens are subject to US taxation and reporting wherever they are resident in the world. Green Card holders are also subject to the same US income tax and reporting requirements as US citizens.

For those who have a second citizenship, they may choose to free themselves from their US status and tax filing obligations. US citizens can renounce their citizenship and Green Card holders can surrender their Green Card. Both of these routes are considered an expatriation for US tax purposes.

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US/UK tax compliance and advisory services

Personal tax is one of the most complex areas of wealth management and can significantly erode your wealth over time.

When you are exposed to the competing international tax systems of the US and UK, this is made all the more complicated.

Blick Rothenberg is considered to be market leaders in the taxation of non-UK domiciled individuals and offshore trusts, as well as cross-border personal taxation.

We have a strong base of clients in the UK and a broad and longstanding international focus too, acting for a large number of non-UK domiciled individuals and international families.

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US Tax Books Blue_450x300

Confused by how US/UK tax rules might impact your business?

Many entrepreneurs find the US tax rules to be an impenetrable web of acronyms, jargon, and technical detail.

Our US UK Private Client team specialise in helping people like yourself to navigate the US and UK tax rules, cutting through the confusion, translating some of the key terms, and helping you understand how these rules affect your business.

We aim to provide practical advice and prepare your US tax return filings to ensure that you comply with the increased reporting required by the IRS for US entrepreneurs.

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Our expert team

RS836_John Bull - Partner 2-scr
Head of US/UK Private Client

John Bull

RS541_Sonya Rees - Director - US UK Tax-scr
Partner

Sonya Rees

Ed Rieu - Scr
Partner

Ed Rieu

RS743_Alex Straight - Partner 3-scr
Partner

Alex Straight

RS1025_Adam Rose - Partner 5-scr
Partner

Adam Rose

Contact Us

US/UK Private Client

Personal tax is one of the most complex areas of wealth management and can significantly erode your wealth over time.

Blick Rothenberg is considered to be market leaders in the taxation of non-UK domiciled individuals and offshore trusts, as well as cross-border personal taxation.

We have a strong base of clients in the UK and abroad and longstanding international focus too, acting for a large number of non-UK domiciled individuals and international families. We therefore understand the complexities that US citizens face when living, working and operating businesses in the UK.

Whether you are a start-up entrepreneur, a wealthy family with complex affairs, or a business executive, our dual-qualified team of tax advisers will look after your US UK personal tax affairs as well as those of your business.

If you wish us to contact you or want to discuss your situation please complete the form on this page and one of our team will be in touch.