Training in the US with Dual US/UK citizenship

[Sciencey]

I am a dual UK/US citizen who was born in the US but moved to the UK a month after birth. I am a permanent UK resident and pay UK taxes and have never had any connection to the US other than holding a US passport. The company that I work for at the moment is offering me the opportunity to train in the US for a couple of months at a sister site - I will remain a UK employee and be paid a UK salary.

Is this trip possible without too many complications?

 

[Zigner]

You will need to pay file the appropriate tax returns. Beyond that, since you are a US citizen and hold a US passport, there is nothing to stop you from working in the US just like any other US citizen.

 

[LdiJ]

I am a dual UK/US citizen who was born in the US but moved to the UK a month after birth. I am a permanent UK resident and pay UK taxes and have never had any connection to the US other than holding a US passport. The company that I work for at the moment is offering me the opportunity to train in the US for a couple of months at a sister site - I will remain a UK employee and be paid a UK salary.

Is this trip possible without too many complications?

Sure its possible. Heck, it would be possible even if you were not a US citizen. Are you aware that as a US citizen that you are supposed to be filing a US tax return on your world wide income every year? You get an exclusion for a big chunk of any UK income plus tax credits for UK taxes paid on income in excess of the exclusion, but you are supposed to be filing a return. If you have not been filing a US tax return and have not been spending time in the US until now, its possible that this trip could put you on the IRS's radar.

 

[FlyingRon]

In addition to the Tax issues covered above, remember you must enter the US on your US (rather than the UK) passport.

 

[Sciencey]

Hi All,

Many thanks for all your replies - I'm aware that I have to enter the US on my US passport but no, I wasn't aware that I have to file US tax despite being a UK tax resident my whole life. By the looks of things, I should be okay as long as I don't exceed a particular yearly threshold? Also, would this affect any money saved into a bank account from UK-taxed income?

I've contacted a US/UK accountant to get the ball rolling as I don't have the slightest clue how to go about things. Would I have to have things fully sorted before heading to the US? Beyond this, would I need any other paperwork prior to heading to the US as a business visitor, as I guess this is what it would be?

Thanks again!

 

[LdiJ]

Hi All,

Many thanks for all your replies - I'm aware that I have to enter the US on my US passport but no, I wasn't aware that I have to file US tax despite being a UK tax resident my whole life. By the looks of things, I should be okay as long as I don't exceed a particular yearly threshold? Also, would this affect any money saved into a bank account from UK-taxed income?

I've contacted a US/UK accountant to get the ball rolling as I don't have the slightest clue how to go about things. Would I have to have things fully sorted before heading to the US? Beyond this, would I need any other paperwork prior to heading to the US as a business visitor, as I guess this is what it would be?

Thanks again!

How old are you? How long have you been in the workforce?

Filing US tax is more of an inconvenience than anything else for the average taxpayer living abroad. The foreign income exclusion is around $100,000 USD and you get a tax credit for any foreign taxes paid on income above that level, so you are not going to get taxed twice. However there may be varying tax rates so you might end up paying a little more tax overall, or you might not.

Where it gets bad is if you own property or have significant assets abroad. The US doesn't tax those assets but imposes major fines if the assets are not reported. If you have never had more than $10,000 USD in any bank account and don't own any major assets then that is not a problem for you. If you do, then its an issue.

You do not have to have things fully sorted before you visit the US.

 

[Taxing Matters]

As a U.S. citizen with a U.S. passport you don't need any particular reason to enter the country or special paperwork. The government cannot keep you out. You won't need to have the taxes all sorted out before coming to the U.S. It’s just something that you will need to address sooner rather than later to make sure that you don't end up owing a bunch of tax, penalty, and interest to the U.S. because you failed to comply with the rules.

As for the U.S. tax issue, chances are that you would not owe a whole lot, if anything. As was pointed out in an earlier reply, your income from work outside the U.S. may be excluded under the foreign earned exclusion. For 2018, this allows you to exclude up to $104,100 of earned income from your gross income. The one possible problem with this is that taking this exclusion is an election you must make the first year you wish to take it, and that must generally be done on a timely filed tax return. That would prevent you from claiming the exclusion for 2016 and earlier, and might exclude you from doing it 2017 if you don't have a valid extension. You get an automatic extension to file until June 15 when you are out of the country at tax filing time. So you might want to get that 2017 extension filed by the 15th. You might be able to go back for earlier years by seeking permission from the IRS to do so, if you have good cause for why you didn't file the election on time.

You also may claim a foreign tax credit for the income tax you pay the U.K. on your U.K. earnings. If the U.K. tax rate on that income is equal to or higher than the U.S. rate then the effect is a credit that completely offsets the U.S. tax and you would owe nothing. Otherwise, the effect is that you pay U.S. tax on the difference between the U.S. and U.K. rate.