Now you’ve left home and taken the step to move abroad, the next step is to stay current with your taxes.
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US Expats Living Overseas
US citizens are in the rare situation that they need to continue filing US tax returns after they leave the US.
The tax rules are that the US return includes worldwide income, even if that income has already been declared and taxed overseas.
As a US expat living outside the US, the filing deadline for the tax return is June 15.
If you have income from outside the US and that income has already been taxed in the other country, you will be able to claim the foreign tax credit to reduce the US tax.
Expats Filing Uk Tax Returns
As a US citizen moving to the UK, you will report worldwide income in the UK from the date you arrive – this is the date you will be deemed resident in the UK.
Expats need to register for self assessment tax returns. The tax year in the United Kingdom runs from April 6 to April 5 each year – the filing deadline for the assessment returns is January 31 after the year end.
Any UK income tax is also due when you file the return – 31 October if by paper.
Tax Relief For Expats
The US and UK have tax treaties to stop you paying tax twice in both countries – double taxation.
The country where you perform the services has the right to charge a tax liability – you would then also declare in your home country and claim double tax relief for the tax bill.
The tax treaty will look at the residency test, it may be that you are tax resident in two countries at the same time.
Choosing An Expat Tax Firm
You will need a tax firm that specializes in expats and has an understanding of UK and US taxes.
When you leave the US and arrive in the UK, it’s important that you claim all the tax reliefs, file all the required tax forms and make sure you are not double taxed – having an expat accountant will help with all of that.