US tax returns and tax planning
We can assist with the preparation of individuals Federal and State tax returns and we can use this opportunity to consider your assets and investments and their tax efficiency.
For US citizens, green card holders and residents it is generally necessary to file a US Federal Tax Return (Form 1040) even if they are resident in the UK. In addition, certain non US persons may have a US filing requirement where they have investments in the US or conduct business in the US or travel to the US as part of their employment. These individuals will be required to file a non resident tax return (Form 1040-NR). Even where the tax treaty between the UK and US applies many US states may still have a filing requirement.
Many of our clients have lived in the UK for a number of years and will have large parts of their life arranged in the UK, for these people our ability to handle both UK and US taxes will be invaluable to ensure taxes are paid to the right jurisdiction, foreign tax credits are claimed where necessary, the Treaty between the two countries are considered and penalties are avoided. Plus, do not forget all the reporting for foreign assets and accounts which includes the separate foreign bank account report filing which is actually a separate return.
We can advise individuals on pension planning, trading through foreign partnerships or corporations, membership of such entities and the associated filing implications (Form 8865 for foreign partnerships and Form 5471 for controlled foreign corporations) and foreign trusts of which you may be a grantor or beneficiary (Form 3520). In many cases, that will involve the determination of how the UK tax situation of UK plans and entities will interact with the US tax laws which is our firm’s specialism.
The climate has changed significantly in recent years with the introduction of Foreign Account Compliance Tax Act (FATCA) which requires financial institutions to disclose details of US citizens to tax authorities making accurate compliance and disclosure of foreign accounts and assets more important than ever. Anyone who is behind on their US taxes should review our US disclosure page.