i realize this might vary widely depending on circumstances, but does anyone have experience living in the UK working as an expat, and can comment on if this is feasible from a tax point of view?

from what i gather in some initial quick research, the foreign income exclusion helps, but really sure what else factors into all this.

Yep here now. Is your company sending you or you just looking to go over on your own? If you are with a company they should tax equalize you and give you a briefing, if not good luck and find someone who specialises in expat taxation issues.

I had an extremely in depth tax briefing with a big 4 accounting firm who handle my tax before I left the US. Tax is complex in the US and UK, there are many things you need to consider in terms of shielding assets amd how you setup your accounts so UK will not tax you on any US based income.

thanks.

yeah, i am looking at taking a new position in my company to work in the UK, but it wouldn't be full expat terms where they would cover my tax burden. this would be a "local non national" so it's up to me to cover any tax responsibility.

internally there is some support for tax prep, and some guidance how to set up bank accounts to minimize burdens, but i need to find out if i'm gonna get screwed with this or not.

Gotcha....good luck. I have been overseas on two separate overseas assignments now.

Bottom line, even with the foreign tax credits the US is still going to take its share and it pisses me off to no end. I believe it is US and Afghanistan are some of the only countries taxing their citizens when working abroad.

In SE Asia I had a number of US guys working on local type deals and I somewhat came to the conclusion that if you aren't being tax equalised it is not worth it to go overseas....especially if you are getting paid local market wages yet getting hit with the additional US tax burden. Not sure if you have signed the contract but make sure you fully understand what you are getting into from a tax perspective. If the company isn't tax equalising negotiate everything else possible to lessen the burden...increased salary, COLA, transport allowance...the list goes on and on.

I would recommend you try and reach out to tax professional in the UK who is familiar with US expat taxation issues - Deloitte and other firms have specialists who can advise you.

10,000 foot view = you pay taxes in US on all income; you get a credit for foreign taxes paid. Any excess to your US tax liability (offset by the credit) due to the foreign jurisdiction is out of your pocket without equalization. There is also an issue of liquidity in your having to front end the foreign taxes before getting any credit in the US. As said before, tax treaties and such can change the above substantially, go see a local professional who has dealt with this.

I believe user 59south would be helpful for you. He's gonna deployed by his company in London I think.

thanks all. at this point, nothing is signed or agreed. i'm just trying to understand if it's something i can take or not.

does anyone have a tax professional they'd recommend to talk to?

If you post an email I can send you some contacts at Deloitte UK. I have no idea how much their advisory service actually costs.

Just look at HRONline the international mobility and you can go to the calculator. You plug in the details of your assignment, and it gives you all the differences. Tax equalization is done by the company. Only sticky part is if you have income outside the company. Other than that all the policies are designed to keep you whole. London is not considered a hardship so your up lift is not going to be significant.

You either give it to the state or accounting firms. Either way, all your base are belong to us.

it's LNN, not LTIA

Whether it's LNN or expatriate they are both long term international assignments. But I would be shocked if the 100% PIR for favorable for you. I think that's gonna the biggest shock for you.

The questions that you ask are covered on hronline then search IM -tax policy for local non-nationals

mmm, no, they aren't treated the same way from a tax point of view. LTIA is tax equalized and supported by the company, LNN is not. you're on your own with LNN.

the only thing the company provides (requires) is tax preparation, and only the first and last years.

the PIR, well, that could be a totally different factor too yes. i haven't even looked into that yet.

sts7049 said:

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mmm, no, they aren't treated the same way from a tax point of view. LTIA is tax equalized and supported by the company, LNN is not. you're on your own with LNN.

the only thing the company provides (requires) is tax preparation, and only the first and last years.

the PIR, well, that could be a totally different factor too yes. i haven't even looked into that yet.

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A few years ago I was seriously considering LNN in Singapore and even with their lower tax than UK, I wasn't really getting any bump in salary. That being said, that was personal research and a quick talk with a CPA friend so very well could be inaccurate but I think the role needs to be really good for your career as monetarily I'm not sure you'll come out ahead

Not sure how helpful I can be, but I have quite a few years as expat in the UK.

My company provides tax equalisation and all the services that come with that from Deloitte, both US and UK. It is crazy complicated and glad I just put the inputs in and let them handle it. They're actually very good when it comes to weird stuff like tax audits and all other kinds of things handling all that hassle. I have contacts that cover taxes in both countries if you need them.

I get paid in USD into a USD account and transfer into a GBP account. HSBC is best for this. I can provide more detail if needed but the system takes awhile to get used to.

My understanding is there's some timing effects you need to consider but more or less, your tax burden is max of the 2 jurisdictions. As a result of the timing effects, if you do move… I think you should be pretty insistent that your company handles this in year 1 and don't think that's and unreasonable ask.

If this is an internal role and you are talking to about something like this on a localized basis, you've likely got a lot of leverage. US employees are significantly more expensive than UK employees so there's likely a fair amount of wiggle in comp negotiations for you.

One other thing to consider as an aside is if your company is making you an LNN but not doing a full expat treatment is credit scores don't follow you… so expect more cash up front for services and such relative to the US. Loads of expats in the US I've met consider this to be one of the bigger hidden costs when moving.