For nearly 20 years, our tax firm, Parent & Parent LLP, as been offering the highest level of protection & the highest quality tax service for our clients in the UK or with investments in the UK and elsewhere around the world. Our expert team of accountants, CPAs, attorneys, and enrolled agents all work in concert to put our minds at ease.
There is no issue that is too complicated for us.
We specialize in IRS international tax preparation for individuals and their businesses, and are familiar with UK investments schemes.
Our work is of such a high quality, we offer audit protection at no additional cost. Yet, our fees are reasonable.
Our clients are:
- Global entrepreneurs
- International investors
- Shareholders of closely-held corporations
- US expatriates
- Diplomats and other governmental employees
- Recent immigrants to the US, including Green Card and Visa holders
- Non-residents aliens (NRA) doing business in the US
- Those facing a difficult tax audit or controversy
We also assist tax professionals, Enrolled Agents, CPAs, attorneys, in-house tax and accounting teams in the UK put at their minds at ease with our knowledge base and abilities.
Looking for a quote on our services?
For an estimate of our fees, simply send an email with as much detail as you can to estimates@irsmedic.com. You can include all your tax concerns. And because the US tax system does not follow a distinct logic process, it is actually impossible to ask a stupid question. So please, feel comfortable to reach out!
The benefits of the US-UK tax treaty
The U.S.-U.K. tax treaty is one of the most beneficial treaties. U.K. resident-citizens who do not have a substantial presence in the U.S. can count themselves as quite lucky under the terms of this treaty. The treaty is also very helpful in that typical UK tax-deferred retirement plans are also tax deferred in the US.
Because the US taxes based on citizenship, not residence, there are many tax traps lurking for UK citizens living in the US, and US persons living in the UK.
Are you a US person living in the United Kingdom?
The US taxes its persons on a worldwide basis. So what you earn in the United Kingdom, even if it is taxed by the UK taxing authority, is subject to additional taxes by the IRS. This is true even if you have a "tax-free" account in the UK. However, you are entitled to a credit for taxes paid. In the alternative, there is a foreign income exclusion which will exempt a portion of your income from income taxes.
Are you a UK person living in the United States? (Visa/Substantial Presence Test)
If you are a Green Card holder you are subject to universal taxing jurisdiction on all your income, anywhere in the world. If you are a visa holder the rules are a bit more complicated about when universal taxing jurisdiction is triggered.
The United States and United Kingdom have different tax years, which can sometimes complicate things.
Foreign Earned Income Exclusion
Citizens and residents living and working in the U.K. may be entitled to a foreign earned income exclusion that reduces taxable income. In addition, you may exclude housing expenses, but with limits. There are limits and special rules about who qualifies for the exclusion.
Foreign Tax Credits
This is a non-refundable tax credit for income taxes paid to the HMRC. The foreign tax credit is available to anyone who either worked in a foreign country or has investment income from a foreign source. There are qualifying factors, and we can help you understand if you are eligible to tax advantage of this credit.
Additional Treaty Information
The US has a tax treaty with the United Kingdom. Under tax treaties, residents (not necessarily citizens) of foreign countries are taxed at a reduced rate, or are exempt from U.S. taxes on certain items of income they receive from sources within the United States. These reduced rates and exemptions vary among countries and specific items of income. Under these same treaties, residents or citizens of the United States are taxed at a reduced rate, or are exempt from foreign taxes, on certain items of income they receive from sources within foreign countries. Most income tax treaties contain what is known as a "saving clause" which prevents a citizen or resident of the United States from using the provisions of a tax treaty in order to avoid taxation of U.S. source income.
UK specific tax issues
Based on our experience, we find that there are many complicated aspects of treatment of different types of accounts in the UK. For instance:
- Private pensions have different reporting requirements than public pensions.
- Only certain companies can provide qualified life insurance policies.
- Individual Savings Accounts (ISAs) can create foreign trust issues as they are taxed annually in the U.S.
- Treaty benefits and totalization benefits have specific reporting requirements.
- The calendar year must be used to calculate US taxes; not the UK tax year. Duplicative work is required.
- It is very common for our clients in the UK to have non-UK financial accounts. Understanding other countries treaties that might be involved is critical.
- Our US-UK clients tend to be extremely mobile, creating additional tax complications.
If you need assistance with any of these issues, contact us to schedule a consultation at 888-727-8796 or email info@irsmedic.com.
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