Tax considerations before you move to the USA
As any purchase you make will affect your worldwide estate, you need to make sure your tax status is correct when you move to, or buy in the USA.
It’s important to get a grasp of your new tax liabilities to ensure you avoid paying additional taxes unnecessarily. This is of particular importance if you plan on relocating to the USA permanently.
We highly recommend you consult an Independent Financial Advisor (IFA). They will be able to ensure all financial elements of your move, or purchase, are dealt with.
It’s important to get a grasp of your new tax liabilities to ensure you avoid paying additional taxes unnecessarily.
Tax considerations to take into account prior to your move include:
- How and when to notify HMRC about your plans to leave the UK. This is essential for those moving permanently, and could result in a tax rebate.
- What are the tax implications of your move to the USA? This is especially important if you will continue to earn an income in the UK, or if you plan on keeping UK property to let out for rental income.
- Will you benefit from continuing National Insurance Contributions when you move, and how will this affect your state pension from the UK?
- Are your existing life assurance and savings policies in the UK still valid, and will they cover your time in the US?
- What should you do with the investments you have in the UK? Do they remain your best options, or would there be benefits to moving them?
- Is it still possible to make payments in to your UK pension, and will you remain eligible for tax relief or accumulated pension rights?
- How should you manage any large cash balances you hold in the UK? Should you transfer them, or move them offshore?
- Where will you be considered ‘resident’?
- What is required of you in terms of tax returns in the UK, and in the USA, and when will you need to submit them? There are considerable fines levied for late submissions.
- How do inheritance laws differ in the USA? What do you need to do to ensure your estate and your will are protected?
Speak to an Independent financial advisor (IFA) to ensure all elements are covered in advance of your move to, or your purchase in, the USA.
How do currency exchange rates effect your income in the USA?
If you’re planning on relying on pensions and investments as your main source of income whilst spending time in the United States, at some stage you will need to transfer money into a US account to cover you. It’s important to understand just how greatly currency exchange fluctuations can impact upon the balances you’re transferring.
It’s important to understand just how greatly currency exchange fluctuations can impact upon the balances you’re transferring.
We recommend seeking the services of a currency exchange specialist, such as our trusted partners, Smart Currency Exchange. You’ll be assigned an experienced trader who will keep you up-to-date with currency market movements, and who can lock in exchange rates on all of your regular transfers for up to a year, allowing you to budget effectively. Contact the USA Property Guide team on 020 7898 0549 to be put in touch today, or request a quote.