US & UK Tax Articles

US • UK • CROSS-BORDER TAX Summary: Many Americans who set up a UK limited company are told they don’t need to file Form 5471 . That advice is dangerously wrong. The IRS treats most UK companies owned by US persons as Controlled Foreign Corporations (CFCs), triggering Form 5471, Subpart F exposure, and potential GILTI taxation , even when no money is distributed. Form 5471 applies far more often than Americans are told CFC status can create GILTI tax on retained UK profits Penalties apply even if no US tax was owed The Myth Americans Keep Hearing Some accountants claim a UK Limited Company “keeps tax offshore” or “is treated separately so the IRS doesn’t care.” That’s not just wrong, it’s financially dangerous. Under US tax law, Americans are taxed on worldwide income, and foreign corporations they control are subject to mandatory filing obligations. When Form 5471 Applies Form 5471 applies when a US person owns shares, voting rights, or control thresholds in a UK compan...

TAX • RESIDENCY • LEAVING THE UK Summary: Leaving the UK does not automatically end your UK tax exposure. HMRC continues to tax certain income even after departure. Many people wrongly assume that becoming non-resident means paying no UK tax, but the rules are stricter than expected. Split-year treatment does not exempt income earned before departure UK companies may still create UK dividend tax liabilities Rental income and UK situs assets remain taxable in the UK Who This Applies To This guidance applies to individuals who are permanently leaving the United Kingdom, have ended full-time UK residence, or plan to work and live overseas for the foreseeable future. It includes employees, contractors, directors, landlords, shareholders of UK companies, and people with retained property income or investments still situated in the UK. Understanding UK Exit Tax Rules Leaving the UK does not create a formal “exit tax” in name, but HMRC applies a series of ...

  Summary: Moving abroad or coming back to the UK can trigger unexpected tax bills. This guide explains how HMRC decides your residence, what income remains taxable, and how to claim tax refunds when leaving the UK. Learn how the Statutory Residence Test (RDR3) determines your tax status Find out what income stays taxable under UK law after you leave Discover how to claim refunds and avoid HMRC penalties Context: Who This Applies To This guide is for anyone leaving or returning to the United Kingdom — especially landlords, company directors, and digital nomads. Whether you’re retiring abroad, working full-time overseas, or moving back after a few years away, your UK tax position changes the moment your residence status changes. Understanding the Rules The UK tax year runs from 6 April to 5 April . Your UK residence status is determined by HMRC’s Statutory Residence Test (RDR3) , introduced by Finance Act 2013 Schedule 45 . It looks at how many days you spend in the UK...