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 • CROSS-BORDER • 2025 Summary: British buyers of US property face dual-jurisdiction tax exposure — the IRS taxes the US sale, and HMRC taxes the worldwide gain. US Realtors need cross-border planning support to avoid FIRPTA withholding traps, double taxation, and legal liability risks. IRS requires 15% FIRPTA withholding on property sales by non-US persons Buying via an LLC or C-Corp helps shield personal wealth from lawsuits HMRC taxes foreign property income and gains — with treaty relief possible Context: Who This Applies To This guidance is for US-based Realtors representing British clients purchasing or selling US real estate. These clients are typically: UK investors diversifying into Florida, Texas, or Arizona rentals British expats relocating to the US for work or retirement Dual-citizens managing homes in both the UK and US Why Legal Structure Matters In the US, litigation is common. Realtors advising foreign buyers mus...