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I am considering a move to London in January. My company is an American Company opening an office in London although they would pay be in US dollars.

I would be relocating for close to a year.
Would I be taxed in both London and US. I would want to sub-let my NYC apartment and the taxes are very very high. If I had to pay taxes in both places I would have to see if this is realistic.

Anyone have any idea how this works?

Also, looking into a relocation service and negotiating my cost of living is it realistic to find a 1 bedroom apartment near central london for under 1300 pounds?

Thank you!
 

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There is a tax treaty between the US and the UK which should eliminate most (if not all) instances of dual taxation. However, you are taxed based on where you are performing your job, regardless of the headquarters of your employer or what currency they are paying you in.

Normally, you pay tax to the country in which you are resident. Your employer should be the one to secure you a work visa if they are opening an office in London. Your rental income on your NY apartment would normally be subject to tax by the US.

But, as a US citizen living abroad, you ALWAYS have to file US taxes, declaring your worldwide income, and then taking advantage of the overseas earned income exclusion (form 2555) and any foreign income tax credits (form 1116) as applicable.

UK taxes apply to your earned income (i.e. salary) and to any other UK source income you might have while you're resident in the UK.
Cheers,
Bev
 

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Discussion Starter #3
There is a tax treaty between the US and the UK which should eliminate most (if not all) instances of dual taxation. However, you are taxed based on where you are performing your job, regardless of the headquarters of your employer or what currency they are paying you in.

Normally, you pay tax to the country in which you are resident. Your employer should be the one to secure you a work visa if they are opening an office in London. Your rental income on your NY apartment would normally be subject to tax by the US.

But, as a US citizen living abroad, you ALWAYS have to file US taxes, declaring your worldwide income, and then taking advantage of the overseas earned income exclusion (form 2555) and any foreign income tax credits (form 1116) as applicable.

UK taxes apply to your earned income (i.e. salary) and to any other UK source income you might have while you're resident in the UK.
Cheers,
Bev
Would this mean I would file only if was being paid in the British Pound. I am pretty sure my pay would go directly to my US account in US dollars. It would be more of an office setting there and we would charge clients in lbs and the company would pay me in dollars!

Either way thank you it was helpful!
 

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Would this mean I would file only if was being paid in the British Pound. I am pretty sure my pay would go directly to my US account in US dollars. It would be more of an office setting there and we would charge clients in lbs and the company would pay me in dollars!

Either way thank you it was helpful!
According to UK tax laws, since you are resident in UK for tax purpose and you are performing your duty in UK, you are subject to UK tax no matter how you are paid and in which currency. There are various ways in which to do this, such as completing self-assessment tax return, your employer operating PAYE and taking off tax at source or through a witholding tax taken by your employer before crediting your US account and paid over to HMRC (UK version of IRS). If it's the third option, you can make your own UK tax return and claim back the excess if witholding tax is more than the tax due under current income tax rules.
 

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Would this mean I would file only if was being paid in the British Pound. I am pretty sure my pay would go directly to my US account in US dollars. It would be more of an office setting there and we would charge clients in lbs and the company would pay me in dollars!

Either way thank you it was helpful!
Where and how you are paid, and in what currency has NO bearing on where you are taxed. Where you are resident while doing your job is the determining feature. You will need a visa with work privileges to operate as you've described and you will be subject to UK taxes on your salary, no matter where it is paid into your bank account.

You will also have to file your US taxes as usual, though your salary income can be "excluded" via form 2555 while you are resident overseas. Go to the IRS website and download Publication 54 for details.
Cheers,
Bev
 
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