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Discussion Starter · #1 ·
Hello there,

This is my first time on this forum, in fact just signed up a few minutes ago, so hopefully I'm not breaking any of the community rules with this post. My apologies in advance if it does.

My husband and I are looking to move to the UK and we are wondering what income loss we should expect from the double taxation system that US expatriates are exposed to. Any advice / help is highly appreciated. A little bit about us:

- We currently live in the state of Pennsylvania, USA and each of us is currently earning 120,000 - both in US dollar.
- My expected salary would roughly be 100,000 (am currently in salary negotiation mode) and his would be 82,000 - both in British pound.
- We are looking to rent in London or its immediate suburb, roughly for 500/month - in British pound.

Using a UK income tax rate of 40%, US expatriate tax rate of 25% on amount greater than $95100, and US (only) income tax rate of 28% that we have now, I've came up with a total income loss of $8712 per year (calculations attached). I would appreciate any help confirming / negating this calculation. Feel free to point out if I missed anything or any incorrect calculations - they would be highly appreciated.

We are pretty excited about this moving opportunity, but want to go into it with eyes wide open on the net take-home earnings that we would have. Obviously, at some point, we will need a tax expert to help us file our tax. Thank you in advance again for any help you can render.

Very gratefully yours,
fway
 

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- We are looking to rent in London or its immediate suburb, roughly for 500/month - in British pound.
That's perhaps a little, um, optimistic for London - or anywhere. Unless you're planning to live in a closet.

You could probably afford better on those salaries.
 

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My husband and I are looking to move to the UK and we are wondering what income loss we should expect from the double taxation system that US expatriates are exposed to.
U.S. expatriates are not exposed to "double taxation" -- certainly not in the U.K. anyway. The very worst U.S. expatriates can do is that they pay the higher of the foreign or the U.S. tax rate on each/every dollar of income.

However, to answer your question, in the circumstances you describe you'll almost certainly pay zero U.S. tax. So, excluding tax preparation costs (which hopefully you'll minimize by doing your own and using free or low cost tax preparation software) you'll have zero income loss attributable to U.S. tax.

- We currently live in the state of Pennsylvania, USA and each of us is currently earning 120,000 - both in US dollar.
When you relocate from Pennsylvania to the United Kingdom presumably you'll no longer be a Pennsylvania tax resident, and so your Pennsylvania state income tax will fall to zero (unless you have some income attributable to Pennsylvania, such as rental income from a property there).

Using a UK income tax rate of 40%....
That's too high. You don't start paying that rate of tax until above £42,385 (assuming the standard personal allowance).

But it appears you haven't included U.K. national insurance tax (comparable to U.S. Social Security and Medicare payroll tax). In certain circumstances you can continue contributing only to U.S. Social Security/Medicare even while working in the United Kingdom, but generally you'll start contributing to the U.K. system. Which one? It's one or the other (and you don't get to choose -- the facts choose for you), and you need to take that into account.

US expatriate tax rate of 25% on amount greater than $95100....
Also too high. The Foreign Earned Income Exclusion is $100,800 (tax year 2015) per spouse, and that's above the personal exemptions, standard deductions, etc. Moreover if you think the tax rates are like what you've illustrated then you shouldn't be taking the FEIE anyway. You should be taking the Foreign Tax Credit. (I only recommend running the tax calculation both ways to see which makes better sense, bearing in mind that you might have to "float" the difference and file an amended U.S. return once the U.K. tax bill comes in.)

and US (only) income tax rate of 28% that we have now, I've came up with a total income loss of $8712 per year (calculations attached).
I think your calculation is much too basic, and all it's really saying is that if you reduce your income and increase your rate of tax (U.K.) then you have less take home income. (And also bear in mind the cost of living is likely higher in the U.K., especially when considering the cost of a trip or two to the U.S. to visit family if that applies.)

If I understand your calculation correctly, you've added £500 per month in rent to adjust for the higher rental rates in the U.K. compared with your current situation in order to understand what the bottom numbers would "feel" like. That's probably not a very good way to do it because you're only partially adjusting for cost of living effects.

You're not counting the excess Foreign Tax Credits likely to be accumulated under these set of assumptions.

If you get a couple years of U.K. National Insurance contributions it's likely both of you would qualify for a modest amount of U.K. NI benefit when you retire. (That's thanks to the U.S.-U.K. social security treaty.)

You'll probably want to assess the loss of U.S. tax-advantaged retirement savings vehicles. (Another reason perhaps not to take the Foreign Earned Income Exclusion since it gets at least harder to make U.S. IRA contributions if you take it.) For example, if you're currently contributing to a 401(k) then that goes away presumably.

Medical care works differently in the U.K. (with different costs), though you'll need at least some high quality travel medical insurance for visits to the U.S.

Anyway, it needs a lot of work, but, as I said, it's unlikely any U.S. tax would be owed. However, with these "top line" figures you're going to take a hit. You will have lower take home income and have to make that income work within a higher cost of living area. If you can avoid the cost of a private automobile, though, that'll help you reclaim some of that higher cost of living.
 

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The first place to look is IRS publication 54 for your US tax obligation. Thanks to the US-UK tax treaty you shouldn't be subject to double taxation (i.e. on the same income), but it takes a bit of research to figure out who pays what to which side and how to get it to all turn out right on the tax forms. Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad

One thing to consider is that you EACH get an FEIE if you choose to go that route.

The other potentially major factor is whether you are taking new jobs or making a transfer to the UK. If it's a transfer, you should check with your employer to see if they would be willing to provide tax assistance, at least for the first year or two. The exact nature of your move may also determine whether you'll be eligible for that "hiatus" on UK social charges for the first five years. But normally those sorts of things are sorted out by the employer.

The big complicating factor in moving to the UK is often the difference in the tax years. The UK tax year goes from April 6th to April 5th or something like that, while the US tax year is the calendar year. Some folks get a bit confused trying to adjust for that - but as long as you know ahead of time, you can arrange to keep the appropriate records (mainly, your payslips) in order to tally things up for your US taxes.

And I wouldn't place too much faith in a simple analysis of US tax vs. UK taxes. What you'll find when you're overseas is that you spend your money very differently. Example: how much did you pay in the US last year for medical expenses? You have to count both your insurance premiums plus any and all co-pays. On the NHS, most of that goes away. If either of you has a company car with the new job (not as common as it used to be, but still more common than in the US), there's another whole set of expenses that goes away when you move.
Cheers,
Bev
 

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....Though a U.K. "company car" may be U.S. taxable income. (Whether it's taxed or not, separate question.)
Definitely taxable in the UK - and possibly included under "earned income" for purposes of the FEIE. However, even if it's taxable, the "perks" of having a company car result in a major reduction in your household spending. (At least it certainly did for me!)
Cheers,
Bev
 

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Discussion Starter · #8 ·
This is a respond to Nononymous from Canada & lebesset from UK/France:

We found 678 apartments on rightmove.co.uk and 135 apartments on zoopla.co.uk when using location filter = London and price maximum filter = 500 PCM (per calendar month). We don't know what sort of neighborhoods these apartments are in, but they are spread out all over the city, so we assume we could take our pic. Might even go up on the price a little.

Since the global economic crash in 2007-2008 where one of us had to declare bankruptcy, we have lived within our means, a.k.a: having a mortgage that is supportable by 1 income. This is just a risk mitigation on our part, not being stingy. For our first year in the UK, we likely will have to continue supporting our US house mortgage as my parents (who live with us) find new accommodation and then listing for the house to sell followed by its waiting period. The current mortgage on that house is $1500 plus another $900 for utilities (likely will dome down to $500 after we leave for the UK). We are also still paying the bankruptcy-related debt from '08. We may also have a child in 2016 (planning to).

I noticed that, while criticizing our monthly rental budget, you both didn't offer suggestions to what you think is a reasonable 1 bedroom apartment rent in London. That information would have been more useful.
 

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I don't think Nononymous or lebesset were "criticizing" your rental budget - just giving you a heads up. Residential rentals in and around London tend to be super expensive. I took a quick peek at one of the sources you noted, and two things came to mind:
1. Many (if not most) of the listings in your price range were for "house shares" - which may not be quite what you're looking for. Same goes for "flat shares" included in the selection. These seem to be roommate situations, where you get a bedroom plus use of the common rooms.

2. Not sure if you've been to the UK before or had the opportunity to look at rentals there, but homes here are considerably smaller than what you might expect coming from the US.

You may want to ask your employer for some help in finding a place to live. (It's a standard form of assistance when there's a relocation involved, especially from overseas.) They may not pay for a relocation service, but surely someone in the office would be willing to take you around for a bit of househunting before you make the actual move. Or you can ask where your new co-workers live to get some idea what areas are most appropriate for you.

Whatever you do, don't commit to long-term housing without actually seeing the property and the area in which it's located. If you can't swing a house-hunting trip pre-move, see if your employer will put you up for 3 to 6 weeks on arrival in a suites hotel or something similar to give you the chance to house hunt in person.
Cheers,
Bev
 

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Discussion Starter · #10 ·
Thank you BBCWatcher from USA/Singapore

Thank you BBCWatcher for a thoughtful reply filled with good feedback! You gave us plenty to think about.

... you'll almost certainly pay zero U.S. tax.
Yes, we agree. On the attached analysis yesterday, we outlined $0 US tax because we will fall under the threshold of taxable income for expats (For the 2013/14 tax year, the starting rate of income tax is 20 percent for the first taxable slice of income up to £32,010, 40 percent between £32,011 and £150,000 and 45 percent over £150,000 - per uk.angloinfo.com/money/income-tax/).

... But it appears you haven't included U.K. national insurance tax (comparable to U.S. Social Security and Medicare payroll tax). ... If you get a couple years of U.K. National Insurance contributions it's likely both of you would qualify for a modest amount of U.K. NI benefit when you retire. (That's thanks to the U.S.-U.K. social security treaty.)
Thank you for bringing these items into our attention. We didn't even know this thing exist and don't know yet if we want to retire in the UK. We will incorporate it into our revised calculation.


I think your calculation is much too basic. ... the cost of living is likely higher in the U.K., especially when considering the cost of a trip or two to the U.S. to visit family if that applies.
Agreed, hence the reason posting in this forum to begin with :) We don't know what we don't know, so looking for those who have been there, done that and experts to advise. We are aware that living cost is higher in the UK, and trying our best to trim spending where we can. We are planning to visit US families several times a year, but our companies will pick up the airfare portion (the largest chunks) of the cost if we time these with the business trips that will occur 3-4 times per year.

If I understand your calculation correctly, you've added £500 per month in rent to adjust for the higher rental rates in the U.K. compared with your current situation in order to understand what the bottom numbers would "feel" like. That's probably not a very good way to do it because you're only partially adjusting for cost of living effects. ... ... You should be taking the Foreign Tax Credit. ... You're not counting the excess Foreign Tax Credits likely to be accumulated under these set of assumptions.
You are right. We should add our current mortgage and FTC onto the spreadsheet.

You'll probably want to assess the loss of U.S. tax-advantaged retirement savings vehicles. (Another reason perhaps not to take the Foreign Earned Income Exclusion since it gets at least harder to make U.S. IRA contributions if you take it.) For example, if you're currently contributing to a 401(k) then that goes away presumably.
We don't know yet if we want to come back to the US for our retirement, so we likely will leave our current IRAs where they are and not contribute to them. Do you know what is the equivalent benefit in the UK for 401k if one exist? That will come in handy in my salary negotiation.

you'll need at least some high quality travel medical insurance for visits to the U.S.
Another good tought! We will incorporate this into our spreadsheet.

Anyway, it needs a lot of work ... If you can avoid the cost of a private automobile, though, that'll help you reclaim some of that higher cost of living.
Yes, we started with the very basic spreadsheet as a strawman for others to help build up. Thanks for your good suggestions, we now have plenty to work with!
 

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Discussion Starter · #11 ·
Thanks Bevdeforges from USA/France

The first place to look is IRS publication 54 for your US tax obligation. Thanks to the US-UK tax treaty you shouldn't be subject to double taxation (i.e. on the same income), but it takes a bit of research to figure out who pays what to which side and how to get it to all turn out right on the tax forms. One thing to consider is that you EACH get an FEIE if you choose to go that route.
Thanks Bev! This is very helpful. This move will be our first time working in a different country, so we weren't sure which tax information to rely on. It would be very helpful to pour through IRS publication 54.

you should check with your employer to see if they would be willing to provide tax assistance, at least for the first year or two. The exact nature of your move may also determine whether you'll be eligible for that "hiatus" on UK social charges for the first five years. But normally those sorts of things are sorted out by the employer.
Good to know! This is very helpful, especially with my ongoing salary negotiation.

The big complicating factor in moving to the UK is often the difference in the tax years. The UK tax year goes from April 6th to April 5th or something like that, while the US tax year is the calendar year. Some folks get a bit confused trying to adjust for that - but as long as you know ahead of time, you can arrange to keep the appropriate records (mainly, your payslips) in order to tally things up for your US taxes.
Awesome info! Will keep this in mind as we live there.

And I wouldn't place too much faith in a simple analysis of US tax vs. UK taxes. What you'll find when you're overseas is that you spend your money very differently. Example: how much did you pay in the US last year for medical expenses? You have to count both your insurance premiums plus any and all co-pays. On the NHS, most of that goes away.
Excellent notion. We forgot about medical expenses. Definitely something to add to the spreadsheet.

If either of you has a company car with the new job (not as common as it used to be, but still more common than in the US), there's another whole set of expenses that goes away when you move.
We likely won't get a company car, but will rely heavily on public transportation. Currently we are estimating that the public transportation cost will roughly be equal to what we spend on gas & car insurance in the US. Might not be the most exact calculation, will need more research into this aspect of living cost. Good thought though Bev, you also gave us plenty to think about - merci!
 

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Discussion Starter · #12 ·
Thanks again Bev!

I don't think Nononymous or lebesset were "criticizing" your rental budget - just giving you a heads up.
In other forums that I've participated in before, it is considered courteous to offer explanation why or alternatives when disagreeing with someone. Very much like what you have Bev with your latest reply to this thread - it is what I welcome & appreciate receiving as a new member to this forum. Simply disagreeing doesn't tell me why I should agree with the other person.

Residential rentals in and around London tend to be super expensive. I took a quick peek at one of the sources you noted, and two things came to mind:
1. Many (if not most) of the listings in your price range were for "house shares" - which may not be quite what you're looking for. Same goes for "flat shares" included in the selection. These seem to be roommate situations, where you get a bedroom plus use of the common rooms.
Yes, we are okay with this. Until we have a child (and there is no guarantee yet that we'll have one), we see this as a good way to trim spending. Especially during our first year, when there are costs on both the US and UK sides.

2. Not sure if you've been to the UK before or had the opportunity to look at rentals there, but homes here are considerably smaller than what you might expect coming from the US.
Yes, we have heard. Definitely something to think about :)

You may want to ask your employer for some help in finding a place to live. (It's a standard form of assistance when there's a relocation involved, especially from overseas.) They may not pay for a relocation service, but surely someone in the office would be willing to take you around for a bit of househunting before you make the actual move. Or you can ask where your new co-workers live to get some idea what areas are most appropriate for you.

Whatever you do, don't commit to long-term housing without actually seeing the property and the area in which it's located. If you can't swing a house-hunting trip pre-move, see if your employer will put you up for 3 to 6 weeks on arrival in a suites hotel or something similar to give you the chance to house hunt in person.
Awesome suggestions! We will definitely try for these tips. Please keep these good thoughts coming! Merci beaucoup Bev!
 

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One other thing to note here: the British sense of humor can seem (at first anyhow) to be a bit "abrasive" (or even at times, "abusive"). And maybe it's not just the Brits, but Europeans in general.

It's just one of the many cultural differences you'll find in your big adventure of moving overseas. (And the only reason I bring it up here is that I went through the same adjustment the first time I lived overseas - in the UK, as it turns out.) You have to develop a thick skin, as there is a tendency to take what may be intended as good natured "teasing" as personal criticism. And, just for the record, as the foreigner in the crowd, you may now and then wind up giving offense without meaning to (though most folks will cut you lots of slack because you ARE a foreigner).

You may want to get one or more books about "Living and Working in the UK" - just check Amazon for several titles like this, but lots of folks recommend the books from the series "by David Hampshire." (Full disclosure here - I've done some work for the publisher, so am most familiar with that series.)

You may also want to post some of your non-tax related questions and concerns over in the British section of the forum: Britain Expat Forum for Expats Living in the UK - Expat Forum For People Moving Overseas And Living Abroad
Cheers,
Bev
 

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Oops, one further thought on the tax side of things.

We don't know yet if we want to come back to the US for our retirement, so we likely will leave our current IRAs where they are and not contribute to them. Do you know what is the equivalent benefit in the UK for 401k if one exist? That will come in handy in my salary negotiation.
Don't get hung up at this point about where you may or may not want to retire. Leave the IRA where it is. Even if you retire overseas, it will be there waiting for you and can be a rather nice nest egg to have in any event. Also, as long as you've put in your 10 years in the US Social Security system, you'll be eligible for your US SS benefits. (Assuming they don't gut the system sometime down the line.)

Be careful, however, about British (or other foreign) self-saving deferred tax retirement plans. You'll have to pay into the national retirement system, and if there's a "social security" agreement between the US and UK (I think there is), you'll be able to get both your US Social Security and whatever UK national pension you qualify for. (It's a bit complicated to explain briefly here.)

However, the "defined contributions" types of plans can cause all sorts of US tax complications - as well as additional reporting requirements to the US, because you're deemed to have an interest in a PFIC or "foreign trust" or some other such "sneaky" sort of investment that draws the attention of the IRS. There is plenty of discussion regarding the issue here on the Expat Tax section of the forum - or if you're brave, take a look at the websites of the two big US Expat organizations, AARO and/or ACA, for the political angles on the question. Indeed on any sort of "foreign" investments you may make while living overseas... there are lots of opinions about how you're supposed to report them on your US tax returns, but little to no clear, concise and specific information forthcoming from the IRS.
Cheers,
Bev
 

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In other forums that I've participated in before, it is considered courteous to offer explanation why or alternatives when disagreeing with someone. Very much like what you have Bev with your latest reply to this thread - it is what I welcome & appreciate receiving as a new member to this forum. Simply disagreeing doesn't tell me why I should agree with the other person.
Given London's reputation, that figure seemed insanely low (500 quid/month would barely rent our tiny basement suite in the middle of the Canadian prairies). I actually thought you were mixing up weekly with monthly rents - which is how flats are typically advertized in the UK - as four times that amount probably gets you a reasonable flat somewhere central.

On edit: I was bored and checked. I stand partially corrected. Some things are what you'd expect for that price - dingy bedroom in a shared house miles from a tube station - and some leave me scratching my head - 400/month for a small but modern furnished place in a newish tower on Canary Wharf? - and wondering if there's a catch.
 

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I've had a look at the spreadsheets, so some additional comments to those above.

As mentioned above, your estimates of UK tax are too high. Each person is taxed individually in the UK, so no joint filing, but on a salary of £100,000, the first £10,600 is tax free; the next £32,000+ is taxed at 20%; and the remainder is taxed at 40%.

IF you are being transferred by a US company to work for them in the UK, then the US/UK Totalisation Agreement would allow you to continue contributing to US Social Security for a maximum of 5 years without paying into the UK NIC as mentioned above. BUT, it requires some legwork by both you and the company.

Additional thoughts:

Council Tax - Unlike the US, there is no property tax in the US sense. There is the local Council Tax which is paid by the occupier of the property. The rate varies according to which local Council you live in, and there are many different Councils. Search for the rates on the local Councils web site where you will be living.

TV License - Yes, in order to watch anything from TV, even on a laptop, you must pay for a yearly license.
 

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This is a respond to Nononymous from Canada & lebesset from UK/France:

We found 678 apartments on rightmove.co.uk and 135 apartments on zoopla.co.uk when using location filter = London and price maximum filter = 500 PCM (per calendar month). We don't know what sort of neighborhoods these apartments are in, but they are spread out all over the city, so we assume we could take our pic. Might even go up on the price a little.

Since the global economic crash in 2007-2008 where one of us had to declare bankruptcy, we have lived within our means, a.k.a: having a mortgage that is supportable by 1 income. This is just a risk mitigation on our part, not being stingy. For our first year in the UK, we likely will have to continue supporting our US house mortgage as my parents (who live with us) find new accommodation and then listing for the house to sell followed by its waiting period. The current mortgage on that house is $1500 plus another $900 for utilities (likely will dome down to $500 after we leave for the UK). We are also still paying the bankruptcy-related debt from '08. We may also have a child in 2016 (planning to).

I noticed that, while criticizing our monthly rental budget, you both didn't offer suggestions to what you think is a reasonable 1 bedroom apartment rent in London. That information would have been more useful.
sorry you took my information as a criticism , it was merely a statement of fact

you didn't say what you expected to rent but , as an example , a young person of my acquaintance lives half an hour by bus from the centre , not in a fashionable area but not a slum either , and pays £1500/ month for a half share in a 2 bedroom flat ...of course for 2 people it would be more
that's about half of her net income , not unusual in london which is why there will be often 4 people sharing such an apartment
would have been useful if you had said whereabouts in london you will be working
 

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On edit: I was bored and checked. I stand partially corrected. Some things are what you'd expect for that price - dingy bedroom in a shared house miles from a tube station - and some leave me scratching my head - 400/month for a small but modern furnished place in a newish tower on Canary Wharf? - and wondering if there's a catch.
I saw the listing you referred to and suspect it's either a misprint or an ad to sucker someone into phoning that realtor. Realtors charge a non-refundable fee in London to do a background search on applicants for properties, so any serious enquiry is money in the bank to them.

I live well away from London (100 miles) and the cheapest 1 bedroom flat in my area rents for £595/month (US$940) on RightMove. Entry is from an alley, but there appears to be no rising damp!
 

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I saw the listing you referred to and suspect it's either a misprint or an ad to sucker someone into phoning that realtor. Realtors charge a non-refundable fee in London to do a background search on applicants for properties, so any serious enquiry is money in the bank to them.
I figured that had to be a scam.
 

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As Bev alluded to U.K. national pension benefits, like U.S. Social Security retirement benefits, are collectible practically anywhere in the world you retire. Unlike the U.S., however, the U.K. has a nasty provision that eliminates cost of living adjustments from benefits (though not if you retire in the U.S. or in much of Europe, as examples).

What I was referring to in loss of 401(k) and (potentially, if you're not careful) IRA benefits is that your future contributions will be limited (presumably) and thus you lose much or all of the value of those U.S. tax advantages. No, you cannot replace a U.S. tax-advantaged account with a U.K. tax-advantaged account. The U.S. will not recognize U.K. tax advantages, and you're subject to U.S. income taxes. (And in general it's best that you avoid saving in the U.K. beyond an ordinary bank balance. Stick to using the U.S. as your savings/investment base unless you really know what you're doing, and probably not even then.) So you have to factor in the loss of 401(k) tax benefits (for example) as a pure loss, and you have to save more to compensate for the loss of that tax deferral (pre-tax contributions) or elimination of tax from gains (Roth after-tax contributions) -- though bearing in mind that if you retire to a country that doesn't recognize Roth 401(k)s and Roth IRAs (most countries don't) then that particular U.S. tax advantage isn't going to survive the foreign tax system if you withdraw overseas.

Anyway, it's a bit complicated to value (in net present value terms), but there's no question that you lose something if you can no longer contribute to a 401(k). You may still be able to contribute to an IRA, but you have to be a little more careful about how you do that if you move overseas. (if you take the FEIE it's at least less likely you can contribute to an IRA, but I'm betting your simulated tax calculation will argue against taking the FEIE when/if the time comes.)

Note that you should aim to max out your 401(k) contributions for the year before you go. For example, if you leave in March, 2016, then (if you can) try to contribute up to the full year limit using January and February payroll. Then do the opposite when you come back. If you do that then on a two year stint overseas you might only miss one year of 401(k) contributions instead of two years.

There are likely differences in disability and life insurance coverages that you'll probably need to value. If you spend "too much" time outside U.S. Social Security (a couple years) you lose that disability coverage, and any employer-provided or employer-subsidized supplemental coverage presumably disappears right away. To restore/maintain that combined level of coverage (just before you leave) it costs money, though you can inquire about whether it's possible to maintain coverage privately with your employer's carrier. (You can avoid medical exams and such with continuity of coverage.) Substitutes in the U.K. are imperfect and usually less generous, and you also should make sure disability benefits are collectible without undue geographic restrictions.

Note that employer-provided life insurance with a death benefit in excess of $50,000 is considered U.S. taxable income for the premium value associated with the benefit above that amount. For example, if your employer provides $100,000 of life insurance coverage free of charge then take half of whatever the employer pays as a premium (per employee at their group rate) and report that as income on the U.S. side. U.S. employers include that imputed income in W-2 reports, but obviously foreign employers don't issue W-2s. Travel accident insurance (for example), in any amount, and other "joke" insurance coverages are not considered income. Or, if you don't need the life insurance above $50K, just put a letter on file with your employer's life insurance company directing that life insurance benefits in excess of the tax free limit be sent to any U.S. 501(c)3 charity that you name. That can include the U.S. office of Doctors without Borders, as an example.

All savings you plan to accumulate should probably be deflated to adjust for currency risk and currency conversion costs, assuming you're likely to return to the U.S. (at least for visits). How you value that is up to you, but zero is probably the wrong answer. As always, seeks to minimize financial transaction costs and don't convert currency unless and until you need it (in general).
 
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