Forms FT F 90-22.1 and 8938 [US Tax Forms, Living in UK]

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Forms FT F 90-22.1 and 8938 [US Tax Forms, Living in UK]

Postby muiris » Fri Aug 30, 2013 9:15 am

As a US green card holder living in the UK, I submit form 1040NR as I am deemed UK resident under the terms of the US-Uk Tax Treaty.

Am I exempt from submitting forms FT F 90-22.1 and 8933?
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Re: Forms FT F 90-22.1 and 8938 [US Tax Forms, Living in UK]

Postby nun » Fri Aug 30, 2013 10:40 am

If you hold a green card you are US tax resident. You should be filing a 1040. The fact that you live in the UK does not change your US tax residency status as long as you have the green card. Therefore, you must continue to comply with all the regulations for a US tax resident and file FBAR and 8938 if your foreign financial accounts exceed the relevant thresholds.
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Re: Forms FT F 90-22.1 and 8938 [US Tax Forms, Living in UK]

Postby TedSwippet » Fri Aug 30, 2013 11:31 am

muiris wrote:As a US green card holder living in the UK, I submit form 1040NR...

Really? Filing as a non-resident is one way to (inadvertently) lose your green card. (And yes, you are non-resident in the US according to every sensible definition except that of US tax law, which defines words to mean what it says they mean, no more and no less, and often differently to what everyone else thinks they might mean.)

http://www.taxanalysts.com/www/features.nsf/Articles/95F66D36BB745FD6852579C700800842?OpenDocument

"... an LPR may lose status inadvertently, such as in a leading case on U.S. tax residency, Matter of Guiot, which held that an LPR who claims U.S. tax nonresidency status for federal income tax purposes (by filing no income tax return at all or by filing a return as a U.S. tax nonresident) may be deemed to have abandoned the green card. Although tax treaty provisions may supersede federal tax law, USCIS may determine that an LPR who has set up residence in another country, elects U.S. tax nonresident status under a treaty tiebreaker rule, and submits a Form 1040NR or 1040NR-EZ with Form 8833 for the nonresidency claim under the treaty, has abandoned his U.S. permanent resident status (which will result, in turn, in an official finding)."
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Re: Forms FT F 90-22.1 and 8938 [US Tax Forms, Living in UK]

Postby muiris » Sat Aug 31, 2013 6:03 am

I am allowed to submit a form 1040NR by making an election of Uk residence for the tax year via form 8833. I believe this should exempt me from submitting the subject forms.
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Re: Forms FT F 90-22.1 and 8938 [US Tax Forms, Living in UK]

Postby muiris » Sat Aug 31, 2013 6:08 am

I will continue to submit form 1040NR, even if that results in losing my green card. I just want to make sure I have no issue regarding forms FT F 90-22.1 and 8938
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Re: Forms FT F 90-22.1 and 8938 [US Tax Forms, Living in UK]

Postby nun » Sat Aug 31, 2013 10:46 am

muiris wrote:I am allowed to submit a form 1040NR by making an election of Uk residence for the tax year via form 8833. I believe this should exempt me from submitting the subject forms.


If you are not a long term permanent resident and file the 8833 and claim UK residency under the tie breaker rules you can be treated as a non-US resident. Therefore, IMHO, FBAR etc would not be required. If you are a LTR I would be careful as 8854 comes into play and the IRS might not accept your NR status.
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Re: Forms FT F 90-22.1 and 8938 [US Tax Forms, Living in UK]

Postby muiris » Sat Aug 31, 2013 12:58 pm

Thanks nun. I checked the 8854 form and it seems I am not an LTR.
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Re: Forms FT F 90-22.1 and 8938 [US Tax Forms, Living in UK]

Postby TedSwippet » Sat Aug 31, 2013 2:23 pm

muiris wrote:I will continue to submit form 1040NR, even if that results in losing my green card. I just want to make sure I have no issue regarding forms FT F 90-22.1 and 8938

http://hodgen.com/form-8938-can-apply-to-nonresident-aliens/

"Becoming a nonresident alien by using the income tax treaty does not make you a nonresident alien for all purposes of U.S. tax compliance. Making the election under an income tax treaty makes you a nonresident alien for the purpose of computing your U.S. income tax liability. But all other provisions of U.S. tax law will continue to apply to you as if you are a U.S. resident... The Form 8938 filing requirement remains intact, and you will have to complete Form 8938."
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Re: Forms FT F 90-22.1 and 8938 [US Tax Forms, Living in UK]

Postby nun » Sat Aug 31, 2013 4:38 pm

Hodgen Law is a great resource! The safest thing would be to remove all assets (outside of retirement accounts) from the US so you don't have to file a US tax return.

8983 for certain NRAs and no FBAR is confirmed by IRS.

http://www.irs.gov/Businesses/Compariso ... quirements

From the 8938 Instructions

http://www.irs.gov/pub/irs-pdf/i8938.pdf

Special rules for resident aliens.
You are a resident alien if you are treated as a resident alien for U.S. tax purposes under the green card test or the substantial presence test. For more information, see Pub. 519, U.S. Tax Guide for Aliens. If you qualify as a resident alien under either rule, you are a specified individual even if you elect to be taxed as a resident of a foreign country under the provisions of a U.S. income tax treaty. If you have to file Form 8938, attach it to your Form 1040NR.
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Re: Forms FT F 90-22.1 and 8938 [US Tax Forms, Living in UK]

Postby TedSwippet » Sat Aug 31, 2013 6:27 pm

nun wrote:The safest thing would be to remove all assets (outside of retirement accounts) from the US ...

Or file I-407 and ditch the green card. At this point it might be mostly (or even entirely) albatross.
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Re: Forms FT F 90-22.1 and 8938 [US Tax Forms, Living in UK]

Postby nun » Sat Aug 31, 2013 7:11 pm

TedSwippet wrote:
nun wrote:The safest thing would be to remove all assets (outside of retirement accounts) from the US ...

Or file I-407 and ditch the green card. At this point it might be mostly (or even entirely) albatross.


maybe remove taxable assets from US AND and file I-407.

As a US/UK dual citizen thinking of moving to the UK I'm seriously considering renouncing US citizenship and moving everything apart from retirement accounts to the UK. Then there's no US tax filing to be done, just W-8BEN.
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Re: Forms FT F 90-22.1 and 8938 [US Tax Forms, Living in UK]

Postby TedSwippet » Sun Sep 01, 2013 4:38 am

nun wrote:As a US/UK dual citizen thinking of moving to the UK I'm seriously considering renouncing US citizenship and moving everything apart from retirement accounts to the UK.

When we discussed this a couple of years ago you mentioned SS payments as a reason for holding on to US citizenship regardless. I'm curious about what changed your view? As an NRA who paid FICA in the past and might see SS payments in future, I'm trying to keep an eye on issues in this area.
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Re: Forms FT F 90-22.1 and 8938 [US Tax Forms, Living in UK]

Postby nun » Sun Sep 01, 2013 7:51 am

TedSwippet wrote:
nun wrote:As a US/UK dual citizen thinking of moving to the UK I'm seriously considering renouncing US citizenship and moving everything apart from retirement accounts to the UK.

When we discussed this a couple of years ago you mentioned SS payments as a reason for holding on to US citizenship regardless. I'm curious about what changed your view? As an NRA who paid FICA in the past and might see SS payments in future, I'm trying to keep an eye on issues in this area.


I was more paranoid back then. There's no move, that I know of, to remove SS from people who expatriate. Expatriating would make my taxes a lot simpler and increase my investment options. Also if my IRA to ROTH rollover strategy works, as a US NRA living in the UK all my retirement money would be tax free.
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Re: Forms FT F 90-22.1 and 8938 [US Tax Forms, Living in UK]

Postby jj » Sun Sep 01, 2013 9:01 am

nun wrote:
I was more paranoid back then. There's no move, that I know of, to remove SS from people who expatriate. Expatriating would make my taxes a lot simpler and increase my investment options. Also if my IRA to ROTH rollover strategy works, as a US NRA living in the UK all my retirement money would be tax free.


You might do well to remain paranoid. It is my understanding that as a non-citizen (i.e. after renouncing citizenship or giving up a green card by virtue of non presence) Social Security benefits will not be paid abroad. They continue to be paid to US citizens who live abroad, in most places. I am scrambling to find a reference for this....

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Re: Forms FT F 90-22.1 and 8938 [US Tax Forms, Living in UK]

Postby TedSwippet » Sun Sep 01, 2013 12:59 pm

nun wrote:Also if my IRA to ROTH rollover strategy works, as a US NRA living in the UK all my retirement money would be tax free.

Feasible. It does however make the US/UK tax treaty do a lot of work, long into the future.

After watching congress back-pedal on its side of these treaties more than once in recent years I am not sure that I would be comfortable depending on this for my retirement. How difficult is it to imagine the next iteration of Ex-PATRIOT containing full-on capital controls for expats as the next brick in the US's fiscal Berlin wall? Maybe you have other resources, so that you are not completely dependent on your IRA or 401k. Or maybe you just like living a little more on the edge than I do...
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Re: Forms FT F 90-22.1 and 8938 [US Tax Forms, Living in UK]

Postby TedSwippet » Sun Sep 01, 2013 1:14 pm

jj wrote:... It is my understanding that as a non-citizen (i.e. after renouncing citizenship or giving up a green card by virtue of non presence) Social Security benefits will not be paid abroad. They continue to be paid to US citizens who live abroad, in most places. I am scrambling to find a reference for this....

This page from the SSA says Social Security benefits are paid to non US-citizens as long as they are in of one of several listed countries. The list includes the UK.
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Re: Forms FT F 90-22.1 and 8938 [US Tax Forms, Living in UK]

Postby nun » Sun Sep 01, 2013 2:24 pm

TedSwippet wrote:
jj wrote:... It is my understanding that as a non-citizen (i.e. after renouncing citizenship or giving up a green card by virtue of non presence) Social Security benefits will not be paid abroad. They continue to be paid to US citizens who live abroad, in most places. I am scrambling to find a reference for this....

This page from the SSA says Social Security benefits are paid to non US-citizens as long as they are in of one of several listed countries. The list includes the UK.


Yes that's why I would contemplate expatriation, currently there's no issue with SS benefits. If I expatriate I'll move as much of my capital as I can from the US to the UK. I'll then move all my 401k, IRA etc to my ROTH at once; assuming there are no tax consequences I can move everything in a single tax year and not bother with tax brackets. I'm 52 so in 7.5 years I'd be able to take all the money from the ROTH tax and penalty fee and move it to the UK although I'd let it grow tax free in the US until it looked like Congress was going to change the rules on me.
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