US Year End Planning – Things to Consider

If a taxpayer claims foreign tax credits on the ‘paid’ basis in the US, it may be necessary to accelerate UK/Foreign tax payments into the same calendar year as the income is reported. This will ensure that the income is aligned with the foreign tax credit in the same calendar year to avoid a situation whereby income and foreign tax credits are reportable in different tax years and tax is paid twice before a delay in reclaiming the US tax, affecting cashflow. In a worst case scenario the gap between income reporting and tax payment reporting exceeds one calendar year, which means no carry back is available (limited to one calendar year) and a genuine double taxation occurs.

Typically Prep payments of non US tax apply to the following:

  • Arising basis (worldwide taxation) taxpayers
  • Partners
  • Self employed
  • Taxpayers with large one off transactions within a tax year, without any withholding at source. (i.e. capital gain or carried interest income)

Under the US/UK double tax treaty generally the country of residence will have the primary taxing rights on income/capital gains (for US citizens), with a foreign tax credit available in the other jurisdiction (the US), however, this does not apply for US dividends, US real estate and potentially for pension payments in certain circumstances.

If in doubt, please reach out, as we can confirm if any year end planning is required and check your current situation versus available foreign tax credits.

gillian has an excellent understanding of international tax matters

Which is absolutely vital for me as I am an EU national residing in the UK.

We were very pleased with the advice that everfair tax gave us

Thank you very much for all your kind help and assistance. We are extremely grateful that they followed on with notes of our telecon.

It was a stroke of good luck when we connected with the kind consultants at everfair tax

They proved to be invaluable as we found our way through a maze of forms pertaining to our particular dual citizenship tax issues, and brought up scenarios it hadn’t even occurred to us to consider.

I’d be happy to serve as a reference for any prospective clients.

Thanks to you and your team for all your efforts, which I greatly appreciate.

Everfair Tax offers a very professional service with extremely helpful staff

All my needs were met by their stellar team. I would be happy to recommend them to friends and family.

The team handling my US return were extremely pleasant

They were professional, helpful, polite, and very responsive. They always got back to me by email or set up a video call to explain matters. I would have no hesitation in recommending Everfair Tax to people I know.

The team at Everfair Tax have been a pleasure to work with

The whole process has been very clear and efficient. I have been confident in recommending their services to my colleagues.

All timelines were met, and all questions were answered punctually

My tax situation was complex, but it was well understood by Everfair Tax. I can see this expertise is borne by strong experience.

Everfair Tax has been outstanding in their services and their client care

Everfair Tax has been quick and efficient in responding to my inquiries, providing me with information, and setting up meetings. They have been helpful and clear in their explanations of tax matters and my particular liabilities.

News

For updates featuring tax changes, reminders for deadlines, pointers on how to maximise your accounts, and information on Everfair Tax and their activities: you need look no further than our news & resources pages.

View More

Contact Us

Need some UK, US or International advice?
Contact us now & we will get back to you as soon as we can

  • This field is for validation purposes and should be left unchanged.

Weybridge Office

No. 5 The Heights, Wellington Way,
Weybridge, Surrey KT13 0NY

Tel: 01932 320 800

London Office

40 Gracechurch Street,
London, EC3V 0BT

Tel: 020 3949 5999
Email: info@everfairtax.co.uk

Find us on