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US/UK Tax Treaty – Minimising Double Taxation

Both the US and UK rules allow credit for taxes paid to other countries and there is also a treaty between the US and the UK designed to reduce double taxation.

However, there are limitations imposed by both countries and because of differences in the two systems it is possible to suffer double taxation. Proper planning can reduce this exposure.  Whilst the UK and US have a Tax Treaty designed to reduce any double taxation and the US does give a credit for UK taxes, you may require advice on how to best use those credits.

The US will give credit for foreign taxes paid, however, they will only give credit against income up to the amount of taxes you would pay for US tax purposes.  The excess Foreign Tax Credits have restrictions for use in future periods.  We can help you maximise the use of these excess credits.

Did you Know?

  • Fact Seven

    Thanks to FATCA banks must disclose their American account holders to the IRS or local tax authority.
  • Fact Six

    The IRS is actively looking for non compliant US persons.
  • Fact Five

    It takes an average of 16 hours to do IRS Form 1040.
  • Fact Four

    There are over 500 IRS tax forms.
  • Fact Three

    Since 1916, illegal income has been taxable.
  • Fact Two

    US persons must file tax
    returns no matter where they live and work.
  • Text One

    7 million Americans abroad
    only 500,000 compliant