New law makes figuring out interaction between US & UK taxes a pain. | AccountingWEB

New law makes figuring out interaction between US & UK taxes a pain.

By Liz Zitzow - Whoa! What a week it's been. And it's only Tuesday.

Yesterday, I met with nearly 40 other dual US/UK tax preparers, lawyers, and other interested parties to discuss a nasty new UK tax law that will affect any American or greencard holder who's been living in the UK for more than seven years.

Currently, a "nondomiciled" person resident in the UK pays tax only on UK source income. Most Americans living in the UK are considered "nondoms". The US/UK tax treaty was signed and arranged with this fact in mind.

The proposed new law would require that any "nondomciiled" person resident in the UK for more than seven years must either pay a £30,000 flat fee or else pay tax on their worldwide income. The question is whether opting to pay the £30,000 would constitute a tax for purposes on the treaty. If they opt to pay tax on their worldwide income, as it is an optional income tax (they could opt to pay the £30,000 instead), is this an allowable tax under treaty? Also in question is how this £30,000 would flow through as a tax credit, if at all, to the US return. Well, there were a lot of swings and roundabouts, no conclusions, and a general feeling that they're gonna get you no matter which way you turn.

This is a very gray area, with no precedents yet. Most people earning a typical middle class income aren't going to want to pay to have a revenue ruling on the situation. We're going to have to make an educated best guess (unhappily, slapped with our new requirement to be more likely than not) as to what the IRS may or may not do with taxpayers facing this new UK tax.

Today, I met with five prospective clients and got them to sign on the dotted line for work to be prepared in January. I have yet to crack open a file and crunch any numbers.

Luckily tonight, the hubby isn't coming home for dindins, so that's another three hours of pure number-crunching. And tomorrow's clear of appointments, so that's a good solid eight hours to crunch as well.

My 17 Dec deadline is looming. 17 Dec is my 15 Apr. Overseas filers have until 15 Dec, rather than 15 Oct. And 15 Dec is a Saturday, giving me until Monday 17 Dec. Depending on how many last-minute people finally swing their stuff at me, I'm either going to be totally exhausted or completely wiped out by the 17th. I don't think "relaxed and sipping a chilled wine" is in the cards this year, at least not until I get on the plane at 6 pm and head for the states for the holidays.

Bloggers crew

Steve Knowles has spent 25 years in business and practice in the UK, but he also worked in the states and the years haven't dulled his way of seeing an alternative view to everyone else, and every day is a new adventure.


Joel M. Ungar, CPA is a lifelong resident of the Detroit area and a graduate of The University of Michigan. He is a principal with Silberstein Ungar, PLLC, a Top 15 auditor of SEC public reporting companies.


Allan Boress, CPA, with over 25 years as a practitioner and consultant to the accounting profession. Mr. Boress is the author of 12 published books in 6 different languages, including a best-seller, The "I-Hate-Selling" Book.


Larry Perry, CPA, CPA Firm Support Services, LLC, is the author of accounting and auditing manuals, author and presenter of live staff training seminars, and author of webcast and self-study CPE programs. He blogs about small audits, reviews, and compilations.

Sandra Wiley, COO and Shareholder, is ranked by Accounting Today as one of the 100 Most Influential People in Accounting as a result of her prominent role as an industry expert on HR and training as well as influence as a management and planning consultant. She is also a founding member of The CPA Consultant's Alliance. Sandra is a certified Kolbe™ trainer who advises firms on building balanced teams, managing employee conflict and hiring staff.

Maria Calabrese, CIR, Human Resources manager for Fazio, Mannuzza, Roche, Tankel, LaPilusa, LLC in Cranford, New Jersey, Maria's topics revolve around the world of: Mentoring, Performance management, and The "Y Generation," a.k.a. "The whY generation".


William Brighenti is a CPA, Certified QuickBooks ProAdvisor, and Certified [Business] Valuation Analyst, operating an accounting, tax, and QuickBooks consulting firm in Hartford, Connecticut, Accountants CPA Hartford.


Ken Garen, CPA, is the co-founder and President of Universal Business Computing Company (, a software development firm of high-volume, high-productivity accounting and payroll technology.


Eva Rosenberg, MBA, EA, is the publisher of, and author of the weekly syndicated Ask TaxMama column. She provides answers to tax questions from taxpayers and tax professionals worldwide.


Amy Vetter, CPA, CITP is the CPA Programs Leader for Intacct Corporation responsible for leading the CPA/BPO Partners nationally.

Brian Strahle is the owner of LEVERAGE SALT, LLC where he provides state and local tax technical services to accounting firms, law firms and tax research organizations across the United States. He also writes a weekly column in Tax Analysts State tax Notes entitled, "The SALT Effect." For more info, visit his website:
Scott H. Cytron, ABC, is president of Cytron and Company, known for helping companies and organizations improve their bottom line through a hybrid of strategic public relations, communications, marketing programs and top-notch client service. An accredited consultant, Scott works with companies, organizations and individuals in professional services (accounting, finance, medical, legal, engineering), high-tech and B2B/B2C product/service sales.

Rita Keller is a nationally known CPA firm management consultant, speaker, author, mentor and blogger. She has over 30 years hands-on experience in CPA firm management, marketing, technology and administrative operations.

Stacy Kildal is the mom of two fantastic kids, an Advanced Certified QuickBooks ProAdvisor, Certified Enterprise Solutions ProAdvisor, Sleeter Group Certified Consultant, a nationally recognized member of the Intuit Trainer and Writer Network, and co-host of RadioFree QuickBooks.
Michael Alter's blog specializes in providing practical advice to those who seek greater profitability and practice management tactics that enhance deeper client relationships.

Sally Glick, CMO, Principal, Marketer of the Year in 2003 and AAM Hall of Famer in 2007, leads a lively discussion of the constantly expanding roles of marketing and the professional marketers that drive this initiative in accounting firms of all sizes.


The IMA Young Professionals Blog features the insights of IMA’s Young Professionals Committee. Committee members share advice and experiences on careers, continuing education, work/life balance, and other issues affecting young accounting and finance professionals.


FEI Financial Reporting Blog provides highlights from SEC, PCAOB, FASB, IASB, and other regulatory news, including reporting under Sarbanes-Oxley Sect 404. It is written by Edith Orenstein, Director of Technical Policy Analysis at FEI.


Sue Anderson has 30 years of experience in continuing education for accountants. Currently she is the program director for online CPE provider CPE Link.


Jim Fahey is COO of Apple Growth Partners, a regional CPA firm in Ohio. His focus is on the effective and efficient use of technology within the firm by all team members.

Caleb Newquist is the Editor-in-Chief of Sift Media US, overseeing content for both AccountingWEB and Going Concern.

Leita Hart-Fanta, CPA, CGFM, and CGAP is the author of "The Yellow Book Interpreted" and owner of a website devoted to training for governmental auditors.


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