By Liz Zitzow - Well, howdy y’all, from across the pond.
I was born a New Englander, from a long, long line of Yankee citizens on my mother’s side. I moved to the UK on a whim. I was job hunting at the time, and the only limit I put on my Monster.com search was English as the primary language. When an opening came up that screamed my name, I thought it was amazing that anyone in London needed a full-time tax accountant! Of course, I applied. That was some eight or nine years ago. Now I have my own specialist boutique tax practice, handling complex individual tax filings for American citizens living abroad. My typical client is a banker, or owns his or her own company, or perhaps has a substantial trust fund.
We’re all quite well aware that over here we say “lift” instead of “elevator”. And anyone who’s spent some time here knows that there’s a bunch of other confusing words over here. Just watch the reactions you get when you say “Fanny Farmer Cookbook”.
It should therefore come as no surprise to find out that words we use every day, like “income” and “capital gains”, have subtly different meanings as well. In the US, when we say “income”, we generally also mean to include as a subset the category of income known as “capital gains”. In the United Kingdom, the two concepts are considered utterly separate. If you ask for a British client’s income from their UK tax accountant, you’ll get their rental income, but you might never find out about the sale of the residential rental property.
Another curious difference is the number of countries that have a different tax year to the US. This can make converting from foreign account reports to US GAAP and IRS regulations even more difficult. When an Australian person is talking about his or her 2006 Australian tax return, that’s a fiscal year end of 30 June 2006. The United Kingdom is even odder with an end date of 5 April 2006.
In the months to come, I’ll be mouthing off about how poorly conceived tax laws harm innocent people. I’ll answer your tough questions on multinational issues. And I’ll let you in on my secrets to running a successful tax practice.