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U.S.-UK Tax Planning and Traps to Avoid: Reporting Issues, Tax Treaties, Passive Income, Pass-Through Income

Recording of a 90-minute premium CLE/CPE video webinar with Q&A

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Conducted on Thursday, February 10, 2022

Recorded event now available

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This CLE/CPE course will provide tax counsel and advisers with a practical guide into some issues which arise in relation to the tax reporting requirements and planning opportunities for U.S. taxpayers with earnings or assets in the United Kingdom, as well as UK citizens with U.S. tax reporting obligations. The panel will discuss U.S. tax law and treaty provisions designed to avoid or mitigate dual taxation, give an overview of UK residence and domicile rules, and detail the effect of Brexit on treaty benefits.

Description

The U.S. and UK have significant economic and social ties resulting in a constant flow of cross-border business transactions and citizens migrating between the two countries. Tax counsel and advisers must navigate challenges stemming from the interpretation and enforcement of U.S. and UK tax rules to avoid adverse tax liability from either country.

Among the most critical planning challenges for cross-border activities is reconciling the U.S. and UK rules governing residence and domicile. U.K. domicile rules are complex, and even inadvertent failure to meet filing obligations due to a misapplication of domicile rules can be costly. U.S. tax advisers serving clients with a presence in the U.S. and the UK will need to understand the domicile rules to avoid costly tax and penalties.

Another critical planning element is avoiding dual taxation on income and gains. The U.S. has detailed domestic foreign tax credit rules, along with a comprehensive tax treaty with the U.K. that together address most dual taxation concerns, but, as in all international planning, tax advisers must understand the particular provisions to avoid an unpleasant tax bill--or maybe two.

Other areas of concern in U.S.-UK tax planning include treatment of passive income and tax considerations of cross-border pension ownership, contributions, and withdrawals. Hovering over all these concerns are the extensive U.S. tax reporting requirements imposed on taxpayers with U.S. filing obligations.

Listen as our experienced panel provides comprehensive and practical guidance on navigating U.S.-UK cross-border tax planning and reporting issues.

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Outline

  1. The U.S.-UK income tax treaty overview and dual tax mitigation provision
  2. Domicile and residency rules
  3. Passive and unearned income treatment
  4. U.S. tax reporting requirements of UK-sourced investments
  5. Limitation of benefit provisions
  6. The impact of Brexit on treaty benefits

Benefits

The panel will review these and other important topics:

  • What are the applicable domestic and treaty provisions for mitigating dual taxation on ownership of cross-border pass-through entities and trusts?
  • Limitation of benefits clauses and provisions in the U.S.-UK income tax treaty
  • How treaty benefits may be affected by Brexit
  • Key risks and challenges of passive/unearned income in cross-border situations
  • U.S. reporting requirements of UK-sourced investments

Faculty

Hughes, Annie
Annie Hughes
Senior Tax Manager
Blick Rothenberg

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Konschnik, Kristin
Kristin E. Konschnik
Attorney
Butler Snow

Ms. Konschnik advises individuals and their companies on US and international transactional tax matters, including...  |  Read More

McKeever, Marilyn
Marilyn McKeever
Partner
BDB Pitmans

Ms. McKeever works principally with international individuals and families, and the trustees of their trusts, to help...  |  Read More

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