Resident/non resident

Resident/non resident

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Potential client (UK citizen) lives in the US and is trying to get a green card. He can't yet work in the US so is coming back to the UK for 5 days a month to work a specific contract.

If he is employed in the contract via a limited company (assuming no IR35 implications) what are the tax implications for him personally?

He also wants to claim the flights each month as expenses, as the contract is under two years I think this should be allowable.

Thank you for any help, my brain is not working this evening!!

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By David Treitel
09th Sep 2013 10:22

As a US resident (whether legally there or not) he is required to file US income tax returns, FBARs and Forms 5471. He could personally owe US tax on dividend income from the UK limited company.  It is suggested that he claims detached duty expenses; but of course HMRC may decide this is ordinary commuting and that he is not "detached" from any other employment. From a US perspective the away from home rules require a contract of under 12 months (rather than 24) and equally the expenses may be disallowed.

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