I have a client who is a UK National and is now permanent UK resident and has been throughout 2019/20 . She lived in the USA for a number of years and has a Green Card. she no longer has a home in USA or spends any time there other than maybe a week a year .
She receives pensions from the USA and UK . She is therefore required to submit UK and US tax returns , both as I understand have to include worldwide income . ( I think a Green Card holder can be taxed as a US resident even if they don't live there any more, as the US have rules which are different to most other countries ) . I do the UK tax return.
Some of the income is taxed at source , but quite a lot of it hasn't been . There will be extra tax to pay somewhere . My query concerns who has "first bite" at any extra tax to pay"
A) Having declared worldwide income on the UK return , does the client pay all extra tax via SA , and then we tell the US adviser how much UK tax is payable so they can claim DT relief for UK tax against the US liability ?.
B) Does the USA return collect all the additional tax on worldwide income, and we are then told how much is payable in USA so we can claim DT relief against the UK liability?
any clarification is appreciated , thank you