US LLC / UK Personal Taxpayer - Best advisor?

How to identify suitably experienced tax advisor for this narrow area of law?

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A UK resident UK taxpayer is a member of a US LLC.  That LLC has an investment, which when sold, will create a profit for the members and subsequently there will be a distribution to the UK taxpayer reflecting his membership interest in the LLC. 

The UK taxpayer will be paying tax in the US and the distribution will be subject to US withholding. 

The facts re Anson do not seem to be the same, so Anson will not apply.  The remittance to UK will therefore be treated as dividends from an opaque entity, and taxed again in the UK, without relief. 

The taxpayer will therefore be a similar situation as Anson, before he won his case.  ie essentially the same income will be taxed twice and the effective rate of tax will be somewhere between 65% and 70%.  This seems unfair. 

It seems there's little he can do about this, but he would like to find an advisor to confirm this.  His existing tax advisor is not expert on this situation, so my question is: how does one find an advisor who's expert on this narrow part of tax law?  I have called a couple of firms and they are all willing to research this but none are already sufficiently expert in this area to give me confidence that they will do a good job, for a reasonable fee. 

 

 

 

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By seandrowe
02nd Mar 2020 15:50

I would suggest focusing on the UK offices of US/international firms... none are going to provide a quick (or cheap) answer. My clients with US interests use Frank Hirth for their personal tax affairs.

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By David Treitel
02nd Mar 2020 17:09

From a UK perspective the client will hopefully have already disclosed the original investment to HMRC because of the UKs "transfer of assets abroad" rules.

The result in terms of tax are not quite as bad as the question suggests because the US will only tax the proportion that effectively connected and will tax at graduated rates of US tax, rather than the flat withholding rate.

As our firm specialises in US tax, I'd be happy to be involved.

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