Does the UK or the US tax my London salary first?
The UK, because that is where the work is done, and its tax comes out of your pay as you earn it. The US taxes the same salary as well, because a US person reports income wherever it arises, and then relieves the UK tax. So the order is fixed: the UK charge happens first, in real time, and the US position is worked out afterwards on the year as a whole. That ordering is the easy part of this corridor. What costs money is rarely the salary; it is the pensions, funds and trusts sitting alongside it.
Will the US tax my UK pension before I draw it?
The question turns on whether the US recognises the arrangement as a pension at all. A UK scheme that grows without any UK charge until you take it does not automatically get the same treatment on the US side; the US decides for itself what the arrangement is, and that characterisation drives whether growth inside it is taxed as it accrues and what reporting comes with it. This is settled from the scheme's own documents, not its name or its marketing. It is worth settling in writing before contributions build up, because the analysis is the same every year and the cost of getting it wrong compounds.
I am non-domiciled in the UK — does that help my US return?
No. Domicile is a UK concept and the US system has no counterpart to it, so a position that limits what the UK taxes does nothing to limit what the US taxes. It can make matters worse in one respect: income left outside the UK charge is still fully within the US charge, and there is then no UK tax on it to relieve, so income you may think of as untaxed is taxed once, in full, by the US. Any UK planning of this kind should be tested against the US result before it is adopted, not afterwards.
How does the US treat my UK investment funds?
By its own characterisation of them, which is the heart of the difficulty in this corridor. A pooled investment sold routinely to UK investors is not necessarily treated by the US as the same kind of holding, and the US treatment can bring charges and reporting that arise while you simply hold it rather than when you sell. The UK tax position tells you very little about the US one. In practice this means examining what is held, fund by fund, before there is a sale to explain, and being deliberate about what is bought while a US filing obligation is running.
Which return do I prepare first, the UK or the US one?
Usually the UK one, because the US relief depends on the UK liability rather than the other way round, and a credit built on an estimate has to be revisited. The two tax years do not begin and end together, so preparing in order also means matching periods: a UK year can touch two US years, and the tax has to follow the income into whichever year it belongs. Where deadlines make the ideal sequence impossible, the US return is filed on the figures then available and revisited deliberately once the UK position is final.
Is a UK trust I benefit from taxed by the US?
Possibly, and the first task is to establish who the US regards as the taxable person, which may not be the person receiving anything. A UK trust is characterised on US terms: depending on who created it, who can benefit and what powers were retained, the US may look through it to a settlor, tax a beneficiary on what is distributed, or impose reporting on someone who has received nothing at all. None of this can be read off the trust's UK treatment. The deed and the history of the trust are what decide it, so they are obtained before a position is taken.
Do I pay tax when I inherit property abroad?
The inheritance itself is often not income to you, but three other things can create tax: the estate may owe tax where the deceased or the property was situated, some countries tax the recipient directly, and the gain from the date you inherit to the date you sell is yours. Reporting obligations can also attach to holding the asset. See inheriting property abroad.
What is double taxation?
Double taxation means the same income being taxed by two authorities. It comes in two forms: juridical, where two countries each tax one person on one amount, and economic, where two different people are taxed on the same underlying profit — a company on its earnings and a shareholder on the dividend paid out of them. Relief comes from a treaty, a foreign tax credit, or an exemption, and which one applies depends on the income type. How to avoid double taxation sets out the routes.
