Tax Guide For Dual Citizens of the UK and USA

Are you having dual citizenship in both USA and UK? You wish to know about income tax filing related to dual citizenship. Then, don’t worry at all! You have come to the right place at where you will get all the details related to dual citizenship in the UK and USA. So, stay tuned, and we will help you with every single detail related to the dual citizens of the USA and UK at

Being a citizen of both the UK and the US comes with some of the advantages. Also it will also complicate your income taxes. To aid clear up any dilemma you might have, here is something that you must know about dual citizenship in the UK and USA.

Who is eligible for Dual Citizen? Under the tax policy of the US, dual citizens are subject to taxation, even if they have not set any remark in America. This makes it necessary to know whether you become eligible for dual citizenship. If the Internal Revenue Service connects with you about your delinquent income tax obligations, you might face serious charges, and your ignorance might not excuse you.This brings us to the regulations of citizenship in the USA. You may automatically be determined as a citizen of the US if either of the following implies:Minimum of your parents was a citizen of the US when you were bornYou are born within the US borders

For instance, let us assume Suzan and Thomas are citizens of the UK with no connection to the United States. While on a trip to New York City, Suzan gives birth to a son named John. Because John was born in the United States, he is automatically a citizen of the United States regardless of his parent’s status of citizenship. And as his parents are from the UK, he is also a citizen of the UK, making him a dual citizen at birth.

Alternatively, Roza is a citizen of the United States who takes a job in the United Kingdom. While there, he marries a British woman. They have a daughter, Eliza. As father of Eliza’s father is a citizen of the United States, she is a US citizen automatically regardless of where she was born. Even if she never travels to the United States, she may still be determined as a citizen of the United States. And due to her mother, who is a citizen of the UK, she may be a dual citizen of both countries.

Do US-UK Dual Citizens Need to File US Taxes? 

Yes. The United States is one of two countries across the globe that imposes citizenship-based taxation rather than residence-based taxation. It means that all citizens of the United States have to file an annual income tax return no matter where they stay across the globe. When filing their income tax return annually, citizens of the United States should report their income worldwide, not only US-source.

Do US-UK Dual Citizens Need to File UK Taxes? 

If you stay in the United Kingdom, yes. Unlike the United States, the UK imposes taxation of residence. It means that you may be taxed if either of the following implies:

You are a UK residentYou get income from a UK source.

Also, workforce taxes are withheld by their employer through the pay of UK as you earn (PAYE). In most scenarios, you have to file a UK income tax return if:

You have an income investment that exceeds GBP 1000You have income employment that exceeds GBP 100,000 that includes both benefits and salaryYou have self-employment income that exceeds GBP 1,000 You or your partner has income that exceeds GBP 50,000, and you report the Child CreditYou earn from a non-UK income sourceYou are the company director (unless the company is non-profit and you get no benefits or salary

To double-check your obligations of income tax filing, you may use the tool from the authority of UK income tax.

Note: If you don’t need to file a UK income tax return, you have to if you receive a refund or report deductions.

Common deductions are:

Work expenses 2500 poundsPrivate pension contributionsDonations to charity

Are UK-US Dual Citizens Taxed Twice on Their Income? 

As dual citizens of the UK and US might have to file income tax returns in both countries, this leaves a risk remark for double taxation. Double taxation means being taxed on a similar income twice.

For instance, let us assume that you are a dual citizen working in the United Kingdom for a British company. As your income comes from a British resource, you may owe income taxes to the government of the UK. And as a citizen of the United States, your income from the US government is also taxed, which includes the UK income source that the British government has taxed already. There are many policies in place to assist Americans who stay in the United Kingdom in eliminating double taxation. Here are some of the common examples:

UK-US Tax Treaty

The UK and US have agreed to a treaty of taxes. Due to this, many citizens of the US stay in the UK and are already exempt from double taxation. The UK-US treaty of taxes defines which particular nation has jurisdiction to tax a specific income source. Also, you might have to pay taxes to whichever country you stay in for the majority of the financial year.

Foreign Earned Income Exclusion

 The FEIE or Foreign Earned Income Exclusion is an exclusion of income taxes that are available for specific citizens of the United States living overseas. Income taxpayers who are eligible for the FEIE may exclude a specific amount of foreign income source from taxation in the United States. The particular amount changes from year to year. You may exclude up to $1,12,000 amount in foreign income sources.

For instance, if you work and stay in the UK and get a salary equal to $80,000 for the financial year, you can exclude your complete income from taxation in the United States. If you instead earned a salary that is equal to $1,20,000, you may exclude to entire $112,000. It might leave only $8000 of your UK income source that is subject to United States taxation.

To become eligible for the FEIE or Foreign income earned exclusion, you should meet the standards of either the PPT (Physical Presence Test) or Bona Fide Residence test.Foreign Tax Credit If you become eligible for the FTC (Foreign tax credit), you may get an income tax credit equal to at least part of the income taxes that you pay to a foreign government. In several scenarios, you might report the entire amount you paid in foreign income taxes. If that particular amount is huge than the income taxes that you owe Sam’s uncle, you may use the credit to delete your tax bill to the United States completely.

As you may check, there are many options for citizens of the United States to stay overseas to eliminate double taxation.

Does the UK Tax Foreign Income?

 Whether the UK income taxes your foreign income might be based on residency status. If you become eligible as a resident of the United Kingdom, you may be taxed on your income worldwide. If you are a non-resident, you can only be taxed on your income from UK sources.

Note: There are a few exceptions to this regulation. You may consult an eligible income tax expert to know more about your obligations of UK income tax.What Other Obligations of income tax Do US-UK Dual Citizens Have? Also, when it comes to filing income tax returns, dual citizens of the UK and US might have to file specific other tax documents. The two common examples are the FBAR and FATCA reports.

FATCA If a citizen of the United States owns non-US financial assets that are valued above specific criteria, they should file Form 8938 form: Statement of Particular Foreign Financial Assets, better called a FATCA report. The particular criteria for your finances may be based on your income filing status and whether you become eligible as a bona fide resident of the United Kingdom.

If you file a FATCA report, you can fill out the form and link it to your 1040 Form and file them at the same time.FBAR If a citizen of the United States has at least $10,000 deposited in more non-US bank accounts, they should claim it by filing Form 114 FinCEN: Report of Financial Accounts and Foreign Bank also called the FBAR.

The FBAR is technically because of 15 April, but if you miss the deadline, it will extend automatically to 15 October.

Note: You should file it electronically using the FinCEN BSA E-Filing system, and it cannot be filed by mail.

What If You Are Behind on US Income Taxes? 

Every citizen of the United States has to file an income tax return yearly; several Americans staying overseas are unaware of this need. The truth is few citizens in America might not be aware that they are citizens. These are called “accidental Americans.”

If you are behind paying your United States income taxes, you don’t have to worry. The Internal Revenue Service offers an amnesty program to assist Americans staying abroad to come into compliance without facing any issues. It is called the process of streamlined filing compliance.

To use the program, all you have to do is:

You may file FBAR or Foreign Bank Account Reports for the last six years.Self-certify that if you fail to file were not willfulYou must file the three delinquent income tax returns and pay the delinquent income taxes that you owed during that specific time with interest.

It might bring you into compliance with the Internal Revenue Service laws.

Get Reliance Assistance with Your Expat Income Tax Return

In this blog, we discussed a guide for dual citizens of the UK and the UK. It will also help you know the implications of taxes for individuals who have dual citizenship in the UK and the United States. Also, this topic is simple and easy. If you have any queries, we at have all answers. Our experts at services, we are specialized to help expats manage their obligations of United States taxes.

Our experts at USTAXFiling are highly educated and qualified to resolve all your dual citizenship taxes in the USA and UK. We are here at USTAXFiling to help you anytime. Our committed and dedicated team has all the recent updates related to the Dual Citizenship of the UK and USA. You can connect with us at USTAXFiling, and we will help you with all the details you require. So, your wait is over! Connect with us at USTAXFiling to help you with the dual citizenship income tax for citizens of the US and the UK. Also, we will even prepare and file your expat income taxes on your behalf.

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