Americans living in the UK who are anticipating reform of how they are taxed on the basis of remarks by President-elect Donald Trump during his campaign are in for a disappointment, say leading audit, tax and business advisory firm, Blick Rothenberg.
John Havard, a US/UK Private Client Consultant at the firm, said: “President-elect Donald Trump did hint at relaxing the US taxation of US citizens living outside the USA in the latter part of his presidential campaign.
“Measures which either reduce or eliminate the US taxation of overseas Americans would be attractive to those US citizens living overseas.”
He added: “However, the economic cost of taxation for a US citizen living in the UK is unlikely to be materially reduced. This is because the tax rate is determined by which of the UK or the US taxes a particular item at the higher rate.”
John said: “Under the UK Government’s proposals to reform the taxation of ‘non-doms’, in most cases where an American has lived in the UK for more than 4 years, the UK will have the higher tax rate. This means relaxing the rules for taxing US citizens living outside the USA will not materially impact the overall economic cost of taxation if they are in the UK.”
He added: “Also getting support in Congress for eliminating the US taxation of US citizens living outside the USA is likely to be difficult. Without a super majority in the Senate, any change would need to pass by budget reconciliation. Such a measure would result in less revenue for the US Treasury and the need to identify an offsetting revenue raiser.”
John said: “It will be hard to convince politicians with a predominantly US domestic agenda that revenue raisers should be applied for the benefit of Americans living overseas if that were to involve sacrificing something on their US domestic wish list.”
