Splitting time between UK and USA

Baffled

Member

Member since 23 February 2023

Baffled

23 February 2023 21:58:05

Baffled

23 February 2023 21:58:05

Hello,

I'm a 70yr old retired UK citizen and my partner of 5yrs is a US citizen. She was living here in the UK with her family, but her sons work has ended and they are flying home. We would like to continue our relationship and split our time between our families in the UK and USA (roughly 6 months each, with some additional travel). I am baffled by the implications of this and would appreciate this groups advice. I have done some research on the below, but would appreciate advice on any other areas to consider and where to find expert guidance. Many thanks.

Length of stay in the USA. I see a general visa is 90 days. Does this mean I can stay 90 days, go away for a week and come back again, or would I need to return to the UK for a longer period?
Tax. I see I would need to pay tax twice on my income - does this include UK pensions and investments? I also want to protect my estate upon death for my son and daughter (both UK citizens). If I meet the substantial presence test would that mean that if I passed on, my whole estate would also be subject to US tax?
Health Insurance. Does everyone have to have it? Any recommended providers?

Tanuki714

Serial expat

Member since 10 March 2021

Tanuki714

25 February 2023 01:49:14

251

Tanuki714

25 February 2023 01:49:14

251

@Baffled

Hello Baffled,

There's quite a bit to unpack here and to be honest, I am not sure about the UK side (familiar with the French side but most agreements are country to country).

Here's what (little) I know and the questions I would ask:

The US allow « long term tourist visas » (B1/B2) which allow you to stay for longer than the typical 90 days. The US visa guide or the official US government site will give you more details. As a rule of thumb, coming in for 90 days on an ESTA, going out for a week and coming back in will raise red flags for US immigration who are on the look out for people trying to « game the system ». There's a number of threads on this forum about the topic.
Residency is a fuzzy concept and is highly contextual in addition to being country dependent. There was a recent thread about a French citizen spending about/over 6 months outside of France (incl ~6mo in the US) on a B1/B2 who was struggling with « tax residency » concepts. As far as the US is concerned, tourists (incl « long term » tourists) are typically not US tax residents if their « main financial interests and sources of income are not in the US ». As long as you do not have US sources of income and are not considered a « legal resident » from a visa perspective (i.e. not on a work visa, green card etc.), it shouldn't be an issue. I do not, however, know what the UK rules are.
Income tax: France and the US have a tax treaty in place such that while you may have to FILE in both countries/ DECLARE assets/income streams across both countries, you typically get « credit » on one side for what you pay on the other side (GROSS simplification since it really depends on the types of incomes and a bunch of other things). But I'd see a specialized accountant/tax specialist for this particular topic since there are so many nuances (income from investments, real estate, pensions etc.). I have no idea if such a thing is in place between the US and the UK.
Estate planning is even trickier and really depends on a lot of factors. I am a dual citizen France/US and as far as I can tell, for France « residency » for the purpose of estate planning is « where the center of your « economic and social » life is » (so in my case the US) and that is the country whose laws would have jurisdiction if I were to pass without clear instructions. You are unclear in your message as to whether your US partner is a spouse or not. That matters since in most countries (incl. France and the US, I'm assuming it's the same in the UK) « official » spouses have different right from « domestic partners ». If you are NOT married, I would assume from a legal perspective you are single and if you want to make special accommodations for your partner in case of your passing you have to explicitly make the arrangements for that. To give you a quick illustration, French law does not allow cutting out descendants entirely out of your succession, while you can do so with a spouse. In the US, you cannot cut out a spouse entirely but the « minimum » for descendants is lower than in France. So again, this is highly dependent on your SPECIFIC situation. I would first find out if you even have to worry about this given your « residency » status (basically if you spend 6mo in the US, you may not be considered a fiscal resident OR a resident for the purposes of inheritance depending on the US and UK laws and may have nothing to worry about). Either way, leaving EXPLICIT and « official » instructions with the help of a qualified professional is probably the best way to make sure your wishes are honored.

This turned out to be longer than I thought and (I know) not particularly helpful to give you answers other than « talk to professionals ». My rule of thumb would be if you're not married and do not plan to get a green card or other « US dependent » visa, if the center of your economic life is still the UK, you shouldn't have to worry too much. But again, based on my limited understanding.

Good luck and let us know what you find out (so that if I'm widely off base you can set me straight, LOL).

Tanuki

Tanuki714

Serial expat

Member since 10 March 2021

Tanuki714

25 February 2023 02:00:25

251

Tanuki714

25 February 2023 02:00:25

251

B2 Info from US Government:

https://travel.state.gov/content/travel … sitor.html

US Tax residency Info:

https://www.irs.gov/individuals/interna … us-tax-law

Hope this helps!

Tanuki714

Serial expat

Member since 10 March 2021

Tanuki714

25 February 2023 02:03:10

251

Tanuki714

25 February 2023 02:03:10

251

Oh. And I spaced on the health insurance part. Even less familiar with that but if you're « just » a tourist, I would think all you need is a good international travel/health insurance which you can probably get from the UK.

GuestPoster2809

07 August 2023 16:28:47

GuestPoster2809

07 August 2023 16:28:47

Navigating the complexities of splitting your time between the UK and the USA can indeed be overwhelming. Here are some key areas to consider and a few pieces of advice:

Tax Residency Status for the USA: As you spend roughly 6 months each year in the USA, you may meet the substantial presence test, making you a tax resident in the US. As a US tax resident, you'll generally be taxed on your worldwide income, including UK pensions and investments. However, you may be eligible for foreign tax credits to offset some US taxes paid on UK income.

Tax Residency Status for the UK: As a UK citizen, you remain a UK tax resident unless you establish a tax residency in another country and meet specific criteria for being a non-UK resident for tax purposes. You may need to review the Statutory Residence Test in the UK to determine your tax residency status there.

You will be UK tax resident if:

Have a UK home for 90 days but live in it for 30 days
Work in the UK for 3654 days or more
Live in the UK for 183+ days

Length of Stay in the USA: The general visa for US visitors is the ESTA, which allows a stay of up to 90 days. However, you cannot simply leave for a week and return to reset the 90-day clock. The US immigration authorities may consider this as visa misuse and deny entry or even apply more stringent rules. To stay longer than 90 days, you may need to explore other visa options, such as a B-2 tourist visa or a longer-term visa like a spouse visa if you marry your US partner.

You will be US tax resident if you spend 183+ days in the country (100% of the current year + 1/2 of the days spent in the previous year and 1/6 of the days in the previous year to that)

Estate Tax Considerations: The US has estate tax laws that can potentially impact your estate upon death if you meet the substantial presence test. While estate tax exemptions are relatively high, it's essential to seek expert guidance to understand the specific rules and plan accordingly. There may be ways to minimize estate tax exposure, such as establishing trusts or making gifts during your lifetime.

Expert Guidance: Given the intricacies of international taxation and immigration, seeking professional advice is crucial. Engaging the services of tax advisors who specialize in international tax matters and an immigration attorney familiar with US visa options will be beneficial. They can provide personalized guidance and help structure your affairs in the most tax-efficient and compliant manner.

Review Your Finances: Take the time to review your financial situation, including pensions, investments, and estate plans. Ensure your UK assets and estate are appropriately structured to provide the most protection for your children in case of your passing.

In summary, while there are challenges to consider, with proper planning and expert guidance, you can successfully navigate the complexities of splitting your time between the UK and the USA, considering your tax residency status in both countries and protecting your financial interests and estate.

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