Tax Question

[Strix]

I have a curious question...

My niece is visiting from England. She is 19, she lives full-time in England on a Visa and still has US citizenship. She has been living in England for 4+ years.

What taxes is she required to pay...both here and in the UK?

[Sheilbh]

Where's she working?

Edit:  Also how much time has she spent in the UK per year?

[Eddie Teach]

http://www.youtube.com/watch?v=Oyu5sFzWLk8

[ulmont]

I have a curious question...

My niece is visiting from England. She is 19, she lives full-time in England on a Visa and still has US citizenship. She has been living in England for 4+ years.

What taxes is she required to pay...both here and in the UK?

..."it depends."  Generally speaking, the US will want to tax whatever income she earns anywhere, and any state (and some cities) she earns income in will want to tax those as well.

However, the US will exclude some amount of salary earned abroad and taxed abroad; alternately, you can take the foreign taxes paid as deductions / credits. 

What the UK does, I have no clue.  Also, I am by no means an expert on tax law, and especially on UK tax law, so the above is just general statements.

http://www.irs.gov/pub/irs-pdf/p54.pdf (Tax guide for US Citizens and Resident Aliens Abroad)

[stjaba]

I think (but am not sure) that although foreign income is taxable, the first roughly $90,000 is exempt, assuming it is earned abroad. See ulmont's link for more info.

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Incidentally, I have a relative, a US citizen, who has been living in the UK for the past 35 years. She's never filed a US tax return  , though she's been working over there. Presumably, her tax liability would be 0(because of her income level), but she is paranoid whenever she comes to the US that the IRS will come after her.

[Richard Hakluyt]

This will let you/her know her liabilities for UK tax :

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/index.htm

For "normal" people it is quite straightforward, if you work in the UK and/or are resident in the UK then you pay UK tax. If she is wealthy then she will have hired experts so that she can avoid paying tax, but in that case I guess you would not have asked your question 

[dps]

This will let you/her know her liabilities for UK tax :

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/index.htm

For "normal" people it is quite straightforward, if you work in the UK and/or are resident in the UK then you pay UK tax. If she is wealthy then she will have hired experts so that she can avoid paying tax, but in that case I guess you would not have asked your question 

Actually, if she's lived in England for 4+ years, and Strix is just now helping her figure out what taxes she has to pay where, she may already be in trouble with the taxman in both countries.  He should have been asking on her behalf in 2008.