Tax obligation for American working in UK

how much tax will i have to pay if I work in the UK but am a US citizen


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Actually Americans are the only ones who pay taxes when working abroad. However, on September 2001 the US and UK signed a treaty which makes it slightly easier for US citizens to work in the UK. After the treaty's ratification by the U.K. Parliament and the U.S. Senate, pension rules are more favorable to expatriate employees in both countries.

Another unique provision states that the United States will not tax U.S. citizen employees working in the United Kingdom on their current benefit accruals or contributions to U.K. pension schemes. This is the first time the United States has agreed not to tax its citizens on foreign pension income. The general treaty provisions exempting host country pension accruals from home country taxation are inapplicable to U.S. citizens under a common treaty provision known as the savings clause. The savings clause allows either country to tax its citizens under its laws regardless of the treaty provisions.

If you want to read the treaty, you can find it here


Posted 1 year ago ( permalink )
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