# Form 8854 - tax resident status



## madeamistake (Jan 16, 2018)

Good morning

I am on the slow, painful path to renounce my US citizenship (just going through the streamline filing process for 2014 - 2016, then will file for 2017, then probably have to wait out 2018 and renounce early 2019 so I have met the 5 years filing requirement). 

Looking at the 8854 form, my assets would not come close to the $2million mark, but I am unclear how I would answer this question in Part IV:

'Did you become at birth a U.S. citizen and a citizen of another country, and do you continue to be a citizen of, and taxed as a resident of, that other country?'

Taking each part in turn:
- Yes, at birth I became a dual UK-US citizen. I have never lived in the US. 
- Yes, I continue to be a UK citizen
- BUT, I do not know if I can say that I am taxed as a resident of the UK. I am a British crown servant working overseas which means that I pay UK taxes on all of my UK income (including salary and rental income). Because I have diplomatic status in the country where I am posted, I am definitely not tax resident there or anywhere else. However for the purposes of my UK self assessment tax return I have to tick the 'non resident' box as I have physically been out of the country for a certain number of days. 

To be clear: I only have tax reporting requirements in the UK and the US. Because I have been non resident from the UK, it means that on the sale of some US mutual funds which I am going do shortly I will pay capital gains tax in the US instead of the UK (though I know if I return to the UK within a certain number of years I will liable there too). That is the only tax implication of being UK non resident that I have come across so far. 

It would seem extraordinary to me that I could be a British crown servant serving Her Majesty's Government and not be able to tick this box in form 8854, but I absolutely do not want to risk getting it wrong. I suppose it doesn't really matter if I do not meet the $2million mark anyway, but I worry that it looks really weird if I am basically saying that I am not tax resident anywhere because that sounds super dodgy to me!

What do you guys think?


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## Bevdeforges (Nov 16, 2007)

The way I'd interpret it is to say that, while you are technically treated as "non-resident" for UK tax purposes, you are most certainly still subject to UK tax law, so are "taxed as a resident of that country" despite your status. Yeah, picky, but that's how tax things work in the US. (Besides, US diplomats are expected to pay US taxes only precisely because they are usually exempt from taxation by the country they are serving in. US tax rules are usually based on "how it works in the US.")

The other thing is that they really don't study your 8854 form very closely unless you indicate that you might actually be subject to further taxation (which you aren't).
Cheers,
Bev


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