# Advice wanted regarding buying property in C.A.



## americandream1 (Jan 11, 2015)

Can you please advice to the following questions:
1.	How does buying a property in C.A change my situation?
2.	I have dual citizenship, the US and the British one paying tax in the U.K and reporting it to I.R.S. every year
3.	My income in the U.K is approximately $50K = £30K
4.	I want to buy a house in C.A. May be a duplex that I rent one and use myself 5 to 8 month a year . How would that change my situation
5.	Can I stay in C.A and only file my taxes in U.K and report to IRS as before?
I have sold my home in the UK and using the money to buy my retirement home in the US.
Thank you


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## nyclon (Apr 3, 2011)

I have moved this to the tax forum where you should get more help.


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## americandream1 (Jan 11, 2015)

*where is the tax forum*

where is the tax forum please? Please be so kind and submit me the URL, many thanks


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## Bevdeforges (Nov 16, 2007)

I assume by "C.A." you mean California.

If so, you need to know that buying property in the US doesn't affect your immigration status in the slightest. But you're a dual national, so you're free to enter the US whenever you like and stay as long as you like.

If you become resident in the US, you do NOT get to choose where you pay your taxes. Once you're resident in the US, you're subject to US tax law. You should "check out" from the UK system (there's a form to file with the tax service indicating that you're shifting your residence outside the UK) to be relieved of paying UK tax.

Once you no longer fulfill the requirements for either the bona fide resident or the physical presence test (or both), your earned income will be fully taxable in the US. (Hence the reason you would want to register your change of residence with the UK tax authority.) 
Cheers,
Bev


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## americandream1 (Jan 11, 2015)

Thank you Bev and everybody elase interested in that for your prompt reply. Your answer was very engligthening but I think I should mention my reason to ask question is because I am 63 and about to retire and I like to be in the US for my retirement but I have to decide in which country I want to be resident based on taxation which at the present is as follows. I am resident in the UK and I have no retirement but my income which comes from rental investments in the UK that is taxed approximately around 30% but I pay only 25% because of tax allowences in the UK system. And my knowledge about the US retirement is zero and according to a letter from the IRS I have only 9 units and I do not meet the 40 units which is required for retirment. So therefore it is important to know how much tax I have to pay out of these investment properties in the US to see whether it is beneficial to become resident there.
Meanwhile or furthermore could you please tell me if you do not have 40 units for retirement is there any other benefit I would be entitled to.

How many months a year you can stay in California or US before they consider you as a resident. I believe in the UK it is 6 months.


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## Bevdeforges (Nov 16, 2007)

The US tax system is different. Because you're a dual national, you're still taxed in the US like any other US resident - on your worldwide income (which will include rental income from your properties in the UK). To avoid double taxation, you'll be able to take a tax credit for taxes paid on your rental income in the UK. (Property-based income, such as rental income, is generally taxed in the country where the property is located, regardless of where you are considered tax resident.)

In your case, living or owning property in the US really isn't going to have any effect on your eligibility for benefits (retirement or otherwise). If you are eligible for a partial US SS benefit, it won't really matter where you are considered resident. (I would check on that, in any event, because there is a Social Security treaty between the US and UK and often those treaties allow you to count any credits you may have in the UK toward a partial US benefit.)

Maybe someone else here will have a few more details to help you out.
Cheers,
Bev


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## BBCWatcher (Dec 28, 2012)

There are both tax and social security treaties between the U.S. and the U.K. If you have 9 credit quarters with the U.S. Social Security system, and you have contributed into the U.K. system (for several years), you (and your spouse) have enough to file a claim for benefits with the U.S. Social Security Administration. (You need at least 8 credit quarters, plus contributions to a treaty country's system, and the U.K. is a treaty country.) It probably won't be a large U.S. benefit, though.

You can also receive your U.K. national pension when living in the United States. Yes, you can claim from both systems. Be sure to tell both systems about the other in order to qualify for the correct benefits. (If you don't tell the U.S. about your U.K. contributions you won't qualify for U.S. benefits at all.)

Note that the U.S. allows you to start collecting retirement benefits anywhere from age 62 to age 70. The longer you wait, the higher your monthly benefit. If you are in good health and can afford to wait, it's a good idea to wait. You also have to consider when your spouse starts collecting the spousal benefit (if you have a spouse), and that can be starting at a different time (with some limits).

Be sure to check the U.S.-U.K. tax treaty to see how that rental income from the U.K. ought to be treated.

If you only have 9 credit quarters with U.S. Social Security then you cannot qualify for Medicare benefits in the United States even when you reach age 65. (The U.S. doesn't count your U.K. contributions to help you qualify.) However, you can purchase medical insurance through Covered California (California's PPACA marketplace) as a California resident. Visit Healthcare.gov for more details. If you have low or moderate income you may qualify for federal government subsidies to help you buy insurance.


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