# US Tax on 25% of UK LLC with no other US owners



## troglodyteaedon (Aug 10, 2017)

I am trying to find information on the following situation (which I have an opportunity to be in):

Three people, two non-US tax liable and one US expat, form an LLC in the UK for a microbusiness (seriously, I don't think this will affect FEIE or Fbar or anything with a hard number limit) which will only trade in the UK. 

So, I know it won't be a PLC, and hence not a corporation for the purpose of US fed taxes (thanks form 8832). I think 8865 might still be required, except that I can't work out which type of filer I would be, since it won't be US controlled? It can't be a disregarded entity because it's not a sole tradership, but there doesn't seem to be a category for more than 10%, not not US-controlled.

What am I missing?

Having been a good citizen and reported for the last 10 years as an expatriate, I'd like to stay that way, but I am starting to think that it simply isn't possible to do it and be compliant with US Tax Law!

Many thanks!


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## Bevdeforges (Nov 16, 2007)

From a quick read of the instructions, you'd be a category 4 filer in the year that you establish the business. 



> A Category 4 filer is a U.S. person that had a reportable event under section 6046A during that person's tax year. There are three categories of reportable events under section 6046A: acquisitions, dispositions, and changes in proportional interests.


The partnership isn't "US controlled" and you don't seem to fit any of the other categories. Honestly, for really small businesses they don't seem to follow up on these things anyhow. And as long as you report your acquisition of the 25% interest in good faith in the year of acquisition, they'll get back to you if they expect anything further. (But don't hold your breath.)
Cheers,
Bev


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## troglodyteaedon (Aug 10, 2017)

Thank you -- that would greatly simplify things. 

I want to be sure that if it does take off (it _could_ happen, but probably won't), I have tried to comply!


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## Moulard (Feb 3, 2017)

troglodyteaedon said:


> (seriously, I don't think this will affect FEIE or Fbar or anything with a hard number limit)


If you have signatory authority over the accounts... which I assume would be likely given a third stake in the business.. the business accounts would be reportable on your FBAR.

I don't know UK rules but I am guessing it is LLC because it is a partnership, and thus the liability falls to each partner. 

If that is the case... you will need to consider Form 8865 too.


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## Dunedin (Aug 12, 2013)

You might want to be clearer about the entity that you intend to use.
You mention using a UK LLC. The term “LLC” is not used in the UK. You probably mean a limited company, Ltd. However, you might wish to compare this with using a UK LLP, a limited liability partnership. Broadly, for UK purposes, a Ltd is tax opaque, but an LLP is tax transparent.


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