# Advice on implications of green card



## carmus (Nov 7, 2011)

Hi

We are currently just over 1 year in to a 3 year ex pat move to the us from the uk, we have recently found out that my husbands employer is "changing" the ex pat package and as of Jan 1st he will get paid in the uk (his uk salary is approx $26,000 per year less ) This means we will most likely go green card although we did not want to make that decision just yet! We love it in the us and are not keen to go back to the uk. What will happen re my husbands uk pension? Can it be transferred or will it have to be frozen and a new pension started in the us? We also onw a house in the uk that we currently rent out, if we sell the house in the UK will we be liable to pay tax in the us on the sale? We were advised that as long as we sell it within the first 3 years of being in the us we will not have to pay tax, however, I have been reading other threads and it appears that we may be liable.

Thanks for your help


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## itlajfk (Oct 30, 2011)

carmus said:


> Hi
> 
> We are currently just over 1 year in to a 3 year ex pat move to the us from the uk, we have recently found out that my husbands employer is "changing" the ex pat package and as of Jan 1st he will get paid in the uk (his uk salary is approx $26,000 per year less ) This means we will most likely go green card although we did not want to make that decision just yet! We love it in the us and are not keen to go back to the uk. What will happen re my husbands uk pension? Can it be transferred or will it have to be frozen and a new pension started in the us? We also onw a house in the uk that we currently rent out, if we sell the house in the UK will we be liable to pay tax in the us on the sale? We were advised that as long as we sell it within the first 3 years of being in the us we will not have to pay tax, however, I have been reading other threads and it appears that we may be liable.
> 
> Thanks for your help


Hi,

Everything depends on the residency of the company employing your husband. If he becomes an employee of a U.S. 'company' (versus a U.K. company) his pension in the U.K. will freeze. Your husband would then become a participant in whatever pension plan his new employer (the U.S. company, in theory) has. How they handle the bridging between the two plans (in terms of age, years of service, etc.,) should be laid out in company policy. However, I qualify this by saying that I worked for a large multinational company where everything was laid out in policy somewhere. 

I cannot comment on the sale of your home in the UK. I suspect at the very least, you might be taxable on any incremental change in value from the time you left the UK to the point of sale. Actually, that might be something you should think about - getting a market evaluation for your property as of the date you left. That will serve as a tax basis for you in the U.S. should you decide to sell while living in the U.S. On this issue, I would pay the money , go to a good accounting/tax firm with International experience and get proper advice. If you are located in a major city in the U.S., any of the big 4 firms should be able to help you. Or, if your husband works for a large company, they should have tax advisors available for ex-pats. If they do, go with what they say!


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## Bevdeforges (Nov 16, 2007)

If you go green card, then the "residency" of the company your husband is working for becomes completely irrelevant. What matters is your residency - and if you're "resident" in the US for tax purposes, you'll pay US income tax and withholdings (i.e. benefits and social security).

As a US resident, you'll have to declare whatever profit you make on the sale of your home in the UK (though there is an exemption on this that means you may not have to pay any tax on the transaction if you meet the requirements).

Normally, I think, it's the employer who has to initiate the green card process if they are the ones who transferred you to the US. If they're looking to pay your husband's salary back in the UK, they may not be terribly willing to sponsor you in that manner because it will change their obligation as far as taxes and benefits are concerned.
Cheers,
Bev


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## itlajfk (Oct 30, 2011)

Bevdeforges said:


> If you go green card, then the "residency" of the company your husband is working for becomes completely irrelevant. What matters is your residency - and if you're "resident" in the US for tax purposes, you'll pay US income tax and withholdings (i.e. benefits and social security).
> 
> As a US resident, you'll have to declare whatever profit you make on the sale of your home in the UK (though there is an exemption on this that means you may not have to pay any tax on the transaction if you meet the requirements).
> 
> ...


Jeepers Bev, I was talking about the pension (as per the question asked about the pension), not about their residency for U.S. tax purposes on the sale of the house. And not being the expert on U.S. tax that you apparently are, I recommended they get an evaluation done so they have a basis for any possible taxation obligations in both countries.

Oh, I also thought about mentioning who initiates the green card process, but figured -what the heck? These people will probably know this without me telling them. There are many reasons why the employer would want to keep the employee on the UK payroll, none of which we are privy to.


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## Crawford (Jan 23, 2011)

carmus said:


> Hi
> 
> We are currently just over 1 year in to a 3 year ex pat move to the us from the uk, we have recently found out that my husbands employer is "changing" the ex pat package and as of Jan 1st he will get paid in the uk (his uk salary is approx $26,000 per year less ) This means we will most likely go green card although we did not want to make that decision just yet! We love it in the us and are not keen to go back to the uk. What will happen re my husbands uk pension? Can it be transferred or will it have to be frozen and a new pension started in the us? We also onw a house in the uk that we currently rent out, if we sell the house in the UK will we be liable to pay tax in the us on the sale? We were advised that as long as we sell it within the first 3 years of being in the us we will not have to pay tax, however, I have been reading other threads and it appears that we may be liable.
> 
> Thanks for your help


I'm trying to work out under what circumstances you are working in the US. You say you are one year into a 3 year ex pat move. Does this mean you are on a fixed 3 year contract. If so, I could see the reason why your company is looking to pay you in the UK. Other people on this type of contract have not then had to pay Fed taxes of Social Security and Medicare (makes sense if you are never going to be taking advantage of these services). If on a contract though, how come the company can change it mid-way?

However, you may just mean that you are on an L or H visa which is for three years. *What visa do you have? *

If an H or L then you could certainly go for a Green Card but this will need to be applied for via your husband's company and not you. Again, if the company is looking to pay you from the UK then their position may not be favourable in sponsoring you for the Green card

Prior to becoming a Green card holder, if you are considered a tax resident in the US then you will need to declare your world wide assets on your US tax return. You are unlikely to pay additional taxes because of the tax treaty between the two countries but you do need to declare the assets. You definitely need to declare everything once a Green card holder.

When Visa or Green Card Holders Must Pay Taxes | Nolo.com

With regard your pension, if its a private pension (one where you and the employer pays into a third party insurance plan) you cannot transfer these to the US.

If a final salary scheme and you stay with the same company but are now tranferred full time and paid in the US, maybe this could be moved.


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## Bevdeforges (Nov 16, 2007)

Crawford said:


> Prior to becoming a Green card holder, if you are considered a tax resident in the US then you will need to declare your world wide assets on your US tax return. You are unlikely to pay additional taxes because of the tax treaty between the two countries but you do need to declare the assets. You definitely need to declare everything once a Green card holder.


One small clarification here (and only because there is a current tax issue related to this) - as a tax resident in the US, you need to declare your worldwide* income *on your US tax return. There is a separate requirement to declare certain foreign financial assets - which may or may not require declaration of the UK pension plan (depends on what sort of plan it is, etc.) - but only if you're filing as a US resident.

The key thing at this point is to determine what options you have regarding how and from where you are paid, and whether or not your employer is willing to sponsor you for a green card.
Cheers,
Bev


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## Crawford (Jan 23, 2011)

Bevdeforges said:


> One small clarification here (and only because there is a current tax issue related to this) - as a tax resident in the US, you need to declare your worldwide* income *on your US tax return. There is a separate requirement to declare certain foreign financial assets - which may or may not require declaration of the UK pension plan (depends on what sort of plan it is, etc.) - but only if you're filing as a US resident.
> 
> The key thing at this point is to determine what options you have regarding how and from where you are paid, and whether or not your employer is willing to sponsor you for a green card.
> Cheers,
> Bev


Yup ... quite correct - its your world wide income the US IRS is mainly interested in.


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