# To Pay Tax or Not to Pay Tax...need advice



## popeyenat (Apr 11, 2009)

Hi,

I get paid in Euro's. My primary residence is USA. I am a UK citizen. I have no property in the UK. I would like to buy a house, but as the company I work for is based out of Cyprus, I have no W2. Also my work is steady contract work.

I would like to buy a house. I do not want to pay income tax if I can help it. I would like to buy a house somewhere, anywhere in either USA, Caribbean or Europe (sunny).

How do I get a mortgage. Is there a bank someone can recommend. What should I do with my money to avoid being heavily taxed. What country favours my situation.

Should I get an offshore bank account? I have heard HSBC may favour my situation? What about a tax free domicile like Grand Cayman or St. Thomas.

Currently my income gets credited to my American Bank. Can anyone help?

Thanks


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## popeyenat (Apr 11, 2009)

Of course legally avoid paying tax!


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## Veronica (Apr 5, 2008)

popeyenat said:


> Hi,
> 
> I get paid in Euro's. My primary residence is USA. I am a UK citizen. I have no property in the UK. I would like to buy a house, but as the company I work for is based out of Cyprus, I have no W2. Also my work is steady contract work.
> 
> ...


Have you thought of buying in Cyprus as your company is based here?
You wouldn't pay taxes if you don't actually live here and if you retired here eventually the tax you would pay is much much lower than the UK.


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## Bevdeforges (Nov 16, 2007)

It's not as easy as that. If you are legally resident in the US, you should be paying US income taxes. (Actually, many who are illegally resident in the US pay taxes, too, in hopes of getting legal one of these days.) 

And if you want to buy a house in the US and don't have W2s to show your income, the bank will ask you for... (wait for it)... copies of your income tax returns to confirm your income. So file them.

If you decide to change your residence later on, you can organize that, but from what you've said so far, you are subject to US taxes - and the deadline for 2008 filings is next week.
Cheers,
Bev


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## Fatbrit (May 8, 2008)

Bevdeforges said:


> It's not as easy as that. If you are legally resident in the US, you should be paying US income taxes. (Actually, many who are illegally resident in the US pay taxes, too, in hopes of getting legal one of these days.)


I can't work out how he's resident here, either.


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## popeyenat (Apr 11, 2009)

Hi Bev,

Okay just to clarify, I did actually pay my taxes for 2008. My NEW job is now contract work, with the company being based in Cyprus. As for my status, I am a green card holder.

To be clear, I do not want to do this illegally, I will pay income tax if I have to. But in order to buy a house I have to provide a W2 of course, and as a contractor you need 2 years of proven income.

So it works like this...green card holder wants to buy a house, but works for a company as a contractor in Cyprus, does not want to get screwed by ins, needs a mortgage, etc etc.

Hope that clarifies.


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## Bevdeforges (Nov 16, 2007)

As a green card holder, you have to file US taxes, no matter where in the world you are resident. The only way to avoid paying US taxes on your new contract work would be if you could establish your residence overseas and take advantage of the overseas earned income exclusion (though you have to file returns to claim the exclusion) - which means remaining outside the US for a full calendar year or 12 consecutive months.

As far as getting a mortgage is concerned, your best bet is going to be working closely with a local bank, and probably offering to make a somewhat larger than usual down payment. Most banks will require (or used to anyhow - before the days of liars' loans) a two-year salary history in order to evaluate your credit worthiness. 

One other option might be to join a local credit union that makes mortgage loans. Credit unions are often more willing to work with their customers, particularly those in unusual circumstances.
Cheers,
Bev


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## Fatbrit (May 8, 2008)

Bevdeforges said:


> As a green card holder, you have to file US taxes, no matter where in the world you are resident. The only way to avoid paying US taxes on your new contract work would be if you could establish your residence overseas and take advantage of the overseas earned income exclusion (though you have to file returns to claim the exclusion) - which means remaining outside the US for a full calendar year or 12 consecutive months.


Which is probably goodbye to your green card. Got a green card, pay taxes! You can't have your cake and eat it.


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## twostep (Apr 3, 2008)

Your center of life is within the US. Ergo - you pay taxes. You can work outside the US for up to a year without loosing your GC privileges. Of course paperwork is involved. This will also put your timecount for citizenship on hold. Nevertheless you are obligated to file taxes.

Positive credit history, tenure in same line of work, steady income, 20%+ downpayment and you have a good chance to get a mortgage. By the way under 20% downpayment you will fall into PMI which is somewhat of a hassle to get out of once you qualify.

It is pretty simple - you have to play by the rules or find a new playground. 

@Bev - the wholesale market has all but shut down for small lending institutions. As they do not retain 30-year debt inhouse and can not sell it on the open market they more or less exited this arena.


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## Bevdeforges (Nov 16, 2007)

twostep said:


> @Bev - the wholesale market has all but shut down for small lending institutions. As they do not retain 30-year debt inhouse and can not sell it on the open market they more or less exited this arena.


It must vary by region these days. I'm currently back in the US, where my (small local) bank is advertising that they are still making mortgage loans. No idea how they are doing it. But I've always found them very willing to work with customers to solve the problem at hand.

I only wish all banks were are pleasant to work with.
Cheers,
Bev


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