Happily ever after. Until taxes, that is.
May 2, 2010 7:53 AM   Subscribe

An American guy and a Dutch gal met in Europe, got married in Vegas and now live in the UK. Looking for first person information from other multinational couples residing in a third country regarding taxation.

Mrs Mutant (Dutch) & I (American) met while I was working in Amsterdam. Got married in Vegas and she relocated (formally emigrated) to the UK Q4 2007.

We both make London our home but when she moved here we kept her flat in Amsterdam. We've been careful to avoid spending too much time there to avoid complicating our tax matters (physical presence test).

As an American I'm obliged to file US tax returns, in addition to my UK statements. Mrs Mutant still has to file back in NL because of our flat.

We'd like to make sure that we're taking the correct actions to avoid tax issues down the road.

On the US side I (think) we're seeing:
Get Mrs Mutant a social security number (presumably using form SS 5?)
Married filing separately on the US returns

On the UK side:
Inform our local Tax Office of the details regarding our marriage
File and claim the Married Couples Allowance

On the NL side:
I visit Amsterdam and apply for a borgerservicenummer (Dutch equivalent of a US social security number)
Mrs Mutant files a return in NL noting we're married

Questions:
  • If Mrs Mutant has never lived in the US does she have to ever file a US return?
  • What tax credits might we be overlooking on the UK side?
  • On the NL side, while I never lived there full time I divided my time between Amsterdam & London. I've never triggered physical presence, so we're assuming that I won't have to file - is this correct?
While we realise the chance of an identical situation is very low, we're hoping some other couple has a similar problem (two different nationalities residing in a third) and can advise what they're up to. Bonus points if one of the parties is American.
posted by Mutant to Law & Government (9 answers total) 1 user marked this as a favorite
 
I don't understand why you think your non-American wife has to file a US tax return, unless your intent is to file your US tax return jointly? Or, if she has earned income subject to American income taxes? But, because you suggest that she doesn't have a US Social Security number, it doesn't seem the case that she has generated income taxable by the American authorities.

Where in the UK do you live? London has lots of tax accountants familiar with American tax returns because of the great number of American expatriates who live there.
posted by dfriedman at 8:22 AM on May 2, 2010


Is Mrs mutant a us resident or Citizen? If not, why would she file in the US? I am married to a US citizen but it has never occurred to me to file taxes there, I also do not file taxes in the UK (where I am a citizen) because I do not reside there even though I attend a UK school. I do file in Canada because I reside and work here.
posted by saucysault at 8:23 AM on May 2, 2010


On your first question, the answer is "no" according to my accountant. I'm Canadian and married to an American who has to file US tax returns for the rest of her life, and we live in Canada, so my accountant is versed in both Canadian and US taxes. Mrs. Mutant won't be able to get a social security number because she's not allowed to work in the US. Instead she'll have to get an ITIN (Individual Taxpayer Identification Number). Note however that, while technically required, doesn't actually seem to be necessary in practice for your situation. My wife (the American), and most others I know in a similar situation (very common in this part of Canada), just write "Canadian living in Canada" in the "spouse's SSN" box, and it's never been a problem.
posted by Emanuel at 8:23 AM on May 2, 2010


Find an accountant used to dealing with foreigners living and working in the UK and get a high level overview of what is required in your situation....strangers on the internet aren't going to be able to help you.
posted by koahiatamadl at 8:49 AM on May 2, 2010


While we realise the chance of an identical situation is very low, we're hoping some other couple has a similar problem (two different nationalities residing in a third) and can advise what they're up to. Bonus points if one of the parties is American.

*Raises hand*
I get the bonus point too.

Like others above, I would suggest consulting a tax advisor familiar with this. But, to answer the questions:

* If Mrs Mutant has never lived in the US does she have to ever file a US return?

No. I file my 1040 as Married, filing separately. I do not include my spouse's SSN. She does not actually file a return since she is not a US citizen or living in the US. This was what my US-based tax advisor told me to do. This may or may not apply to you.

* What tax credits might we be overlooking on the UK side?

No idea. But if you discover any, pleas let me know. :)

* On the NL side, while I never lived there full time I divided my time between Amsterdam & London. I've never triggered physical presence, so we're assuming that I won't have to file - is this correct?

Portugal (my "NL") doesn't care at all about my existence since we have never formally registered our marriage. I am still trying to understand what the benefits/drawbacks of doing so are. Like your situation, my wife has assets in PT all under her name.
posted by vacapinta at 10:02 AM on May 2, 2010


"If you are married or in a civil partnership and living together and at least one spouse or partner was born before 6 April 1935, the person with the higher income can claim Married Couple’s Allowance. We reduce the claimant's tax bill by 10 per cent of the Married Couple’s Allowance to which he or she is entitled. The actual amount depends on the income of the spouse or civil partner with the higher income."

from http://www.hmrc.gov.uk/incometax/married-allow.htm#1
posted by A189Nut at 11:18 AM on May 2, 2010


You might also want to check out what the US embassy in London has to say.
posted by IndigoJones at 1:39 PM on May 2, 2010


I assume you filed the IRS Report of Foreign Bank and Financial Accounts (FBAR) years ago, but that might be another thing to add to your list for future Americans in a similar situation.
posted by xueexueg at 1:41 PM on May 2, 2010


One other sort of general comment on this situation. I (and possibly you depending on your residency status) exist in a bit of grey are with regards to European law.

I am an EU spouse. This means I derive all rights and responsibilities of my EU citizen-spouse. That includes, for example, the right to live and work in any EU country.

In a "normal" situation, I would also be a spouse registered in a specific country. A Dutch spouse or a Portuguese spouse or whatever. Taxation-wise, I would follow the guidelines of that country. The EU stuff is irrelevant for taxation since the EU is not a taxing entity.

In my situation, however, I am not registered as a spouse in any country. Britain, I suppose. But I am not the spouse of a British citizen. So, I am an EU spouse (and have a Residence Card to prove it) and my residence rights derive not from the fact that I married a Dutch or Portuguese citizen but from the fact that I married a citizen of an EU member state. The two are different things.

There's a disconnect here, I guess, and thus the grey area. The only taxation laws that thus apply are either through residence (I do pay taxes where I live and work) and of course global taxation (i.e. the US) That is it. My EU citizenship is not (yet) asking me for any taxes.
posted by vacapinta at 8:47 AM on May 3, 2010


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