I'll be making about $80,000 a year in a regular job in a company established in the U.K. I'm single with no dependents. Do I have to pay any taxes in the U.S for this income earned abroad?

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    What is your US citizenship status? It factors into the answer. – JohnFx Oct 30 '15 at 19:26

No. Things are a little complicated, but in a nutshell, assuming you'll be staying there for at least an entire tax year without any interruptions, you're entitled to a foreign earned income exclusion that reduces taxable income. For 2014, the maximum exclusion was $99,200 per taxpayer. So unless your income gets passed the $99,200 threshold, you don't have to worry about paying income taxes in the U.S.

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    HOWEVER, you do need to file a US Tax Return. In addition, you need to file FBAR reports on all accounts (bank, investment,...)you hold outside the US. – DJohnM Oct 30 '15 at 19:25
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    This answer assumes no substantial investment income. – Loren Pechtel Nov 1 '15 at 0:04
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    The OP most definitely needs to worry. In order to claim FEIE certain conditions must be met, with one of them being filing a full and correct tax return. Also, you're assuming 0 non-earned income, which is a rarity at these levels of income. FEIE doesn't exclude any interest or investment income. Last but not least, it may sometimes be more beneficial to get FTC rather than FEIE, and you're not mentioning it at all. So yes, the OP needs to worry. – littleadv Nov 2 '15 at 4:34

Paying tax on foreign income

You usually need to fill in a Self Assessment tax return if you’re a UK resident with foreign income or capital gains.

You don’t need to fill in a tax return if your only foreign income is dividends under £300 in total and you don’t have anything else to report.

Different rules may apply if your permanent home is abroad.

Filling in your tax return

Use the ‘foreign’ section of the tax return to record your overseas income or gains.

Include income that’s already been taxed abroad to get Foreign Tax Credit Relief, if you’re eligible.

HM Revenue and Customs (HMRC) has guidance on how to report your foreign income or gains in your tax return in ‘Foreign notes (2014)’.

Foreign income that’s taxed differently

Most foreign income is taxed in the same way as UK income, but there are special rules for:

1) pensions

2) rent from property

3) certain types of employment income


You have to pay tax on pensions if you’re resident, or were resident in any of the 5 previous tax years.

You’ll usually only pay tax on 90% of your foreign pension payments (10% is exempt from tax). Check with your pension provider to find out how you’ll be taxed.

You pay UK tax on unauthorised payments from your foreign pension, eg some lump sums and early payments.

Rent from property

You pay tax in the normal way on overseas property. But if you rent out more than one, you can offset losses against other overseas properties.

Certain types of employment income

You usually pay tax in the normal way if you work both in the UK and abroad. There are special rules if you work:

1) on a ship or in the offshore gas or oil industry

2) for the EU or government, or as a volunteer development worker.

  • Please don't post promotional links in your answers. Thank you. – Chris W. Rea Nov 11 '15 at 20:31

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