Adam I am in the process of investing in some properties in the USA and have been advised to hold the properties in an LLC for tax purposes. The LLC will be assessed in the US for tax on income profits, but will there then be further tax to pay in the UK? If so, how is it assessed? I am buying in the Go Zone regeneration area and am applying for federal government funding which is available for some counties. Part of this is paid as a completion bonus and part is a forgivable loan which is forgiven after 5 years. How will I be treated as a UK taxpayer for these sums if I either leave them in the LLC and reinvest the money, or bring the cash back to the UK? I hope you can help and look forward to hearing from you. Kind regards Paul Graveling

Hello Paul Thank you for your enquiry. I believe it to be correct that the properties are purchased in an LLC. With regards to UK tax because the control will be in the UK you will have to prepare a UK version of the accounts and file a UK corporation tax return. There is a double taxation treaty between the US & UK therefore any tax paid in the US can be offset against the UK tax liability. With regards to the completion bonus & loan, I assume that the bonus will be received by the LLC and therefore taxable as income within that company. The same will apply at the time the loan is forgiven. They will therefore both be taxed as company profits as stated above. Hopefully this advice can be of assistance. Should you require anything further please let me know. Kind regards Adam

Thanks Adam. The area I'm investing in has also been granted additional tax breaks by the IRS, the main one being an accelerated depreciation allowance of 50% in the 1st year which can be used to offset against tax on profits and carried forward for up to 15 years. So the LLC will initially have approx. $350,000 of depreciation allowance which will offset any US tax to be paid for many years. If the US tax rate applicable is 30% and I am a 40% UK taxpayer, would I have a further 10% tax liability or 40% liability on profits by the LLC? i.e. is any profit in the LLC treated as 30% tax paid even though no tax has actually been paid due to the depreciation allowance? Hope this is not getting too deep. Thanks for your help. Kind regards Paul