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International taxation | 9
A comparison of the
UK and the US tax
treatment of
investments
Investors with UK and US exposures need to take
particular care in selecting their investments
By Samantha Morgan, Partner, Jay
Krause, Partner and Philip Munro,
Associate, Withers LLP
G
lobalisation has led to many ensure that their investment strategy is tax is worth comparing the connecting factors
successful families and their efficient across the relevant jurisdictions. As that bring these tax regimes into play. In the
interests becoming a result of historically close ties, many UK, only an individual who is resident in the
international in profile. successful families have both UK and US tax UK for tax purposes is liable for UK capital
Accordingly, tax and exposures requiring them to develop gains tax (‘CGT’) while an individual who is
succession planning for many investment strategies that are tax efficient for not UK resident for tax purposes is, in
families will now have a cross-border element both tax regimes. We compare below the US principle, liable to UK income tax only on
which can mean that the tax position of and UK tax treatment of certain investment UK source income (e.g. rental income from
family investments needs to be considered types as an example of the form of cross- UK property). CGT is charged in the UK at a
from the perspective of more than one tax jurisdictional tax analysis that may be flat rate of 18%; income tax rates presently
regime. As different tax systems can treat required for international families. rise to 40% although for those earning more
certain investment types very differently, However, before comparing the US and UK than £150,000 per annum will rise to 50%
international families need careful advice to tax treatment of different investment types, it from 6 April 2010.
www.investmentinternational.com September 2009 Investment International
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