While millionaire presidential running candidate, Mitt Romney, shocked the nation recently when his most recent tax records showed him paying a tax rate of only 15 per cent of his income, you may be wondering if you too can work the American tax system to your advantage.

You may well benefit if you play your cards right but ignorance will cost you so it is wise to seek advice before you leave. The first thing to consider is your place of residence and domicile. Although you may retain your British citizenship, if you work abroad for more than a year and do not return to England for more than 91 days each tax year, you should no longer be taxed in the UK; the caveat being that you remember to notify the tax office before you leave, and file form P85. Even if you are renting a property out in the UK, you can avoid being taxed if you file the correct paperwork.

Living abroad means you can avoid paying capital gains tax on any chargeable gains made on assets bought or sold during your period of non-residence. This includes stocks, shares and property although you may have to check the finer details if you own more than one property.

You may also want to hang on to any assets or properties that are carrying a loss if you plan to return because the losses can be offset against future taxes. But after the Mitt Romney revelation, you’re probably wondering what you’ll be taxed in America.

First, your income will be taxed by both the Federal Government and the State. Federal rates range from 10 to 35 per cent depending on your income; State rates vary widely and if you live in Alaska or Florida your income will not be subject to state taxes. You will also be taxed on investments and for Social Security and Medicare. Romney’s secret was that his income came from investments which are taxed at a lower rate.
For more information on tax in the USA, click here

For details of property for sale in America, visit the USA listings on Rightmove Overseas. One way to save money when buying in the USA is to use a currency specialist when transferring your pounds into dollars to complete the purchase of your property. For more information on this, contact Smart Currency Exchange.

To understand the full step-by-step process to buying a property in America, collect The Overseas Guides Company’s ‘USA Property Buying Guide’