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US and UK tax on bonus

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BrandonB
6/26/2021 05:08 EST

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Brandon_B
Brandon_B
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Joined 44 m ago · 1 Posts
Discussion Starter · #1 · 33 m ago

Hey there,

My wife and are US citizens currently living in the UK. My wife, who works for a US company that just got acquired, is going to get paid out for her shares. The agreement made by the purchasing company is paying out shareholders (who are all employees) as a cash bonus on the next pay cycle. This is bad for us from my understanding because though bonus in the US are taxed at a flat 22%, the UK taxes it as income at whatever bracket it falls under for the year. Which would put the full amount at 47%, like I said, bad.

My questions are, is there a way to Lowe's this tax responsibility in the UK? If there isn't, and we decided to leave the UK immediately back to the US, would we then be able to have split year treatment on the income for the year? How does split treatment work. Is it based on the entire year's income and the portion of tax year spent in the UK?

Any advice would be helpful. This is a large payout and a difference between 22% and 47% is a difference in many tens of thousands in taxes.

Cheers,
Brandon

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