Newsletter
Newsletter
11.15.11
In this issue of Perspectives, we focus on international benefit issues. Susan Serota, national leader of our Executive Compensation and Benefits Practice writes on "HR Issues in Cross Border Corporate Transactions" and discusses why it is important for the HR team to be involved from the planning stage. Jim Klein, of our New York office, writes on "Social Security in an International Context" and focuses on the interplay between U.S. Social Security and foreign social security systems where multinational companies send U.S. employees to work in a foreign branch or subsidiary. Finally, Scott Landau and Bradley Benedict, also in our New York office, advise on "Employee Data Privacy - An Overview of Employer Responsibilities" and note that companies need to be aware of their obligations under the profusion of foreign data protection laws and regulations that govern the collection, use and transfer of personal information.
Questions from our readers...
Q. I'm a U.S. citizen and a long-time resident of the UK. For UK tax purposes, historically I have paid UK taxes only on income "remitted" to the UK (which would include UK source income). Of course, I have been fully subject to U.S. taxes throughout that period. I am considering paying the UK "remittance based charge" (30,000 sterling). Can I claim a credit against U.S. tax for this charge?
A. Under a recent IRS ruling (2011-19), the somewhat surprising answer is yes, the 30,000 sterling would be eligible for a credit against U.S. taxes. However, the normal U.S. rules for foreign tax credits will still apply, such as only getting a credit for taxes on non-U.S. source income, using U.S. sourcing rules. Multinational employers with U.S. employees in the UK may want to make these employees aware of the recent ruling.
For a copy of the entire Perspectives: An Executive Compensation, Benefits & Human Resources Law Update - Fall 2011 Newsletter, please click here to download.