B2 - back and forth between US/Canada/Mexico

[UKRV]

Hi Everyone,

Can someone clarify the B2 situation for me please (and the residency/tax issue if poss).

My wife and I are planning to visit the US, buy an RV, and tour the US, Canada and (perhaps) Mexico for anything from 6 months to 6 years.

We have a choice of buying properties in the UK to rent out or place c£200k into a savings account (probably offshore).

[u]B2</u>

We will be applying for a B2, allowing us to apply to enter the US for upto 6 months at a time for upto 10 years - that bit we understand.

Q1. Do you think that having property in the UK would be more favourable than having the savings account when it comes to actually applying for the Visa ?

Q2. Our plan is to tour the US for 6 months (if allowed), visit Canada for the 4 summer months and then re-apply to enter the US. Is it likely that they would allow us a further full 6 months? - I know they will decide on the day, but any thoughts would be good. (we would then like to do the same thing by going to Mexico for a few months and then return to the US, hopefully for another 6 months).

[u]Residency/Tax</u>

Im stuck on the tax implications of staying so long in the US (and Canada).

Q1. Our only world-wide income would be around £5k each per year - would such a small amount need to be declared ?

[u]Our Main Aim</u>

When we return to the UK, we want to import our RV.

If we can stay out of the UK for 12 months (hence the offshore savings account idea), own the RV for 6 months and not sell it for 12 months on our return, we would save around £28,000 in tax and import duties - so you can see our reasoning for asking the above questions.

I appreciate that we must get some professional advice on this, but any initial guidance from you guys would be welcomed.

Thanks

Paul and Ann-Marie

[steph_goodrum]

One of the first things the US will concern themselves with is that you do intend to return to the UK, obviously when you apply for the Visa , if you have property and jobs here that will be easier to prove.

I wouldn't mention your plan at all when applying for the Visa, just that you intend to tour/travel for up to 6 months. They are going to be very reluctant if they think you are planning up to 6 years and could be trying to immigrate illegally.

As far as the tax goes after a couple of years you may fall into the category of what the US terms "substantial presence" and they will expect your worldwide income to be declared. I don't think (I'm only guessing that they are going to believe that £5k a year is going to be suficient funds to be leading that sort of lifestyle and may well query whether you are working ilegally somewhere.

As you rightly say you really need to speak to someone professional to ascertain the viability of your plans.

[esprit]

I think you can go to Canada for six months without a visa?. I dont see a problem doing six months in America and then six in Canada. The full six months out would be safer than four but of course it all depends on the officer you get. Remember you can apply within the US to extend the 6 months, though you have to give a reason which may be hard in your circs. Keeping a UK property is essential as they will want to see evidence of permanent ties with the UK and a reason for retutning when they interview you for the visa. What you do later is up to you, but remember you can be asked the same question at port of entry.
Tne tax question is for an accountant but I thought you needed to be a permanent resident to pay US tax on worldwide income. And if you are out of the country for a full tax year, you will be deducted tax at source but can apply for a refund.

[UKRV]

Thank You for your replies.

I have heard of people obtaining their B2 and then selling their property in the UK - but I can see your point about trying to re-enter after our stay in Canada (should they decide to ask loads of questions). I guess a copy of our property deeds could always be carried with us (would they have access to available records to show we had already sold the place?)

In trying to save the £27k UK tax/duty, we would prefer to have our money stored outside the UK as this would be adequate to prove we werent "resident" in the UK for the 12 months.

The income I stated of £5k each in the year, would be actual income - we would still have around $40k in a dollar account to par***und our "tour", but this wouldnt be taxable income.

One concern I have is that, because we wont have a defined length of stay, we will not have any return flights booked - will this be a problem when we get there?, or would we do better to pay for more expensive flights which allow for changes?

Anyway, thanks again for the advice - keep up the good work.

Paul and Ann-Marie

[Snapper]

<blockquote id="quote" class="ffs">quote:Originally posted by UKRV

In trying to save the £27k UK tax/duty, we would prefer to have our money stored outside the UK as this would be adequate to prove we werent "resident" in the UK for the 12 months.[/quote]

That's unfortunately not the case. It isn't quite that easy to become non-resident and not ordinarily resident for tax purposes (two distinct statuses that will both affect your tax position - e.g. you can be non-resident but still be considered ordinarily resident for tax). The location where your savings are kept has no bearing on how either of these are evaluated.

From the gist of your post I think you will still be considered to be ordinarily resident in the UK for tax purposes, as effectively you are just taking a very long holiday but with the intent to return to the UK. To qualify as not ordinarily resident you must have the intention to leave the UK permanently and reside elsewhere (everyone has to reside somewhere!!) This would be a contradiction to your B2 visitors visa to the USA.

[steph_goodrum]

http://www.irs.gov/instructions/i1040nre/ch01.html#d0e189

This explains a bit about the substantial presence test.
I'm not sure if the formula has changed but it was the number of days in one year + xx% from the preceding year and xx% from the year before that.