The idea of retiring to the US is an attractive prospect for many Brits but, unless you have direct family in the US who are already US citizens and can sponsor your application, outright retirement is very difficult to achieve.
Commonly, it will involve you in applying for with an E-2 visa or an EB-5 visa. An E-2 visa is issued to people who are planning to start or develop a business in the US, Consequently, if you’re planning to buy a business venture in the US as part of your retirement plans this could work for you.
The EB-5 immigrant investor visa is designed to attract foreign capital into the US. Basically, you need to invest $1m ($500,000 in some cases) into a new or existing business established after November 1990. What’s more, the business must create full time work for at least 10 US workers.
There is a third way, which is popular with Britons who want to retire to the US: You can generally spend up to 6 months each year in the US using a B-2 tourist visa. These visas are issued for 10 years, but allow for multiple trips during this period.
This means, for example, you can escape to the sunnier parts of the US during the winter months and return for the UK summer. Needless to say, this works for many people.
There is no national health service in the US, so you need to make your own arrangements. There are a number of different expat policies available if you intend to reside permanently in the US, but if you are only staying in the USA for part of the year you will need to arrange an insurance policy in the UK. This requires quite a lot of shopping around as coverage for several months at a time can be hard to track down.
However, it is important to make sure you’re covered or have sufficient funds as healthcare costs in the US can be very expensive.
You need to look at your tax position carefully. You should seek expert advice on this subject to understand the implications for you.
However, generally, if you are planning to spend no more than 120 days each year in the US under a B-2 tourist visa then you should still be subject to UK taxes. If you exceed this number of days, you may be subject to US taxes on your worldwide income. It is not automatically the case that you will be liable for US tax if you exceed the 120 days per year, but there are a series of tests that will be applied to determine whether you should be assessed for US tax or not.
If you’re planning to apply for an E-2 or EB-5 visa then you may end up paying US taxes. US tax rates for 2011-2012 range from 10-35%. The tax thresholds vary depending on your status. For example, if you’re filing your tax return as a single person, submitting a joint return as a married couple or married but submitting separate returns.
Buying and selling property
The total cost of buying and selling property is estimated on average to be around 9% of the property value. This is based on an old, not new, property valued at US$250,000. (source: Global Property Guide).
Please note that these figures are only an indication of the likely fees commonly payable and should be taken as a guide only. The percentage amount will vary, depending partly on the price of the property and where you are buying, and could be significantly more than this.
Average house prices
Average house prices are:
Average house price (US$)
|England / Wales||252,197|
Source: Land Registry (28.10.2011), www.propertywire.com September 2011
Care needs to be exercised with these numbers. What you might be able to buy in the US could vary in size considerably from a comparably priced property in England and Wales.
UK State Pension
Your UK state pension will continue to be paid and you will also benefit from any increases each year. This applies whether you’re permanently resident or visiting under a temporary B-2 tourist visa.
This content is general, high level information only and should not be interpreted as individual advice. Because the circumstances of each person will be different and are not known to us we recommend that advice, tailored to your specific circumstances, is sought.
Whilst we have made every effort to ensure that the information shown is accurate and up to date please be aware that legislation and tax laws do change.