Who this is for
- UK-resident Americans paying UK income tax
- Expats with mixed UK/US income
Foreign Income & Credits
Foreign Tax Credits (Form 1116)
Offset UK income tax paid against your US liability. Often more beneficial than the FEIE for higher earners.
Overview
Why this filing matters
Offset UK income tax paid against your US liability. Often more beneficial than the FEIE for higher earners.
Note — Offset UK tax against US liability.
What you get
- Multi-category Form 1116 computation
- FTC vs. FEIE comparison to choose the optimal position
- Carryover tracking
Our approach
Built for the cross-border edge cases.
Most US-UK filings fail the same way: a treaty position that wasn’t disclosed, a foreign account that slipped under FBAR thresholds, a PFIC election filed in the wrong year, a carry-forward not tracked from one preparer to the next. The cost of any single one of those is rarely catastrophic on its own — it’s the compounding over multiple filing seasons that quietly turns a clean tax life into a six-figure remediation project.
We start every engagement by looking at the edge cases first — the elections, the disclosures, the carry-forwards, the side-effects on next year’s return — and only then turn to the routine line items. The result is a filing that reads cleanly to anyone who picks it up next: another preparer, the IRS, or a successor in your own business.
- Position memo on every meaningful election, with the reasoning written down for the next return
- Carry-forwards (FTC, capital losses, PFIC basis) tracked year-on-year so nothing expires unused
- Plain-English commentary on every position taken — the kind that makes a future audit a non-event
Our process
How we handle your foreign tax credits (form 1116)
Four steps from first call to filed return. Fixed fee confirmed before any work begins.
- 01
Intake
30-minute scoping call. We confirm your situation, required filings, and send a tailored document list.
- 02
Review
We analyse your position, flag any cross-border risks, and confirm the scope and fee before any work starts.
- 03
Prepare
Draft returns and schedules are prepared with plain-English commentary on key positions for your review.
- 04
File
E-file with the IRS / FinCEN, send confirmations, and handle any follow-up notices or questions.
Pricing
Fixed fees — no surprises
Form 1116 preparation is usually bundled with your 1040 fee. Complex multi-category FTC analysis (carrybacks, basket recharacterisations, high-tax kick-outs) is priced separately after the intake call.
FAQs
Common questions about Foreign Tax Credits (Form 1116)
Is the FTC better than the FEIE for UK residents?
Usually yes. UK income tax rates exceed US rates at most income levels, so FTCs generate excess credits that carry forward — giving you future flexibility to offset US-source income (e.g., US bonuses, RSU vests).
Can I carry forward unused FTCs?
Yes, up to 10 years forward and 1 year back. We track the carryover pool year over year so nothing expires unused.
What's the 'separate category' rule on Form 1116?
Credits must be segregated by income category (passive, general, branch, Section 901(j), certain income resourced by treaty). Mixing categories isn't allowed — which is why multi-source expats often need two or three 1116s.
Can FTC offset NIIT or Additional Medicare Tax?
No. Both sit on Schedule 2 and the FTC doesn't reach them — a common surprise for UK-resident investors with investment income. This often becomes the residual US tax cost even after UK tax is high.
What documentation do you need?
P60s, self-assessment tax-year summaries, HMRC tax-paid receipts, and for the self-employed, proof of UK tax paid in the relevant year. We send a tailored checklist at intake.
Ready to get this filed?
Tell us your situation and we'll confirm scope, a fixed fee, and the documents we need — usually within one business day.