Claiming Council Tax on Schedule A

[chenies]

Hi,  there have been some comments already on this subject, but my question is slightly different than previous ones.  I do own a property in UK and I am also resident for tax purposes here.  As a USA citizen, I am completing tax returns but would like to claim the Council Tax which is effectively a property tax.  Is this possible?  Thanks!

[KrisD15]

"No. Under the Tax Cuts and Jobs Act (TCJA), foreign property taxes are not deductible on U.S. incom...

[chenies]

Thank you Kris,  it is confusing because I had seen this, however as I live in UK, then the property is not 'foreign' to me, and whereas tax on foreign income can be credited/deducted then it seem logical that so should tax paid on one's primary residence be credited/deducted.  Thank you for clearing this up though!  I have another question that maybe you can answer.  I paid an amount  into my spouses government workplace pension (not my own).  Is this deductible?  Thanks

[DaveF1006]

It depends. If this is a contribution to your wife's pension working for the UK government,  the contribution is not tax deductible.

[chenies]

Hi Dave, thank you!  One more question, hopefully my last one for today!  Are NS&I Bonds considered Financial Assets on form 8938, and if so what type of 'foreign entity' is the issuer i.e. Individual, Partnership, Trust or Estate? I am not sure what the US considers the UK government to be.  Thanks

[DaveF1006]

 According to the IRS, "if you hold them outside of a financial account, must be reported on Form 8938, provided the value of your specified foreign financial assets is greater than the reporting threshold that applies to you.  If you hold foreign stock or securities inside of a financial account, you do not report the stock or securities on Form 8938.   

In your case, it depends on how the ownership of the NS & 1 is structured.  Do you own these as a stand-alone investment account or are they part of an investment inside of a retirement account that UK government administers. If this is the case, the bonds are not reported on a 8938.

@chenies 

[chenies]

Hi Dave, Thank you! I believe I own them as a stand alone investment account.  They are government bonds one can purchase individually (they are not inside of a retirement account or similar).  I understand that they should be reported on 8938, but some questions on that form don't really apply i.e. describing the entity has a tick box of 4 choices none of which describe the UK government.  Thanks for your help.

[DaveF1006]

I believe, unless I am wrong, the tick box that you refer to is in Box 2, type of filer. The filer is you ( or spouse)  so you would check the box marked  individual. 

[chenies]

Hi  Dave, thanks, no I am referring to Part XI box 35.  Thanks

[chenies]

35
If asset reported on line 29 is stock of a foreign entity or an interest in a foreign entity, enter the following information for the asset.

Name of foreign entity
Type of foreign entity
(1)
Partnership
(2)
Corporation
(3)
Trust
(4)
Estate
d
Mailing address of foreign entity. Number, street, and room or suite no.
etc

[DaveF1006]

After reading the text surrounding V1 Line35, you would only report this if you are reporting an asset if this is a stock of a foreign entity.  Foreign entity is an entity that exists in the private sector and not the government.  Leave this section blank. 

[chenies]

Ho thanks, apologies I meant to say  36 b.  Sorry about that,  36 b is referring to an asset not a stock … b asks for type of issuer .  I believe that these bonds are “other foreign asset’ but the type of issuer is none of these.  thanks for your help 

[DaveF1006 · Accepted solution]

Consider NS&I a corporation just for reporting this for the 8938 on line 36.  Technically, it is a state controlled agency with a corporate structure. 

@chenies 

[chenies]

Great, Thank you Dave so much for your help!