London Mayor Bows to ‘Outrageous’ Demand to Pay US Tax Bill
Boris Johnson has finally agreed to pay an unsettled capital gains tax bill to the US government, in spite of previously insisting he would not bow to the “absolutely outrageous” demand.
The London mayor, who was born in New York and holds a US as well as a British passport, decided to pay the outstanding bill ahead of a visit to Boston, New York and Washington next month.
All US citizens, including those with dual citizenship, are legally obliged to file a tax return and pay US taxes wherever they are living. Capital gains tax on the sale of a primary residence is not applied by UK tax authorities, but is levied in the US.
Mr Johnson’s troubled relationship with the land of his birth emerged last November on a tour of the US to promote his new biography of Winston Churchill, when he revealed he had been hit with a demand for capital gains tax. Asked whether he would pay it, he said: “No is the answer. I think it’s absolutely outrageous. Why should I? I haven’t lived in the United States since I was five-years-old. I pay my taxes in full in the United Kingdom, where I live and work.”
Editor's Note: Citizenship-based taxation is a horrendous policy that is only practiced by two countries in the entire world. For more on this topic see this IM article.