UK Threatened by Double US Taxes as Trump Challenges LLC Tax Discrimination

Trump’s “Double Tax” Idea for UK: What the Tax Wizards Are Saying

Picture this: the Big Apple’s biggest president could suddenly double the amount people in the UK are paying on US taxes. Sounds like a plot twist in a political thriller, right? The inside scoop comes from John Havard, a US/UK Private Client Consultant at the Boston‑sized advisory firm Blick Rothenberg.

Section 891 – The Secret Sauce

It’s a part of the US Internal Revenue Code that gives the President the power to check if foreign countries are “discriminating” against American taxpayers.
If they are, the President can move the goalposts and double those US taxes.
For the UK, it would hit UK companies that do business in the US and British folks with US‑based investment income.

Why the UK Might Get Hit

Under the current UK guidance on US limited liability companies (LLCs), Brits who are members of LLCs are being double‑taxed. The UK folks pay the UK tax and then toss a ‘can’t use the US credit’ excise tax on top of it. That’s because an LLC in the US is treated just like a partnership for tax purposes.

“It’s a weird situation,” Havard grinned. “Americans in the UK seeing their U.K. tax bills pop up, thinking the U.S. still owes a credit, but the IRS is saying, ‘Sorry, no credit! You’re stuck.’”

Could a Quick Fix Save the Day?

The chemists at the HMRC and Treasury labs hint at a Competent Authority Agreement (CAA) that could make the UK treat an LLC like a partnership for UK tax purposes. The treaty would just put a marker on the LLC that says, “Yep, this is a partnership for UK taxes.”

Fast-track solution: A CAA can be hammered out in weeks.
Potential roadblock: Even if the treaty works, Trump might still push back, especially if he feels the tax deal is “bad.”

What’s the Bottom Line?

If HMRC sticks to the current guidance, they could be opening a door for Trump’s “double tax” retaliation. But if they act now, it’s easier to avoid a tax barrage on UK citizens and businesses.

Bottom line: Back up before the Big Apple’s President jumps back, or you’re stuck paying twice as much. And that’s not exactly the deal Maker’s dream.