Skip to footer

London mayor pays sales tax on English house...to the IRS?

Mayor Boris Johnson learned a hard lesson: he can hold US-British dual citizenship. And with it, US-British dual taxes.

|
Olivia Harris/Reuters/file
London Mayor Boris Johnson waves to reporters before disembarking on a train during an official visit to Kuala Lumpur last month. Mr. Johnson has reportedly paid a US capital gains tax that he had previously described as "absolutely outrageous."
  • By Michael Holtz Staff writer

When US authorities hit London Mayor Boris Johnson with a tax bill for the sale of his house in North London, he called the demand “absolutely outrageous” and refused to pay.

But that was back in November. On Thursday, the Financial Times reported that the mayor has since changed his mind. He’s decided to settle up just weeks ahead of a scheduled trip to Boston, New York, and Washington.

Mr. Johnson, who was born in New York, holds dual American-British citizenship. Although he hasn’t lived in the US since he was a child, American law requires all citizens to pay taxes on worldwide income, wherever they are living at the time.

So when Johnson decided to sell his first house last year, the US Internal Revenue Service sent him a bill. Unlike Britain, the US levies a capital gains tax on proceeds from the sale of a main residence. US law also requires citizens to pay taxes on foreign earnings above $97,600. 

Johnson’s decision to settle the bill stands in sharp contrast to remarks he made last year during an interview on National Public Radio. When asked whether he would pay, Johnson 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."

Johnson refused to disclose how much he owed to the US for the sale and his spokesman told reporters that “the matter has been dealt with,” according to the BBC. "The mayor won't be saying anything more on the subject,” the spokesman said.

But sources close to the mayor told the Financial Times that the bill was “nowhere near the £100,000 ($150,000) estimated by some tax experts.” The newspaper used property sales records to estimate that Johnson faced a tax bill of about $44,000 from the sale. It is unclear how much the house sold for.

As one of Britain’s most popular politicians, Johnson is widely considered the top candidate to succeed Prime Minister David Cameron as head of the ruling Conservative Party should the party lose the next election in May. He is expected to return to parliament in the safe seat of Uxbridge and South Ruislip, The Guardian reports.

Paying the tax bill should allow Johnson to renounce his US citizenship, which he has previously said is "very difficult to give up." But doing so is not mandatory for him to be eligible to run for prime minister. 

You've read  of  free articles. Subscribe to continue.
Real news can be honest, hopeful, credible, constructive.
What is the Monitor difference? Tackling the tough headlines – with humanity. Listening to sources – with respect. Seeing the story that others are missing by reporting what so often gets overlooked: the values that connect us. That’s Monitor reporting – news that changes how you see the world.
editor@csmonitor.com
Subscribe
Mark Sappenfield
Editor

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.

Subscribe to insightful journalism

QR Code to London mayor pays sales tax on English house...to the IRS?
Read this article in
https://www.csmonitor.com/World/Europe/2015/0122/London-mayor-pays-sales-tax-on-English-house-to-the-IRS
QR Code to Subscription page
Start your subscription today
https://www.csmonitor.com/subscribe