London mayor pays sales tax on English house...to the IRS?
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 鈥渁bsolutely outrageous鈥� and refused to pay.
But that was back in November. On Thursday, the Financial Times reported that the mayor has since . He鈥檚 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鈥檛 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.聽
Johnson鈥檚 decision to settle the bill stands in sharp contrast to 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 how much he owed to the US for the sale and his spokesman told reporters that 鈥渢he matter has been dealt with,鈥� according to the BBC. "The mayor won't be saying anything more on the subject,鈥� the spokesman said.
But sources close to the mayor told the Financial Times that the bill was 鈥渘owhere near the 拢100,000 ($150,000) estimated by some tax experts.鈥� 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鈥檚 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 聽in the safe seat of Uxbridge and South Ruislip, The Guardian reports.
Paying the tax bill should allow Johnson to聽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.聽
