Jonathan Schwarz considers the significance and idiosyncrasies of the US-UK tax treaties
The importance of tax treaties between the UK and the United States cannot be underestimated.
The US has been the single largest source of foreign direct investment into the UK for decades and the UK is similarly the second biggest direct investor into the United States. The US is also the UK’s second largest trading partner.
As with all tax treaties, these treaties are best understood in the context of the tax and legal systems of the two countries. Double tax treaties between these two countries date back to 1945. The 1945 comprehensive income tax treaty was first replaced in 1975, and subsequently with the current treaty on income and capital gains that was concluded in 2001 and amended by protocol in 2002.