American-born Mayor of London Boris Johnson has relented and paid Uncle Sam the "absolutely outrageous" capital gains tax bill the Conservative Party member owes, the Financial Times reports
Johnson caved ahead of a February visit to Washington, Boston, and New York, where some joked Johnson risked being "detained by the Internal Revenue Service at JFK," the newspaper reports.
"The matter has been dealt with," his spokesman told the Financial Times.
Johnson hasn't confessed how much he owed from the sale of his family home in north London, but sources told the newspaper it was well shy of the approximate $151,000 estimated by some tax experts.
According to the Financial Times, Johnson's tax bill for his half of the home he bought with his wife for $764,690 — and sold for $1.85 million — would be just under $44,000 on his gain of $542,855.
Johnson has previously said he wanted to renounce his American citizenship but found it "very difficult to give up," the Financial Times reports.
The newspaper reports clearing up the tax debt, however, would remove the biggest obstacle to Johnson giving up his U.S. citizenship; his spokesman wouldn't say if he'd actually do that.
American citizens, including those with dual citizenship, like Johnson, have to file a tax return and pay American taxes wherever they live. But the Financial Times notes capital gains taxes on the sale of a primary residence aren't applied by U.K. tax officials like they are in the United States.
Johnson unloaded on Uncle Sam two months ago during a U.S. tour to promote his biography of Winston Churchill. According to the Financial Times, asked if he would cough up the capital gains tax, Johnson fumed:
"No is the answer. I think it’s absolutely outrageous. Why should I? I haven’t lived in the United States since I was 5 years old. I pay my taxes in full in the United Kingdom, where I live and work."
The tax standoff came as Johnson hounded the U.S. embassy in London for unpaid "congestion charges" levied on drivers in the country's capital, the Financial Times reports.
But conservatives in the United States, including a blogger for Reason.com, sympathized with the mayor's predicament.
"Perhaps ironically, the U.K. was once forced to spin off an important North American subsidiary partially over tax issues," J.D. Tuccile wrote last Nov. 19
"That subsidiary appears to have learned the wrong lessons from the unpleasant incident."
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