Bob

Yes, I saw that yesterday. Someone in the local group said their September 1st appointment has been moved to Feb.

bostonwilly

An immigration attorney in the USA told me that all visa appointments at the London Embassy have been rescheduled until after end of September. He said that the USA side of the visa process, e.g. processing petitions etc, is working fine but the problem is the final step of getting the visa from the embassies.
Cheers

bostonwilly

Hi all,
Just a little update: got my petition approved in December. It then took ages to do the visa applications for the family and me because the website kept crashing and freezing, timing out... Finally got my appointment at the embassy for March. I think the original September estimate was a little ambitious!
Cheers

Bob

Well that's good news, congrats on getting an appointment, and good luck in March!

bostonwilly

Hi everyone,

Another update while I'm here on the forum: We got our visas at the end of March! Now just a move to plan...

I had a quick look on the forum for recommendations for international tax advisors, accountants etc but couldn't find any. Maybe I'm just looking in the wrong place. I'll certainly need someone to help with the first year's tax return and possibly future ones too, and in the short term could do with some help working out how to tidy up finances etc before we move. E.g. is it better to sell a rental house in the UK before or after we move?

We're speaking to realtors now and got a few conversations lined up with mortgage brokers who supposedly know about the helping people from abroad. If anyone has any recommendations for the latter I'll be keen to hear them.

Cheers

PetrifiedExPat

Just seen this thread..

So, Boston is full, and I mean full, of explants from around the world (including me). There are tax services out there, hunt for the smaller boutiques vs HR Block and Turbo Tax, depending on how complicated your situation is.

As for property, cash is king but the underwriters will want three months worth of accounts (they have done for me for three mortgages I have had). Have them go through the numbers and include property tax/hazard insurance/property insurance premiums. Cost of living needs some thought, Boston is expensive, make sure you dont have half of your income go out to the mortgage. Cars I think are pricey, but I never owned one in the UK though so don't have a true feel.

Good luck with the move, Boston is a cool place.

Glasgow Girl

If it’s a rental house and you have not lived in it personally for two of the last 5 years you should probably sell before you move. The reason is that you will be subject to both UK and US Capital Gains taxes on the profit from the sale if you sell it after the move. You will get credit in the US for taxes paid in the UK so your bill be the higher of the two amounts, not the total of the two amounts. Which one is the lower bill depends upon your personal circumstances but if it’s the UK you would want it to be sold before you move to avoid paying additional taxes to the US. Plus you can likely do without the hassle of reporting the sale of a foreign investment property if you do not have to.

You may also be subject to tax on any foreign currency gain on the mortgage which will apply if the pound to dollar exchange rate drops from the date you took out the mortgage to the date you pay it off (on the sale) and with the low exchange rate right now that is a very real possibility. That is taxed as ordinary income so you do not get the preferential capital gains rate.

Also, it is a lot easier to sell while you are in the UK. I sold mine while over here but it takes more effort than selling while in the UK.

I think you are aware of the consequences of holding foreign investments in anything other than cash, bonds or directly in shares so make sure you sell pooled investments like OEICs, Investment Trusts and Unit Trusts BEFORE you arrive here. ISA’s are not recognized by the IRS so that will not protect any such investments.

Make sure you are up to speed on foreign account reporting requirements, particularly FBARs, Form 8938 which must be included with your tax returns and be aware that you must report pensions, life insurance as well as any investments and bank accounts. Comply fully right off the bat, doing anything else can be extremely costly and stressful.

Good luck with your move. The financial reporting requirements are not too bad once you understand what is required.

Bob

Considering the cost of selling a house over here, the recommendation would be to rent for a year before buying, especially in and around Boston.
Give yourself time to figure out what you end up liking. Areas are so different in vibe, even how they handle winter etc.

bostonwilly

Hi all,

Thanks for replies.

PetrifiedExpat, thanks I'll have a look, sounds like I should easily be able to find one. Thanks also for the tips on identifying all costs I need to include.

Glasgow Girl, thanks for the info on CGT. It is a rental house, we've not lived there for nearly 9 years. I certainly feel like it will be easier to sell whilst we're in the UK, but I was trying to get a judge of how urgent that might be. When I ran through the resident and non-resident CGT calculators on gov.uk it appeared that there is actually less CGT to pay as a non-resident (strange!) but I've not yet figured out what the US CGT tax on the sale would be and if it would actually be greater than the UK tax. I'm not sure what you mean about he foreign currency gain, I'll have to look into that more.

All that foreign investments business - yes I'm aware, and only got one potential problem but need to speak to a tax advisor for them to confirm it's status. ISAs not an issue. Foreign accounts I can do, but I'm still not exactly sure what an FBAR is... did they choose that acronym as a joke?! (fubar!).

Bob, yes, selling a house we later find we don't actually like (or not like the area) would be expensive, but to be honest it's a risk I'm prepared to take. Looking at the maths, we can afford to buy and renting seems much more expensive than buying equivalent houses. Also, I'm fed up with being a tenant! We won't actually be living in Boston, we'll be out past Concord, so perhaps there's less variability out there than in the Boston city area.

Cheers

tht

I was in a similar position in NYC in 2012, I had a rental but when we looked for a bigger place the monthly cost (excluding deposit) was less than a similar rental. Now it’s let for significantly less a month than the tennant would be paying if they brought a similar unit because prices have gone up so much.

Agree the cost of selling property here is high, the solution to that is not to sell property. Find a house that would also make a good rental and if you decide / need to move, let it out… the upside is that once you have a 30 year mortgage, most allow you to decide to let it out if you move out after year or 2 and to keep the loan. I think in the UK some make you get a buy to let mortgage if you convert.

Glasgow Girl

On the foreign currency gain, if you have owned the property for 9 years then you will almost certainly be subject to a foreign currency gain on your mortgage, because in that time frame the exchange rate was well above $1.50, and for the past few years it has been $1.30 plus or minus, in fact it’s down around $1.25 at the moment. As an example, if you took out the mortgage when the exchange rate was $1.50, and pay it off when it is $1.30 then you will owe tax at ordinary income rates on 20 cents for every pound of your mortgage, so a 100,000 pound mortgage would subject you to tax on $20,000 at your highest marginal rate, which could range from 10% up to about 37% depending upon your income. Living in the Boston area will almost certainly skew you towards the higher tax brackets. You will have to pay state tax at about 5% as well. Depending upon the exact exchange rates, the size of your mortgage and your marginal tax rate that could be a significant hit on top of the capital gains you will also be subject to. Their reasoning is that you needed less dollars to pay off the loan than you borrowed and therefore you made a gain, not exactly fair to immigrants but it is what it is.

Long term Capital Gains are 15% if your total income is less than $258,000 and 20% (plus a further 3.8% for the Obamacare Net Tax) for everything above that level. Total income is all income for that year and will include your house sale so you are almost certainly going to be at the 20% rate plus 3.8% Obamacare tax on at least a portion of that amount, plus state capital gains at 5% on all of it. The higher your income, the more likely it is that you end up paying a little more tax than this because they start to phase out various deductions based upon you income.

FBAR stands for Foreign Bank Account Reporting, although FUBAR would be a more accurate acronym. It’s a very annoying form that you have to complete annually, if you have foreign assets that total more than $10,000. That excludes property and collectibles like art work, but includes pensions, life insurance, bank accounts, bonds and just about any type of savings vehicle. The penalties for not complying are severe, so best to get on it the first year you are here. You also have to complete Form 8938 annually with your tax return if your assets are above a set threshold, again, the penalties for non compliance are severe.

Bob

6% on selling a house, split between your and buyers realtor....that's a wedge of change on a $800k+ house...and you'll not get much house out in the Concord area. Definitely want to check out property taxes. Can easily be $20k+ for some of those towns.

PetrifiedExPat

Hear between my friends and colleagues states that the property tax I pay is cheap for Boston surrounding area, and is ~13,000 USD/year for ~1,050,000 property (just zillowed it).

bostonwilly

Ouch! Foreign currency gain sounds expensive. Do they also charge this tax if I convert any currency into dollars, e.g. will I get a tax by converting the sale £s of my UK house into $?

CGT also sounds expensive compared to the UK, so all in all I think we'll be a lot better off selling the house whilst we're in the UK.

I'm going to try and do some estimations for the above.

6% is a large amount, I'd not fully appreciated that. Something to think about.

I presume property tax is only paid by the owner not the occupant? Does the occupant have to pay any house-related tax?

Cheers

tht

If you are taking about a house/apt yes the owner pays (if you have a mortgage the bank are likely to escrow it to make sure it’s paid). If you rent it is “included” in your rent, if your a landlord you pay it and bake it in to the rent, not sure about MA, in CT you also pay it on other property like your cars! That was not the case in NYC but they got you with city tax instead. Other states like NH (next to MA) have no income tax but collect their revenue via property tax. This all used to be deductible via a federal SALT deduction… now that’s capped at $10k. Which does not go far in the NE, but so if this was offset by higher standard deductible and lowering of the tax rate.