Russet

When we sell up in the US we plan to return to our UK home that has been rented out for 10 years. As dual citizens we need to file in both US and UK. I have reviewed the forum and the HMRC/IRS websites. It is our understanding that if we live in the UK house for 2 - 3 years before we sell, we will not be liable to any CGT in USA (on the basis it will be our sole primary residence that we will have lived in for 2 out the previous 5 years with a joint gain of < $500k). However, we understand we will still be liable to some apportioned gain (for the rental period) for CGT in UK, this liability will be further offset by our annual CGT allowance but will not be eliminated. Would be interested to hear other views on if our understanding is correct.

scot47

Asking on a forum like this is the equivalent of going down the pub and asking what your mates think. With the amount of money involved - and at risk - get an accountant or lawyer !

Pulaski

The UK also exempts periods from CGT on your home in the UK when you are "living outside the UK for work purposes". With the caveat that I am not certain how that exemption might interact with CGT on a period while the house is rented, while agreeing with Scot47, that you should get a current professional opinion from a Chartered Accountant in the UK, it is possible that you won't owe any CGT in the UK either.

Russet

Thank you for the advice. I prefer to go to an accountant/lawyer with as much of my own information/research as possible.If I can ask the right questions I hope to get the most out of their fees. In my experience, if you go and ask question 'a' you will get the correct answer but no whatifs or other options. Just prefer to be prepared. The rules can be so random you rarely know what you should be taking into consideration..

Pulaski

You're welcome.
I fully understand and agree - I apply the same principle myself, whether I am talking to a tax account, plumber, doctor, dentist, electrician, etc.
I think that this page has all the information you could possibly need, and more besides. I think the bit you need to focus on, or at least one of the sections, is a fair way down the page in the next full-width paragraph after the subheading 4.6 Example 6, where it lists the reasons for exemption from CGT, which includes periods when you are employed and working wholly outside the UK.

In the US there can be good reasons to consult a tax attorney, but in the UK you will need a Chartered Accountant - this sort of CGT issue is the bread and butter for Chartered Accountants serving private clients.