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USA home sale / Capital Gains ?

USA home sale / Capital Gains ?

Old Jan 10th 2024, 3:56 pm
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Default USA home sale / Capital Gains ?

I am going to sell my home in California and am confused as to how the capital gains tax will play out with the UK .. I will get a $250K CG allowance in the USA as a single individual . Does anyone know if the UK will recognize the $250K allowance and only charge the difference in UK/USA CG % on the amount over my USA allowance . I am a dual citizen and have been primary resident in the UK for two years. How does this work ? Anyone any experience with this?


My other question is, due to the different tax years , my USA home might sell before April 2024 and the sale will not show on my USA 2023 tax return. I know I will have to declare the sale for my UK 23/24 tax year . Will that mean that I will be charged at a higher UK CG rate for 23/24 without the benefit of the USA 250K CG allowance? Am I better waiting to sell my home after April 2024 in order for the sale to show on my 2024 USA tax return where the 250K allowance will have been applied for the final figure?

I apologize in advance if this is unclear. This tax situation for the two countries is overwhelming at times which is one of the reasons I’ve decieded to sell my USA home rather than rent even though it has been nice to have to return 2 - 3 months a year ..

If anyone can help with info, I do appreciate.. Durham Lad ????
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Old Jan 10th 2024, 7:01 pm
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Default Re: USA home sale / Capital Gains ?

Originally Posted by countrygirl33
I am going to sell my home in California and am confused as to how the capital gains tax will play out with the UK .. I will get a $250K CG allowance in the USA as a single individual . Does anyone know if the UK will recognize the $250K allowance and only charge the difference in UK/USA CG % on the amount over my USA allowance . I am a dual citizen and have been primary resident in the UK for two years. How does this work ? Anyone any experience with this?


My other question is, due to the different tax years , my USA home might sell before April 2024 and the sale will not show on my USA 2023 tax return. I know I will have to declare the sale for my UK 23/24 tax year . Will that mean that I will be charged at a higher UK CG rate for 23/24 without the benefit of the USA 250K CG allowance? Am I better waiting to sell my home after April 2024 in order for the sale to show on my 2024 USA tax return where the 250K allowance will have been applied for the final figure?

I apologize in advance if this is unclear. This tax situation for the two countries is overwhelming at times which is one of the reasons I’ve decieded to sell my USA home rather than rent even though it has been nice to have to return 2 - 3 months a year ..

If anyone can help with info, I do appreciate.. Durham Lad ????
If it's your primary residence, is CGT even due under UK tax regulations?
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Old Jan 10th 2024, 7:24 pm
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Default Re: USA home sale / Capital Gains ?

Well, when I did my UK taxes for past two years , my UK accountant used my UK address as primary . My USA accountant used my USA as primary . I explained to both accountants my situation that I owned a home in USA but was moving back to UK and I have been in UK approx 9 - 10 months this past two years . Thanks for trying to understand this
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Old Jan 10th 2024, 9:01 pm
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Default Re: USA home sale / Capital Gains ?

Originally Posted by countrygirl33
Well, when I did my UK taxes for past two years , my UK accountant used my UK address as primary . My USA accountant used my USA as primary . I explained to both accountants my situation that I owned a home in USA but was moving back to UK and I have been in UK approx 9 - 10 months this past two years . Thanks for trying to understand this
You should check with your accountant, but I think that the UK prorates the gain and only charges CGT on the periods when it wasn't your primary residence, or otherwise exempt from CGT (there are other reasons, other than it being your primary residence).

So if you bought a house in 2003 for $400k and moved into it as your primary residence immediately, and you then moved out of it in 2022 and sold it in 2023 for $1.4million, you would deduct $950k from the gain because it was your primary residence. At that is how it used to work, so you just need to ask your accountant if CGT is still calculated like that. And that is just a very simple example - you can also deduct selling expenses and capital improvements, such as adding a garage or deck, though not repairs, such as replacing the kitchen cabinets.

Last edited by Pulaski; Jan 10th 2024 at 9:06 pm.
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Old Jan 11th 2024, 12:56 am
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Default Re: USA home sale / Capital Gains ?

Thank you Pulaski
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