Capital income tax
 

I am a British citizen living in the USA on a J-1 visa.

I purchased some shares using a USA based brokerage account.

1) When it comes time to liquidate those assets and pay taxes on any capital income, do I need to file those taxes in the USA only or do I pay UK taxes also? I am worried about being taxed twice.

2) Any idea what happens if I return to the UK at the end of the J-1 visa and then liquidate the assets? Am I correct in thinking that I would have to pay UK taxes only in that case? I want to avoid this as I believe this particular US brokerage automatically subtracts tax at the time of liquidation.

3) Does being a resident alien or non-resident alien make any difference? I believe I am treated as a non-resident alien for the first two years of a J-1 and as a resident alien thereafter.

Thanks for any assistance.

Re: Capital income tax
 

If you are not UK resident for tax purposes you won't have to pay UK capital gains on on the shares

You would be taxed on them in the UK. As a NRA you would not be subject to US capital gains. How they are taxed by the UK will depend on the type of the shares. If they are actual shares in a company you will pay capital gain as usual. However, if they are shares in a mutual fund how they are taxed will depend on whether they are "HMRC reporting". If they are you pay capital gain as normal, if they aren't you pay tax at your marginal income tax rate.

yes it does. NRAs do not pay US capital gains, however, if you are a scholar etc, and in the US for longer than 183 days, you come into a special class of NRA and you will be tax at 30%, unless you can apply the UK/US tax treaty to reduce the amount.....

http://www.irs.gov/businesses/small/...129253,00.html