Go Back  British Expats > Living & Moving Abroad > USA
Reload this Page >

Capital income tax

Capital income tax

Old Jun 21st 2012, 8:28 pm
  #1  
Just Joined
Thread Starter
 
Joined: Nov 2009
Posts: 19
combo9 is just really nicecombo9 is just really nicecombo9 is just really nicecombo9 is just really nicecombo9 is just really nicecombo9 is just really nicecombo9 is just really nicecombo9 is just really nice
Question 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.
combo9 is offline  
Old Jun 21st 2012, 10:50 pm
  #2  
nun
BE Forum Addict
 
nun's Avatar
 
Joined: Aug 2004
Posts: 4,722
nun has a reputation beyond reputenun has a reputation beyond reputenun has a reputation beyond reputenun has a reputation beyond reputenun has a reputation beyond reputenun has a reputation beyond reputenun has a reputation beyond reputenun has a reputation beyond reputenun has a reputation beyond reputenun has a reputation beyond reputenun has a reputation beyond repute
Default Re: Capital income tax

Originally Posted by combo9 View Post
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.
If you are not UK resident for tax purposes you won't have to pay UK capital gains on on the shares

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.
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.

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.
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

Last edited by nun; Jun 22nd 2012 at 12:14 am.
nun is offline  

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Contact Us - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service - Do Not Sell My Personal Information

Copyright © 2018 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.