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Hopefully Simple CGT Shares Question

Hopefully Simple CGT Shares Question

Old Oct 25th 2012, 8:14 am
  #1  
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Default Hopefully Simple CGT Shares Question

Hello, I have just been offered a job in Birmingham AL, local hire, fully liable for US taxes.

Most of my assets are in the form of shares, no property, and my question is:

Would the basis for the gains on my shares in the US be their value on the date when I become a permanent resident? Or is it based on the difference between the original share purchase price and the selling price, whenever that will be?

I assume it is the latter, and that since the shares are in GBP, the difference in GBP is firstly calculated, and the gain converted to USD.

The issue is especially important to me because I currently live in a country (not UK) with no CGT on shares, and so I am assuming it is in my favour to sell all my shares that have made a gain and keep all those with a loss before taking up US residency...

I recognise I need some professional tax advice, but anyone with an appreciation of my situation and could give a short overview would be greatly appreciated.

Thanks,
Rob

Last edited by collardgreens; Oct 25th 2012 at 8:53 am.
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Old Oct 25th 2012, 11:36 am
  #2  
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Default Re: Hopefully Simple CGT Shares Question

Originally Posted by collardgreens View Post
Hello, I have just been offered a job in Birmingham AL, local hire, fully liable for US taxes.

Most of my assets are in the form of shares, no property, and my question is:

Would the basis for the gains on my shares in the US be their value on the date when I become a permanent resident? Or is it based on the difference between the original share purchase price and the selling price, whenever that will be?

I assume it is the latter, and that since the shares are in GBP, the difference in GBP is firstly calculated, and the gain converted to USD.

The issue is especially important to me because I currently live in a country (not UK) with no CGT on shares, and so I am assuming it is in my favour to sell all my shares that have made a gain and keep all those with a loss before taking up US residency...

I recognise I need some professional tax advice, but anyone with an appreciation of my situation and could give a short overview would be greatly appreciated.

Thanks,
Rob
I don't pretend to be an expert on this and suggest you do get advice on this, however, from dealing with my own finances, I believe it to be the difference in USD between the buying and the selling price. The US isn't really setup for foreign transactions and IIRC you report the purchase price in USD (at the time you bought them) and you report the sale price in USD (at the time you sell them). This exposes them to currency fluctations in the dollar (which can be beneficial, but can also not be). You'd have to seek advice on whether if you'd held them for a long time you can report the net profit/loss in GBP and convert that to USD rather than converting the purchase/sale price which may yield a different answer.

Also, as soon as you become considered a resident for tax purposes, you need to file an FBAR if you have accounts or signatory on investments that total over $10k at any point in any given year.
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Old Oct 25th 2012, 5:41 pm
  #3  
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Default Re: Hopefully Simple CGT Shares Question

Originally Posted by collardgreens View Post
The issue is especially important to me because I currently live in a country (not UK) with no CGT on shares, and so I am assuming it is in my favour to sell all my shares that have made a gain and keep all those with a loss before taking up US residency...
If you can sell with no CGT do it before you become US tax resident. You should also research the implications of owning foreign shares and particularly mutual funds and trusts when you become US tax resident
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