UK2toUSA

Hi All,

After reading on internet and going thru lot of posts I am so confused now on weather to sell or rent our house in UK.

Some of the Pros and Cons which I can think of are already giving me headache before we have even move .

Cons
- If we don’t sell then we have to pay CGT whenever we sell our house in the coming years.
- Renting it out and then dealing with letting agents on issues like - repairs , renting, damage etc ,etc
- Having to declare my UK assets to USA govt.
- Have to pay taxes on my UK year rental income.
- Selling house from abroad will be mission impossible .
- Whenever I decide to sell my house I will have to pay other taxes , fees apart from CGT - in UK and in USA.
- Capital gains on any FX benefit arising from repaying your mortgage.
- Dealing with the house insurances from abroad yearly .
- Getting the mortgage going and sorting the right interest rate deals from abroad.
- I am not sure how the tenants will keep our house and how the letting agents will deal with it.
- Filling US &UK returns also keeping track of financial records for 2 countries.
- Changing of letting agent from abroad if we are not happy with the current.

PROS
- Will have a footprint in UK.
- If things don’t work out in USA for us we can always come back to our own house.
- Having a house in London which can be good investment in long run.
- Already onto UK property ladder ( don’t have to start again)

Our friends and family all live in USA . As a family we alone here in UK and the chances of our returning back to UK are very less ( i am sure we will not be back )

Have to make right decision so guys please provide your inputs.. what your thoughts are .

Thanks a lot!!

mrken30

If you are thinking about making large transfers from your bank, make sure you understand if they require any special process. I remember years ago HSBC required me to fax authorization for anything over £10,000

mrken30

Update pension companies of new address in the US. You may be required to file FBAR for these depending on the type and amount.

mrken30

I am assuming it is a recent greencard and that you have not been out of the country for 3 years on a greencard?

petitefrancaise

On the question of whether to sell your house... I think MsElui was the one with the unexpectedly large tax bill for selling her UK house after many years. You could search through some of her posts from about 1 year ago IIRC.

On the other hand, I was recently talking to some Brits who sold their house in the UK after about 20 years of renting it out. They were told of some tax thing where if they use the money to buy another house in the EU then they aren't liable for cgt. They bought a house in the dutch antilles..........about 4 hours flight away. I have no idea of the legality of this, I'm not an accountant but thought it interesting.

Will you need the money to buy a house in the USA? As a new immigrant your credit is non-existent and if you want to buy a house in the first couple of years then you will find it much easier with a large deposit to put down.

Although you will have to declare the income from rent, you get to make a lot of deductions too to reduce the annual tax bill.

Getting input from us lot is all well and good but you could probably do with proper advice from an accountant familiar with UK/USA taxes and with knowledge of your particular situation.

mrken30

This is done through a 1031 exchange. To reduce CGT you would need to buy another non domestic(US) house if you sold your UK house. The exchange requires like for like exchange. There are other rules regarding selling or buying from family, but can't remember those. If you need to no more speak to any reputable title company and they will normally tell you the requirements over the phone or give you a free consultation. 1031 exchanges can be hard to do.

UK2toUSA

Its a recent acquired green card .

Any recommendation on accountant familiar with UK/USA taxes based in UK please

MidAtlantic

NOT a recommendation, because I have never used them but I have seen them recommended by others: American Tax Returns - US and UK Tax Experts Tel: 020 8946 0523

mrken30

You may want to look at this thread http://britishexpats.com/forum/usa-5...dation-868962/

kodokan

Disclaimer - I don't like owning houses much, and prefer the freedom of renting rather than the anchor of ownership. That said, it strikes me that your Cons are generally things that WILL happen, and your Pros are things that MAY happen.

kins

Personally I would sell the house but keep the money in the UK in the hopes that the pound strengthens. I have been a landlord in the past and it was a PITA, despite living in the same town.

mrken30

I have rental property in both the UK and US

Pros: Can get tax deductions for business expenses to check on rental property.
Diversified investment.


Cons: extra work required from a tax perspective . Tax years are different in the UK and US which adds work.
You have to keep up with Landlord laws in the UK, but there are good resources online to keep up to date.
If you have a mortgage , you may end up playing the exchange rate game. Also it may be hard to refinance being a US resident.

CGT is not an issue if you can do a 1031. It basically defers the CGT indefinitely. One thing to consider is do you want to reset the CG by buying a new property before you leave, or are you likely to want to sell the UK property in next 3 years. Prices are high at the moment, so buying another place, you may not have a gain in a few years.

I sold my house while in the US, it's a little harder, I basically have to give my solicitor power of attorney.
Email makes life a lot easier.

It's cheaper to take out a vonage account while in the UK and keep a UK phone number.

Try to find a property manager before leaving. Dealing with property managers in the UK is no harder than dealing with them in the US.

You need to remove any emmotional attachment to the property if you wish to rent it. There will probably be times when tenants misuse the place, but overall you can expense repairs.

If you are not making much cash flow, you should probably sell.

Prices in the US have gone up as much as the UK depending on the city.