Nigelinusa

I know this question has been answered in the part (2007)... but i'm looking for a more recent update (please).

I moved to the US approx 18 months ago and now have my green card. On leaving the UK I rented my house (UK domestic residence) ands have subsequently bought a place in Cincinnati.

I've been told that I may want to sell my UK propoerty soonm (next 12 months), to avoid having to pay US Capital Gains tax. Anybody know about this and who should I seek advice from (H& R Block ??).

I've enjoying the last 18 months and working & living the dream.
Cheers, N.

EricK

According to the advice I was given by my employers Tax lawyers, Ernst & Young, I would be liable for CGT in the US on my UK property once I had been resident in the US for more than 3 years.

Michael

The issue is that sale of your primary residence (any residence that was your primary residence for 2 of the past 5 years) has a $250,000 ($500,000 if married and filing jointly) capital gains exemption.

http://www.thinkglink.com/article/20...n-in-home-sale

avanutria

We'll be hiring someone to do our 2010 taxes for this very reason - can anyone recommend a good company that understands foreign residence stuff and won't break the bank?

sambapink

Wow.. the sale of our UK house is just going through. We have been in the States for 3 years (July 2007) Hope we are ok (just!)

Michael

You must have been absent from class on the day that H&R block was going over that exemption. Hopefully you will be able to claim the house as your primary residence through a date later in 2007.

sambapink

HR Block is past and painful memory..

porvera

What is the CGT %, after the allowance?

Michael

It is currently a maximum of 15% (possibly 20% in 2010 if tax reductions are repealed for high income taxpayers). However, there is also an Alternate Minimum Tax (AMT) that can possibly kick in if you itemize deductions

dunroving

I wish I could make a capital gain of $250,000 ... surely these thresholds don't apply to most regular people (i.e., most people wouldn't make a capital gain anywhere near this big)?

Michael

Most don't but if you lived in California or several New England cities and owned a home since the 1980s, you could easily have capital gains exceeding the exemption (even the $500,000 exemption).

porvera

Actually 15% or even 20% is not as bad as 40% in the UK.

Although no one likes to pay tax and CGT is a particularly unfair one. A bit like death duties. It seems to be pretty fair in the USA.

im9907620

The new UK CGT position is this:
For gains not covered by entrepreneurs' relief, individuals will continue to pay CGT at 18% where your total taxable income and gains are below the upper limit of the income tax basic rate band (£37,400 for 2010/11). Gains will be calculated as before, net of available capital losses and the annual exemption (£10,100). The new 28% rate applies to gains above that limit.

There is also lettings relief of £40,000 and you can claim the last 3 years as having lived there subject to making that nomination. All in all, probably not a lot of UK tax to worry about for most folk, just the US rates.

penguinbar

Contact Pete Newton. I found him on here and he did a great job with our taxes. My husband still has a house in Scotland that gets rented out and we had to do a UK self assesment return as well. http://www.doug-tax.com/

penguinbar

Amen to that! About 15 years ago they really screwed up on my taxes. Luckily I caught the mistake before they were filed!