Aaarrrggg

Our plan was to;
> get my visa (interview on Tues!)
> take a trip over to the states and start renting
> come back and get everything packed up
> and then leave the empty house on the market for the estate agent to deal with (We figured it would be easier to sell without us and the dogs stinking up the place.)

BUT I just read that visiting the states would activate my permanent residence and therefore I'd have to pay tax to the US for the house sale... is that right?

meauxna

No, it means that as a PR, you may be liable for capital gains tax, if it applies to your situation.
If your spouse is a US citizen, same deal for her/him.

Aaarrrggg

This website says;

The first point sounds like we will have to pay; because our main home will be rented accommodation in the states... but the last point makes it sound like we won't as long as we sell it within 3yrs?!

Hmmm I'll get my husband to ask his estate agent friend of the family. Thankyou very much for the clarification, it helps immensely to know what sort of tax to ask about.

meauxna

I think the point is, you will be a United States tax resident; you need to look at the IRS' rules on 'capital gains' on a home sale.

henryh

If you have an immigrant visa in your passport, can you still visit the US on the VWP and choose not to "activate" the visa?

meauxna

I don't believe so, no.

Jerseygirl

I seem to remember when we sold our house 12 yrs ago we were allowed 3 years to sell the UK house because it had been our main residence. Whether that still applies I don't know.

MsElui

you can also get tax relief on the mortgage interest of your main residence. If your renting in the US then your main is the UK one - and you can claim it on that. We actually changed our UK mortgage to an interest only one when we came here to take full advantage of that. now we have bought here- this is the main so we get any relief on this mortgages interest. Check this out carefully before doing it yourself though as rules may have changed.

BritishGuy36

Unless the house is worth a lot then it's not going to matter, as the proceeds won't be enough to pay CGT.

As long as it's sold within 3 years, you'll be ok. It was your primary residence when you were there, which is what they are looking at.

The only possible spanner I can see is if you were using a part of the house exclusively for business purposes. That introduces a complication as far as UK CGT is concerned.

Englishman in Eugene

Are you planning to keep the money as liquid funds when the house sells, or use the money to buy a US house?

We are selling our UK house (home and primary residence for the past 15 years) and currently renting in the US, and when we have the house sold using part of the proceeds to buy a US house (already in the process here too).

If the profit on the old sale less the cost of the new house exceeded $500,000 then I think we'd be liable for Capital Gains Tax, but it won't.

Aaarrrggg

Our UK house will hopefully go for around £300K (~$480K) We're going to invest the money in some stocks so it can generate some money while we rent, but will be easy to access when its time to buy our US home (we're guessing about 6mths after we get to Austin.)

It sounds like we'll be ok then; I'll still do some investigating before I land in the US to declare my PR though. I'll be back to post my findings, thanks guys!

big_fish

A couple filing married jointly is exempt capital gains tax up to $500k gain on main residence. There may be some requirements regarding how long you've lived there (can't remember).

Here's the link to the relevant IRS page http://www.irs.gov/publications/p523/ar02.html

As you'll see, providing you've owned & lived in the house for 2 out of the last 5 years then you're fine. (This matches up with what others said above about having 3 yrs to sell up)