CaliforniaBride

I own a house in the UK that I am renting out. I lived in it for 3 years and have been renbting it for about 18 months.

When would I be best advised to sell to avoid CGT?

What would my tax liability be here?

And Don, I'd love some advice, a post of yours in another thread prompted me to post this. BUT I'm NOT selling yet OK?

scrubbedexpat099

You can not avoid CGT, that only applies to your main residence.

The Inland Revenue site is quite good at giving details of the regulations.

There is of course the tax issue on the rental income.

CaliforniaBride

Thanks for the info. I had a look at the IR info. Just wondered if anyone here had direct experience. I will do more digging myself, but it's late and I'm tired and I'm just putting out feelers so to speak.

I rent through a letting agent so the tax issue is dealt with.

scrubbedexpat099

Its not a question that can be answered

You are not going to sell now, the tax rates etc could well be different in the future.

You only of course get taxed on your profits, you would need to make an assumption as what those might be, somewhat tricky in itself.

I assume that you are liable to US taxation, will you be when you realise the gain?

US rules are very different, there is the double taxation treaty which would hopefully kick in, but I do not know.

syllk

Recently a work colleague sold his UK home, and he was not liable for CGT.

Some helpful information can be found here. Generally, it appears that if you are not resident and not ordinarily resident in the UK, you are not liable for CGT when disposing of UK assets, unless:

Big D

You can claim an exemption for CGT for the first X pounds of profit - and you used to be able to roll forward the previous years unused allowance but I think that has changed. Get a valuation from 18 months ago as this is when it stopped being your main residence, rather than the full profit. Now the tough part is that the US will tax the hell out of you - before we came out we were warned by a tax consultant to think very carefully about selling while we are still resident over here. Might be worth talking with some one who knows what they are talking about! I.e. not me!!

scrubbedexpat099

The one thing I did not fathom was whether they used the value when you became liable to US taxation or the acquisition cost.

Something I will ask when we do our annual returns.

warksgirl

Was this home your primary home, which you lived in in the UK, and have rented upon moving here?

Or, was it a second, investment property? Could there be different rates for these different circumstances?