Should I sell my house/ISAs/kitchen sink etc. before moving to the US
#1
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Joined: Dec 2015
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Should I sell my house/ISAs/kitchen sink etc. before moving to the US
Hi
I'm looking to move to the US in the next year or 2 with my family (wife is a US citizen) I fully own my house and we intend living there till we move, I'm aware UK CGT laws now give me 18 months to sell without getting taxed but unsure what the tax implications might be if we wait for a more favourable market and sell say 1 year after we move and I've become a US resident?
Assume if we sell before we move then when I eventually transfer the funds to the US there would be no issue with that, bar the transfer costs as again I might want to wait for a more favourable exchange rate.
Also I just found out about PIFC rules and that my various ISAs (one managed at Nutmeg and another is a Stocks and Shares ISA) might get heavily penalised when I move to the US so wondering if I need to cash all of those in before I become a resident too.
Finally, given all the above, I'm clearly going to need some tax advice/financial planning guidance so if anyone can recommend some good accountants with the relevant UK/US tax experience that would be greatly appreciated.
Cheers
Si
I'm looking to move to the US in the next year or 2 with my family (wife is a US citizen) I fully own my house and we intend living there till we move, I'm aware UK CGT laws now give me 18 months to sell without getting taxed but unsure what the tax implications might be if we wait for a more favourable market and sell say 1 year after we move and I've become a US resident?
Assume if we sell before we move then when I eventually transfer the funds to the US there would be no issue with that, bar the transfer costs as again I might want to wait for a more favourable exchange rate.
Also I just found out about PIFC rules and that my various ISAs (one managed at Nutmeg and another is a Stocks and Shares ISA) might get heavily penalised when I move to the US so wondering if I need to cash all of those in before I become a resident too.
Finally, given all the above, I'm clearly going to need some tax advice/financial planning guidance so if anyone can recommend some good accountants with the relevant UK/US tax experience that would be greatly appreciated.
Cheers
Si
#2
Re: Should I sell my house/ISAs/kitchen sink etc. before moving to the US
I thought house prices were going down in the UK. If so now is as good as any to sell.
#3
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Re: Should I sell my house/ISAs/kitchen sink etc. before moving to the US
A lot can happen to the market in 2-3 years and don't really want to sell up and move the family into rented accommodation for the remainder of the time, I'd like to avoid as much disruption as possible especially as we have another child on the way! Given I have no mortgage and rental rates in London it'll likely cost me more money to rent for a year or so than I'd potentially lose if house prices dropped slightly.
#4
Re: Should I sell my house/ISAs/kitchen sink etc. before moving to the US
Maybe they're falling elsewhere, but certainly not where I am. They've been rising steadily here (or more than steadily actually, we've just had ours valued 6 years after buying it and it's increased a ludicrous amount!). Who knows what Brexit will do to the housing market though.......
#5
Re: Should I sell my house/ISAs/kitchen sink etc. before moving to the US
When I left I sold my UK home to avoid the CGT complications (UK & US), and it was easier to arrange a sale before leaving than doing it remotely. It went on the market shortly before leaving, but the sale did not complete until after I left. However that was not an issue as the real estate agent and the solicitor could conclude the sale without me being present. This way I could stay in my own home until the end.
Moving money should not be a problem after the sale, I moved the proceeds of my home and my UK savings to the US to fund this house (about 3 years after coming here). The only issue I had was that I had to show to the US mortgage bank the paper trail of the money to prove that it was mine as I moved it too close to the closing date. My advice would be to move all UK money to the US just after you arrive.
Selling up the ISAs is painful emotionally but makes US life less stressful. Best to just do it.
Moving money should not be a problem after the sale, I moved the proceeds of my home and my UK savings to the US to fund this house (about 3 years after coming here). The only issue I had was that I had to show to the US mortgage bank the paper trail of the money to prove that it was mine as I moved it too close to the closing date. My advice would be to move all UK money to the US just after you arrive.
Selling up the ISAs is painful emotionally but makes US life less stressful. Best to just do it.
#6
Re: Should I sell my house/ISAs/kitchen sink etc. before moving to the US
When I left I sold my UK home to avoid the CGT complications (UK & US), and it was easier to arrange a sale before leaving than doing it remotely. It went on the market shortly before leaving, but the sale did not complete until after I left. However that was not an issue as the real estate agent and the solicitor could conclude the sale without me being present. This way I could stay in my own home until the end.
..... My advice would be to move all UK money to the US just after you arrive.
Selling up the ISAs is painful emotionally but makes US life less stressful. Best to just do it.
..... My advice would be to move all UK money to the US just after you arrive.
Selling up the ISAs is painful emotionally but makes US life less stressful. Best to just do it.
#7
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Joined: Dec 2015
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Re: Should I sell my house/ISAs/kitchen sink etc. before moving to the US
When I left I sold my UK home to avoid the CGT complications (UK & US), and it was easier to arrange a sale before leaving than doing it remotely. It went on the market shortly before leaving, but the sale did not complete until after I left. However that was not an issue as the real estate agent and the solicitor could conclude the sale without me being present. This way I could stay in my own home until the end.
Moving money should not be a problem after the sale, I moved the proceeds of my home and my UK savings to the US to fund this house (about 3 years after coming here). The only issue I had was that I had to show to the US mortgage bank the paper trail of the money to prove that it was mine as I moved it too close to the closing date. My advice would be to move all UK money to the US just after you arrive.
Selling up the ISAs is painful emotionally but makes US life less stressful. Best to just do it.
Moving money should not be a problem after the sale, I moved the proceeds of my home and my UK savings to the US to fund this house (about 3 years after coming here). The only issue I had was that I had to show to the US mortgage bank the paper trail of the money to prove that it was mine as I moved it too close to the closing date. My advice would be to move all UK money to the US just after you arrive.
Selling up the ISAs is painful emotionally but makes US life less stressful. Best to just do it.
Thanks for the info, did it matter that you received the proceeds of the sale after you became resident in the US, just wondering in case I put it up for sale and it doesn't sell till say 3 months after I move to the US if that causes an issue if I get the proceeds of the sale after I'm technically a US resident?
I nearly cried when I read about the PIFC stuff, shot my retirement income plans all to hell!
Thanks
Si
#8
Re: Should I sell my house/ISAs/kitchen sink etc. before moving to the US
Hi
Thanks for the info, did it matter that you received the proceeds of the sale after you became resident in the US, just wondering in case I put it up for sale and it doesn't sell till say 3 months after I move to the US if that causes an issue if I get the proceeds of the sale after I'm technically a US resident?
I nearly cried when I read about the PIFC stuff, shot my retirement income plans all to hell!
Thanks
Si
Thanks for the info, did it matter that you received the proceeds of the sale after you became resident in the US, just wondering in case I put it up for sale and it doesn't sell till say 3 months after I move to the US if that causes an issue if I get the proceeds of the sale after I'm technically a US resident?
I nearly cried when I read about the PIFC stuff, shot my retirement income plans all to hell!
Thanks
Si
#9
Re: Should I sell my house/ISAs/kitchen sink etc. before moving to the US
Do note that once one becomes a US permanent resident, US taxes law applies. The US taxes WORLDWIDE income.
#11
Re: Should I sell my house/ISAs/kitchen sink etc. before moving to the US
I'd definitely sell the house before you move to the US. It just makes things simpler and you won't be working against a clock to get the US capital gains tax allowance or have to deal with exchange rate gains.
The ISA is trickier.....how long do you intend to stay in the US?
The ISA is trickier.....how long do you intend to stay in the US?
#12
Re: Should I sell my house/ISAs/kitchen sink etc. before moving to the US
The CGT on the house is irrelevant really, it only applies from the point it ceased to be your principal residence iiuc. What is the capital gain going to be over a couple of years for example, doesn't matter. The IRS does consider exchange rate gains to be income though, although if Sterling does down any further I doubt you're going to be moving.
Definitely get rid of the ISAs if you're going to be in the US for any length of time, that one is a no-brainer. The US taxes them, they're very complex to report, they're supposed to be a benefit for UK tax residents only, and the list goes on frankly. If you've got a SIPP they're recognized under the tax treaty.
As far as tax planning advice goes, read IRS Publication 519. https://www.irs.gov/pub/irs-pdf/p519.pdf Especially the bit on dual-status aliens.
Definitely get rid of the ISAs if you're going to be in the US for any length of time, that one is a no-brainer. The US taxes them, they're very complex to report, they're supposed to be a benefit for UK tax residents only, and the list goes on frankly. If you've got a SIPP they're recognized under the tax treaty.
As far as tax planning advice goes, read IRS Publication 519. https://www.irs.gov/pub/irs-pdf/p519.pdf Especially the bit on dual-status aliens.
#13
Re: Should I sell my house/ISAs/kitchen sink etc. before moving to the US
No that's not how US CGT works. After the third anniversary of you moving out you would pay CGT on the gain during your period of ownership, plus potentially a gain on the repayment of the loan. The only difference if you sell before the third anniversary of you moving out is that the first $250,000/ $500,000 (depending on whether you file taxes singly or jointly) of the gain is not taxed. In other words if you are subject to tax in the US, CGT does apply, from the date you acquired it but if you lived in the house as your primary home during any part of the 36 months before you sold then the first $250,000/$500,000 of the gain isn't taxed.
#14
Re: Should I sell my house/ISAs/kitchen sink etc. before moving to the US
No that's not how US CGT works. After the third anniversary of you moving out you would pay CGT on the gain during your period of ownership, plus potentially a gain on the repayment of the loan. The only difference if you sell before the third anniversary of you moving out is that the first $250,000/ $500,000 (depending on whether you file taxes singly or jointly) of the gain is not taxed. In other words if you are subject to tax in the US, CGT does apply, from the date you acquired it but if you lived in the house as your primary home during any part of the 36 months before you sold then the first $250,000/$500,000 of the gain isn't taxed.
#15
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Joined: Dec 2015
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Re: Should I sell my house/ISAs/kitchen sink etc. before moving to the US
I'd definitely sell the house before you move to the US. It just makes things simpler and you won't be working against a clock to get the US capital gains tax allowance or have to deal with exchange rate gains.
The ISA is trickier.....how long do you intend to stay in the US?
The ISA is trickier.....how long do you intend to stay in the US?