alex jb

Hi all,

anyone point me to info on taxation for a UK property sale while living in USA?

We have been here in the US for 4 years on L1-A visa and are about to embark on the green card process, It is likely once the applications are in we will start to sell our UK house.

Will I pay tax on the sale in the UK then pay again in USA?

Bink

I can tell you about this in a week or so...
Currently filing my 2011 tax returns and sold my UK house last year. About to figure out what tax I'm paying on it. I'm hoping I've read the rules right and since I lived there for more than 2 of the last 5 years, that I won't be taxed on it...
It might depend on the exchange rates too. I'm in the position where in the UK I sold at a small profit, but due to the exchange rate difference between now and when I bought, in USD it would show as a loss...

Sorry - just re-read your post. I think if it's been rented for 4 years and you haven't lived in it for 2 out of the past 5 years, you will be required to pay tax on it if you made a profit.

alex jb

Thanks for the reply,
Is the tax on the gross sale price, or the net after mortgage repayment?

Bink

Based on my research I "think" it's based on the profit made on the house (sale price - purchase price). I.e the non-taxed portion of the equity as the mortgage payments you made to increase equity in the house should have been taxed in one form or another.
I'm by no means an expert in this area but this is my interpretation of it.

avanutria

I also think it's based on the profit...sale price minus purchase price and also minus any costs of upgrades, renovations and selling expenses. But I'm not an expert either and in our situation there was no renting/long absence involved.

Bob

Yup, but does not include cost of maintenance to the property.

deftoneuk

Is there anything more confusing than the US tax system? Im still trying to work out if I need to pay tax on my income this year, and I have been researching for weeks!

lansbury

Contact Peter Newton http://www.britishexpatstax.com if you are having problems.

penguinbar

+1

alex jb

Greast info from all you guys, thanks!

I was thinking (dreading more like) the tax being applied to the net after morgage replayent.
We own about 50% of the house, the bank owns the other, tax on 50% (owned portion) of the house at sale would be a lot greater than tax on purchase - sale price. I think purchase - sale = < 20% profit