Go Back  British Expats > Living & Moving Abroad > USA
Reload this Page >

tax liability selling UK house while living in USA.

tax liability selling UK house while living in USA.

Old Feb 9th 2012, 1:57 pm
  #1  
Just Joined
Thread Starter
 
Joined: Nov 2010
Posts: 10
alex jb is an unknown quantity at this point
Default tax liability selling UK house while living in USA.

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?
alex jb is offline  
Old Feb 9th 2012, 4:37 pm
  #2  
Rootbeeraholic
 
Joined: Aug 2009
Location: Houston, Tx
Posts: 2,280
Bink has a reputation beyond reputeBink has a reputation beyond reputeBink has a reputation beyond reputeBink has a reputation beyond reputeBink has a reputation beyond reputeBink has a reputation beyond reputeBink has a reputation beyond reputeBink has a reputation beyond reputeBink has a reputation beyond reputeBink has a reputation beyond reputeBink has a reputation beyond repute
Default Re: tax liability selling UK house while living in USA.

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.

Last edited by Bink; Feb 9th 2012 at 4:38 pm. Reason: oops
Bink is offline  
Old Feb 9th 2012, 7:12 pm
  #3  
Just Joined
Thread Starter
 
Joined: Nov 2010
Posts: 10
alex jb is an unknown quantity at this point
Default Re: tax liability selling UK house while living in USA.

Originally Posted by Bink View Post
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.
Thanks for the reply,
Is the tax on the gross sale price, or the net after mortgage repayment?
alex jb is offline  
Old Feb 9th 2012, 7:22 pm
  #4  
Rootbeeraholic
 
Joined: Aug 2009
Location: Houston, Tx
Posts: 2,280
Bink has a reputation beyond reputeBink has a reputation beyond reputeBink has a reputation beyond reputeBink has a reputation beyond reputeBink has a reputation beyond reputeBink has a reputation beyond reputeBink has a reputation beyond reputeBink has a reputation beyond reputeBink has a reputation beyond reputeBink has a reputation beyond reputeBink has a reputation beyond repute
Default Re: tax liability selling UK house while living in USA.

Originally Posted by alex jb View Post
Thanks for the reply,
Is the tax on the gross sale price, or the net after mortgage repayment?
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.
Bink is offline  
Old Feb 9th 2012, 8:02 pm
  #5  
 
Joined: Aug 2004
Location: Eugene, OR
Posts: 1,352
avanutria has a reputation beyond reputeavanutria has a reputation beyond reputeavanutria has a reputation beyond reputeavanutria has a reputation beyond reputeavanutria has a reputation beyond reputeavanutria has a reputation beyond reputeavanutria has a reputation beyond reputeavanutria has a reputation beyond reputeavanutria has a reputation beyond reputeavanutria has a reputation beyond reputeavanutria has a reputation beyond repute
Default Re: tax liability selling UK house while living in USA.

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.
avanutria is offline  
Old Feb 9th 2012, 8:16 pm
  #6  
Bob
BE Site Lead
 
Bob's Avatar
 
Joined: Aug 2004
Location: MA, USA
Posts: 91,727
Bob has a reputation beyond reputeBob has a reputation beyond reputeBob has a reputation beyond reputeBob has a reputation beyond reputeBob has a reputation beyond reputeBob has a reputation beyond reputeBob has a reputation beyond reputeBob has a reputation beyond reputeBob has a reputation beyond reputeBob has a reputation beyond reputeBob has a reputation beyond repute
Default Re: tax liability selling UK house while living in USA.

Originally Posted by avanutria View Post
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.
Yup, but does not include cost of maintenance to the property.
Bob is offline  
Old Feb 9th 2012, 8:37 pm
  #7  
Forum Regular
 
Joined: Aug 2011
Location: Dallas, Tx
Posts: 63
deftoneuk is on a distinguished road
Default Re: tax liability selling UK house while living in USA.

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!
deftoneuk is offline  
Old Feb 9th 2012, 10:03 pm
  #8  
 
lansbury's Avatar
 
Joined: Apr 2005
Location: Milwaukie, Oregon
Posts: 9,471
lansbury has a reputation beyond reputelansbury has a reputation beyond reputelansbury has a reputation beyond reputelansbury has a reputation beyond reputelansbury has a reputation beyond reputelansbury has a reputation beyond reputelansbury has a reputation beyond reputelansbury has a reputation beyond reputelansbury has a reputation beyond reputelansbury has a reputation beyond reputelansbury has a reputation beyond repute
Default Re: tax liability selling UK house while living in USA.

Originally Posted by deftoneuk View Post
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!
Contact Peter Newton http://www.britishexpatstax.com if you are having problems.
lansbury is offline  
Old Feb 10th 2012, 3:31 am
  #9  
Senior Member
 
penguinbar's Avatar
 
Joined: Apr 2008
Location: Manhattan
Posts: 2,913
penguinbar has a reputation beyond reputepenguinbar has a reputation beyond reputepenguinbar has a reputation beyond reputepenguinbar has a reputation beyond reputepenguinbar has a reputation beyond reputepenguinbar has a reputation beyond reputepenguinbar has a reputation beyond reputepenguinbar has a reputation beyond reputepenguinbar has a reputation beyond reputepenguinbar has a reputation beyond reputepenguinbar has a reputation beyond repute
Default Re: tax liability selling UK house while living in USA.

Originally Posted by lansbury View Post
Contact Peter Newton http://www.britishexpatstax.com if you are having problems.
+1
penguinbar is offline  
Old Feb 10th 2012, 2:22 pm
  #10  
Just Joined
Thread Starter
 
Joined: Nov 2010
Posts: 10
alex jb is an unknown quantity at this point
Default Re: tax liability selling UK house while living in USA.

Originally Posted by Bob View Post
Yup, but does not include cost of maintenance to the property.
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
alex jb is offline  

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Contact Us - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service - Do Not Sell My Personal Information

Copyright © 2018 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.