Tax on shares sold in UK
Feb 14th 2008, 8:05 pm
#1
BE Enthusiast
Thread Starter
Joined: May 2005
Location: San Diego, CA
Posts: 349
Tax on shares sold in UK
Hi,
My husband and I sold some shares last summer - some of which we got through a company SAYE scheme and some of which were from an approved company share option scheme. Reading through all the rules on the UK inland revenue site, if we still lived in the UK we would not be liable for any UK tax on this since the amounts are less that the capital gains tax thresholds, however if I include them in our US tax return it leaves us owing quite a bit of tax
I am not sure if we can therefore still include these on a UK tax return and therefore leave them off the US one. I am still being asked by the UK tax office to file a return each year as we are also still renting our house out over there but my husband has been told that his UK tax file has been closed. We have been here just over two and half years.
I have struggled to find anyone with enough knowledge of both tax systems to help, so if anyone here knows the answer, I will be very grateful.
My husband and I sold some shares last summer - some of which we got through a company SAYE scheme and some of which were from an approved company share option scheme. Reading through all the rules on the UK inland revenue site, if we still lived in the UK we would not be liable for any UK tax on this since the amounts are less that the capital gains tax thresholds, however if I include them in our US tax return it leaves us owing quite a bit of tax
I am not sure if we can therefore still include these on a UK tax return and therefore leave them off the US one. I am still being asked by the UK tax office to file a return each year as we are also still renting our house out over there but my husband has been told that his UK tax file has been closed. We have been here just over two and half years.
I have struggled to find anyone with enough knowledge of both tax systems to help, so if anyone here knows the answer, I will be very grateful.
Feb 14th 2008, 8:35 pm
#2
Forum Regular
Joined: Oct 2007
Location: North Carolina
Posts: 68
Re: Tax on shares sold in UK
This is how I understand it:-
You should only be paying tax in the country you have setup as your permanent residence.
2 and a half years ago you should have filed a P85 will the IR and then declared your rental income with the IRS using form F2555. You can own property in the UK and be living in the USA, but anything coming in would have to be declared as Foreign Earned Income (F2555).
As far the shares, the US does recognise some of the Tax scenarios coming from the UK, with the Tax Treaty. You may get away with it with the IRS, but thats the small print.
Hope some of that helps.
Darren
You should only be paying tax in the country you have setup as your permanent residence.
2 and a half years ago you should have filed a P85 will the IR and then declared your rental income with the IRS using form F2555. You can own property in the UK and be living in the USA, but anything coming in would have to be declared as Foreign Earned Income (F2555).
As far the shares, the US does recognise some of the Tax scenarios coming from the UK, with the Tax Treaty. You may get away with it with the IRS, but thats the small print.
Hope some of that helps.
Darren
Last edited by YankeeDaz; Feb 14th 2008 at 8:38 pm.
Feb 14th 2008, 9:06 pm
#3
BE Enthusiast
Joined: Feb 2006
Location: Maryland
Posts: 667
Re: Tax on shares sold in UK
This is how I understand it:-
You should only be paying tax in the country you have setup as your permanent residence.
2 and a half years ago you should have filed a P85 will the IR and then declared your rental income with the IRS using form F2555. You can own property in the UK and be living in the USA, but anything coming in would have to be declared as Foreign Earned Income (F2555).
As far the shares, the US does recognise some of the Tax scenarios coming from the UK, with the Tax Treaty. You may get away with it with the IRS, but thats the small print.
Hope some of that helps.
Darren
You should only be paying tax in the country you have setup as your permanent residence.
2 and a half years ago you should have filed a P85 will the IR and then declared your rental income with the IRS using form F2555. You can own property in the UK and be living in the USA, but anything coming in would have to be declared as Foreign Earned Income (F2555).
As far the shares, the US does recognise some of the Tax scenarios coming from the UK, with the Tax Treaty. You may get away with it with the IRS, but thats the small print.
Hope some of that helps.
Darren
Feb 14th 2008, 9:12 pm
#4
BE Enthusiast
Joined: Feb 2006
Location: Maryland
Posts: 667
Re: Tax on shares sold in UK
Hi,
My husband and I sold some shares last summer - some of which we got through a company SAYE scheme and some of which were from an approved company share option scheme. Reading through all the rules on the UK inland revenue site, if we still lived in the UK we would not be liable for any UK tax on this since the amounts are less that the capital gains tax thresholds, however if I include them in our US tax return it leaves us owing quite a bit of tax
I am not sure if we can therefore still include these on a UK tax return and therefore leave them off the US one. I am still being asked by the UK tax office to file a return each year as we are also still renting our house out over there but my husband has been told that his UK tax file has been closed. We have been here just over two and half years.
I have struggled to find anyone with enough knowledge of both tax systems to help, so if anyone here knows the answer, I will be very grateful.
My husband and I sold some shares last summer - some of which we got through a company SAYE scheme and some of which were from an approved company share option scheme. Reading through all the rules on the UK inland revenue site, if we still lived in the UK we would not be liable for any UK tax on this since the amounts are less that the capital gains tax thresholds, however if I include them in our US tax return it leaves us owing quite a bit of tax
I am not sure if we can therefore still include these on a UK tax return and therefore leave them off the US one. I am still being asked by the UK tax office to file a return each year as we are also still renting our house out over there but my husband has been told that his UK tax file has been closed. We have been here just over two and half years.
I have struggled to find anyone with enough knowledge of both tax systems to help, so if anyone here knows the answer, I will be very grateful.
Feb 14th 2008, 9:24 pm
#5
Forum Regular
Joined: Sep 2005
Location: Andover, MA
Posts: 250
Re: Tax on shares sold in UK
I believe you have to declare the gain on your US tax form.
As a US resident (permanent or exceeding 1/2 tax year), you pay tax as if you were a US citizen, on your worldwide income.
[Any UK tax should be (in descending order of priority)
1. avoided in the first place by demonstrating that you're not resident/ordinarily resident in the UK
2. refunded after the event by demonstrating that you're not resident/ordinarily resident in the UK
3. reduced/eliminated by resorting to the US-UK tax treaty
4. offset against US tax owed by claiming Foreign Tax Credit]
As a US resident (permanent or exceeding 1/2 tax year), you pay tax as if you were a US citizen, on your worldwide income.
[Any UK tax should be (in descending order of priority)
1. avoided in the first place by demonstrating that you're not resident/ordinarily resident in the UK
2. refunded after the event by demonstrating that you're not resident/ordinarily resident in the UK
3. reduced/eliminated by resorting to the US-UK tax treaty
4. offset against US tax owed by claiming Foreign Tax Credit]
