UK House sale / tax question
#1
UK House sale / tax question
Hi all...
In all our preparations for our eventual move over the pond, one of the decisions to be made is to keep our flat in London, or sell it and cash in on it's already vast increase in value.
I'm not looking for opinions on that as such, seen plenty of those on this board to keep me thinking for a while...my question is more one of tax. If we sell the flat before we go, under UK tax laws we wouldn't pay a penny of the profit (since it's our main residence)...however, what is the situation once you've gone....if you then decided to sell once you're happy as Larry in the US, would you be liable for capital gains tax even though you are no longer resident in the UK, and, would you also be liable to pay some of the profit to the IRS in America???
Any advice?
Mike
In all our preparations for our eventual move over the pond, one of the decisions to be made is to keep our flat in London, or sell it and cash in on it's already vast increase in value.
I'm not looking for opinions on that as such, seen plenty of those on this board to keep me thinking for a while...my question is more one of tax. If we sell the flat before we go, under UK tax laws we wouldn't pay a penny of the profit (since it's our main residence)...however, what is the situation once you've gone....if you then decided to sell once you're happy as Larry in the US, would you be liable for capital gains tax even though you are no longer resident in the UK, and, would you also be liable to pay some of the profit to the IRS in America???
Any advice?
Mike
#2
Lost in BE Cyberspace
Joined: Oct 2003
Posts: 22,105
Re: UK House sale / tax question
Originally posted by sohosid
Hi all...
In all our preparations for our eventual move over the pond, one of the decisions to be made is to keep our flat in London, or sell it and cash in on it's already vast increase in value.
I'm not looking for opinions on that as such, seen plenty of those on this board to keep me thinking for a while...my question is more one of tax. If we sell the flat before we go, under UK tax laws we wouldn't pay a penny of the profit (since it's our main residence)...however, what is the situation once you've gone....if you then decided to sell once you're happy as Larry in the US, would you be liable for capital gains tax even though you are no longer resident in the UK, and, would you also be liable to pay some of the profit to the IRS in America???
Any advice?
Mike
Hi all...
In all our preparations for our eventual move over the pond, one of the decisions to be made is to keep our flat in London, or sell it and cash in on it's already vast increase in value.
I'm not looking for opinions on that as such, seen plenty of those on this board to keep me thinking for a while...my question is more one of tax. If we sell the flat before we go, under UK tax laws we wouldn't pay a penny of the profit (since it's our main residence)...however, what is the situation once you've gone....if you then decided to sell once you're happy as Larry in the US, would you be liable for capital gains tax even though you are no longer resident in the UK, and, would you also be liable to pay some of the profit to the IRS in America???
Any advice?
Mike
#3
Re: UK House sale / tax question
Originally posted by AmerLisa
How can you be responsible for capital gains tax if you are no longer a residence of the UK? We sold our home and brought over our considerable equity in our home (couldn't have made the move without it.) I think a lot of people have. I'm not sure about tax over here. The majority of the money we've had, we've had to use to live on, so I'm not sure what taxes we'll have to deal with next year. Should be interesting to find out.
How can you be responsible for capital gains tax if you are no longer a residence of the UK? We sold our home and brought over our considerable equity in our home (couldn't have made the move without it.) I think a lot of people have. I'm not sure about tax over here. The majority of the money we've had, we've had to use to live on, so I'm not sure what taxes we'll have to deal with next year. Should be interesting to find out.
You will only get taxed on the interest your money makes in America. If you bring $100,000 into the country and put it into interest account you will only pay taxes on the interest. If you put it into a house or a car (apart from sales tax on the items) you will not have to pay any taxes.
#4
Account Closed
Joined: Mar 2004
Posts: 2
Re: UK House sale / tax question
You have a theoretical exposure to UK taxes if you keep the house, for the subsequent value it goes up by. May be an issue long term if UK prices go up considerably, but things seem to be flatenning.
You have your annual personal allowances of course.
Assuming you are a Permanent Resident which I think is the category requiring tax on worlwide assets, I am not sure how the US authorities would know, unless you told them.
You have your annual personal allowances of course.
Assuming you are a Permanent Resident which I think is the category requiring tax on worlwide assets, I am not sure how the US authorities would know, unless you told them.
Last edited by scrubbedexpat099; Jul 20th 2004 at 3:35 am.
#5
Re: UK House sale / tax question
Originally posted by Boiler
You have a theoretical exposure to UK taxes if you keep the house, for the subsequent value it goes up by. May be an issue long term if UK prices go up considerably, but things seem to be flatenning.
You have your annual personal allowances of course.
Assuming you are a Permanent Resident which I think is the category requiring tax on worlwide assets, I am not sure how the US authorities would know, unless you told them.
You have a theoretical exposure to UK taxes if you keep the house, for the subsequent value it goes up by. May be an issue long term if UK prices go up considerably, but things seem to be flatenning.
You have your annual personal allowances of course.
Assuming you are a Permanent Resident which I think is the category requiring tax on worlwide assets, I am not sure how the US authorities would know, unless you told them.
Once anyone has lived here for more than 6 months in a calendar year, the chances are that they are "resident for tax purposes" according to the IRS, although there are some additional details to the rule.
#6
Account Closed
Joined: Mar 2004
Posts: 2
Re: UK House sale / tax question
Would the US IRS honour (not sure that is the correct word!) your UK CGT allowance?.
I guess the same goes for your Incomee personal allowance as well.
I guess the same goes for your Incomee personal allowance as well.