urghh taxes.
#1
L2, GC, Surrey, OH, TX!
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Joined: Aug 2007
Location: Surrey to Dallas (via Ohio)!
Posts: 6,363
urghh taxes.
so our acct finally got round to doing an estimate for our tax bill this year. We sold our UK house in January and knew we would get hit up for capital gains on it as we have been here more than 5 years etc. The bloody estimate is bigger than the savings we had put aside. Its not horrifically over -but its a pain - and if the estimate is low.......
It seems beyond crazy that they can make us pay on a gain that predates our even living in the country. I get that we should pay a gain since the day we lived here (2007) - that is fair, but when we brought that house in 2001 we had no idea we would be moving to the states etc -and that they can hit us up for gains made in that time just seems plain wrong.
It seems beyond crazy that they can make us pay on a gain that predates our even living in the country. I get that we should pay a gain since the day we lived here (2007) - that is fair, but when we brought that house in 2001 we had no idea we would be moving to the states etc -and that they can hit us up for gains made in that time just seems plain wrong.
#2
Re: urghh taxes.
Agreed, and that is why we consistently advise people to sell within three years of arriving here (thereby being exempt from taxation on the gain, unless it is greater than $500,000, for a married couple) unless they are certain they will leave the US before they want/need to sell.
#3
Re: urghh taxes.
So, just to be clear...the exemption doesn't apply to non US property? Or is it only for your main residence perhaps?
#4
Re: urghh taxes.
so our acct finally got round to doing an estimate for our tax bill this year. We sold our UK house in January and knew we would get hit up for capital gains on it as we have been here more than 5 years etc. The bloody estimate is bigger than the savings we had put aside. Its not horrifically over -but its a pain - and if the estimate is low.......
It seems beyond crazy that they can make us pay on a gain that predates our even living in the country. I get that we should pay a gain since the day we lived here (2007) - that is fair, but when we brought that house in 2001 we had no idea we would be moving to the states etc -and that they can hit us up for gains made in that time just seems plain wrong.
It seems beyond crazy that they can make us pay on a gain that predates our even living in the country. I get that we should pay a gain since the day we lived here (2007) - that is fair, but when we brought that house in 2001 we had no idea we would be moving to the states etc -and that they can hit us up for gains made in that time just seems plain wrong.
#5
Re: urghh taxes.
The $250,000/$500,000 Home Sale Tax Exclusion | Nolo.com
#7
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Joined: Apr 2011
Location: The Shire
Posts: 1,117
Re: urghh taxes.
You could try the Boris Johnson approach, although I wouldn't recommend it.
13 November 2014
A transcript excerpt of Boris Johnson's NPR interview is below on the Diana Rehm programme. His appearance was in conjunction with the launch of his book on Churchill.
(Page is Susan Page of USA Today, who was sitting in for Diana Rehm):
13 November 2014
A transcript excerpt of Boris Johnson's NPR interview is below on the Diana Rehm programme. His appearance was in conjunction with the launch of his book on Churchill.
(Page is Susan Page of USA Today, who was sitting in for Diana Rehm):
- PAGE: We have a couple questions relating to you. Here's Peter in Columbia, Md., who sends us an email, he writes, "It's very hard to renounce US citizenship. Has your guest done so or is he a dual citizen, having been born in New York?"
- JOHNSON: Peter, I have to confess to you, that you're right, it is a very, it is very hard but I will say this, the great United States of America does have some pretty tough rules, you know. You may not believe this but if you're an American citizen, America exercises this incredible doctrine of global taxation, so that even though tax rates in the U.K. are far higher and I'm Mayor of London, I pay all my tax in the U.K. and so I pay a much higher proportion of my income in tax then I would if I lived in America.
- JOHNSON: The United States comes after me, would you believe it, for the, for capital gains tax on the sale of your first residence which is not taxable in Britain, but they're trying to hit me with some bill, can you believe it? Anyway, I just wanted to point that out to you...
- PAGE: Are you paying, are you gonna pay the bill?
- JOHNSON: I think it's outrageous. I think it's outrageous. It's un...
- PAGE: Well, saying it's outrageous doesn't respond to whether you're going to pay the bill or not. Outrageous or not, will you pay this tax bill?
- JOHNSON: Well, I'm, no, is the answer. I think it's absolutely outrageous. Why should I? I think, you know, I'm not a, I, you know, I haven't lived in the United States for, you know, well, since I was five years old.
- PAGE: You know, we have a lot of deficit problems here and you could help.
- JOHNSON: I could but I pay, I pay the lion's share of my tax, I pay my taxes to the full in the United Kingdom where I live and work.
- PAGE: Now, I've read in a story that you carry both a British passport and an American passport, is that true?
- JOHNSON: That...
- PAGE: And why do you continue to carry an American passport?
- JOHNSON: Because as your caller, Peter, rightly points out, it's very difficult to give it up.
- PAGE: And if you become British Prime Minister, would you have to give up your U.S. citizenship? Is there a rule?
- JOHNSON: Well, I, you know, as we've discussed earlier on, I think the chances of that happening are vanishingly small. And, you know, that's what we call, that's called a luxury, a luxury problem to deal with. I think it unlikely to eventuate...
- PAGE: Let's...
- JOHNSON: I've got a long time still to go as Mayor of London.
- The comments occur starting 36:50 and go to 39:30.
- http://thedianerehmshow.org/audio/#/..._factor/@36:49
#8
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Joined: Jan 2006
Location: San Francisco
Posts: 12,865
Re: urghh taxes.
It seems beyond crazy that they can make us pay on a gain that predates our even living in the country. I get that we should pay a gain since the day we lived here (2007) - that is fair, but when we brought that house in 2001 we had no idea we would be moving to the states etc -and that they can hit us up for gains made in that time just seems plain wrong.
#9
Re: urghh taxes.
The gain accrued over time, it not magically appear in its entirety on the day the house was sold. Apportioning the gain over time would be more equitable, though granted, the IRS doesn't give a jot about equity; nor indeed does HMC&R.
#10
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Joined: Jan 2006
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Posts: 12,865
Re: urghh taxes.
And I didn't see the OP offering to pay the UK tax on the "gain" made before she moved to the US
#11
Re: urghh taxes.
The gain is realized when the house is sold. Until then, there really is no gain. The IRS, like most if not all tax authorities, taxes on realized gains. Prior to sale there is no realized gain. The house has a notional value at all points in time, but a notional value is not equivalent to a gain.
And I didn't see the OP offering to pay the UK tax on the "gain" made before she moved to the US.
And I didn't see the OP offering to pay the UK tax on the "gain" made before she moved to the US.
#12
L2, GC, Surrey, OH, TX!
Thread Starter
Joined: Aug 2007
Location: Surrey to Dallas (via Ohio)!
Posts: 6,363
Re: urghh taxes.
with the old UK CGT gain rules - we were allowed a certain gain each year and could backdate several years - so any gain would have been reduced. AND would not have been impacted by foreign exchange rates - which are a double whammy for us here.
if we look at the ex rate when we came over - vs the ex rate when we bought it would make a big difference and reduce the notional gain substantially.
if we look at the ex rate when we came over - vs the ex rate when we bought it would make a big difference and reduce the notional gain substantially.
#13
Lost in BE Cyberspace
Joined: Jan 2006
Location: San Francisco
Posts: 12,865
Re: urghh taxes.
with the old UK CGT gain rules - we were allowed a certain gain each year and could backdate several years - so any gain would have been reduced. AND would not have been impacted by foreign exchange rates - which are a double whammy for us here.
if we look at the ex rate when we came over - vs the ex rate when we bought it would make a big difference and reduce the notional gain substantially.
if we look at the ex rate when we came over - vs the ex rate when we bought it would make a big difference and reduce the notional gain substantially.