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-   -   US Capital Gains Tax on property sold in UK (https://britishexpats.com/forum/usa-57/us-capital-gains-tax-property-sold-uk-429185/)

gisela Feb 20th 2007 10:37 pm

US Capital Gains Tax on property sold in UK
 
hi all,
i live in the us and am selling my flat in london. it seems that i am exempt of CGT in the UK (left before 1998) but what about the US? has anyone experience with this? would i be liable to pay the CGT here? or what if i just left the money in the UK and brought it over in dribs and drabs?
thanks for any input from THEMS WHAT KNOW!
gisela:confused: :confused:

Bob Feb 21st 2007 12:15 am

Re: US Capital Gains Tax on property sold in UK
 
Welcome to BE :)

Do a search, the question has come up quite a few times...

And even if you did bring the money over in dribs and drabs, you'd still need to declare any assets over $10K to the IRS.

Rushman Feb 21st 2007 2:17 am

Re: US Capital Gains Tax on property sold in UK
 

Originally Posted by gisela (Post 4435173)
hi all,
i live in the us and am selling my flat in london. it seems that i am exempt of CGT in the UK (left before 1998) but what about the US? has anyone experience with this? would i be liable to pay the CGT here? or what if i just left the money in the UK and brought it over in dribs and drabs?
thanks for any input from THEMS WHAT KNOW!
gisela:confused: :confused:

I may be wrong but I think it all depends when you got your residency in the US. I think if you sell your UK house after 2 or 3 years (maybe even less) after the date that your residency in the US was issued (its on your GC) then you have to pay US tax on it. Personally I would keep it in the UK and bring it in dribs and drabs and spread it about abit. **** the IRS.

gisela Feb 21st 2007 3:10 pm

Re: US Capital Gains Tax on property sold in UK
 
hi sir, and bob,
thanks for your replies.
i got US residency in 91, so am exempt from UK tax. but here -- my accountant doesn't know about europe, so i was hoping to hear from someone who's been there, done that..
gisela

Pulaski Feb 21st 2007 3:35 pm

Re: US Capital Gains Tax on property sold in UK
 

Originally Posted by gisela (Post 4437777)
hi sir, and bob,
thanks for your replies.
i got US residency in 91, so am exempt from UK tax. but here -- my accountant doesn't know about europe, so i was hoping to hear from someone who's been there, done that..
gisela

US citizens, and I think PRs are liable for US taxes on their worldwide income and realized gains.
You have been gone too long to benefit from the $250,000 ($500,000 if married filing jointly) exemption on your personal residence (requires two of the past five years living in it), but assuming that you have been renting it you may be able to roll the proceeds (NOT just the gain) into a qualifying asset in the US, e.g. rental property(s) in the US, to avoid the tax liability. If you want to do this you should consult a tax accountant experienced in such matters.

Bob Feb 21st 2007 3:39 pm

Re: US Capital Gains Tax on property sold in UK
 

Originally Posted by Pulaski (Post 4437840)
US citizens, and I think PRs are liable for US taxes on their worldwide income and realized gains.

PR's are liable :)

BritGuyTN Feb 21st 2007 3:56 pm

Re: US Capital Gains Tax on property sold in UK
 

Originally Posted by Pulaski (Post 4437840)
US citizens, and I think PRs are liable for US taxes on their worldwide income and realized gains.
You have been gone too long to benefit from the $250,000 ($500,000 if married filing jointly) exemption on your personal residence (requires two of the past five years living in it), but assuming that you have been renting it you may be able to roll the proceeds (NOT just the gain) into a qualifying asset in the US, e.g. rental property(s) in the US, to avoid the tax liability. If you want to do this you should consult a tax accountant experienced in such matters.

I looked at a 1031 exchange, but unfortunately it actually excludes foreign property.... :mad:

gisela Apr 11th 2007 12:53 am

Re: US Capital Gains Tax on property sold in UK
 

Originally Posted by BritGuyTN (Post 4437907)
I looked at a 1031 exchange, but unfortunately it actually excludes foreign property.... :mad:

Fresh information on the subject: i spoke to an accountant and she said that i should get a divorce first (as i was getting it anyway), and then my income would be hugely reduced. the capital gains tax is in part based on your income, and of couirse the profit you are making on your property. she told me that i would have to pay 22% of the profit (in louisiana).
just in case this is helpful to anyone in a similar situation.
gis

BigDavyG Apr 11th 2007 12:57 am

Re: US Capital Gains Tax on property sold in UK
 

Originally Posted by Rushman (Post 4435821)
Personally I would keep it in the UK and bring it in dribs and drabs and spread it about abit. **** the IRS.

Amen

Boiler Apr 11th 2007 2:05 am

Re: US Capital Gains Tax on property sold in UK
 

Originally Posted by gisela (Post 4624267)
22% of the profit (in louisiana).
just in case this is helpful to anyone in a similar situation.
gis

22% of the gain since you became liable to US taxation? Or 22% of everything.

There could be a whole variety of reasons for bringing in money to the US that have no tax issues, Inheritance for example.

Never heard of anyone being quizzed as to the source of their funds.

BritGuyTN Apr 11th 2007 10:01 am

Re: US Capital Gains Tax on property sold in UK
 

Originally Posted by gisela (Post 4624267)
Fresh information on the subject: i spoke to an accountant and she said that i should get a divorce first (as i was getting it anyway), and then my income would be hugely reduced. the capital gains tax is in part based on your income, and of couirse the profit you are making on your property. she told me that i would have to pay 22% of the profit (in louisiana).
just in case this is helpful to anyone in a similar situation.
gis

no idea where he's getting 22% from? is this lousiana specific?

As far as I was aware, capital gains reliased within a year of ownership are taxed at 25%, after a year and a day its 15%, which is still an arse, but not too horrific

Dan725 Apr 12th 2007 9:42 am

Re: US Capital Gains Tax on property sold in UK
 
Personally I'd just sell the house in the UK using a UK estate agent etc then transfer the proceeds bank to bank. It will get declared to the IRS; so what? Unless they know its from the sale of property, they won't tax you on it.


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