cruickies

Does anyone know if we will have to pay US tax on the money we make from the sale of our house in the UK?
I am going to have to file retrospective tax returns for the last three years to be able to complete the I-864 Affidavit of support - has anyone done this recently in the UK?
Just want to make sure we don't end up having to pay tax in the US next year for the sale of our UK house this year!!!
thanks

BritGuyTN

yes - if you made a capital gain on the sale....

if you've owned it a year or more you are looking at 15%

Jerseygirl

I thought if it had been your main residence and it is sold within 3 yrs of residence in the US no tax was payable.

tonyghiggins

If main residence, no tax is payable.

Jerseygirl

How can it be his main residence if he is resident in the UK? Even if it was his main residence when he lived in the UK...it still has to be sold within a certain timeline.

tonyghiggins

It can still be a main residence not matter where you live. Maybe I am not understanding the question right.

cruickies

thanks for your replies. The house is our main residence while we live here. We plan to sell it before we move to the US and just want to make sure we won't get hit by any tax after we get there...particularly if there was some loophope we could have used...had we known about it

Jerseygirl

I was assuming he was already in the US...a case of missing information. I see now he is still in the UK...so you are correct it is his main residence.

Jerseygirl

I stand by what I've said you have a certain timeframe in which to sell it before having to pay US tax. I'm pretty sure it's 3 yrs but not certain.

cruickies

Thanks guys.

tonyghiggins

Even if you lived in US and rented out your place in UK, it can still be your main residence.

How can the US claim tax on a property you have sold overseas, I always thought you deal with the tax in the home country first.

I am not even sure the 3 years rule is correct, I'll check with my accountant next week.

cruickies

Thanks Tony. My concern is that:

We sell house in the UK before we go over but still need to declare it as income in the tax year on our US tax returns

or

We don't sell it before we go and sell it after we are there say 2 or 3 months and then need to declare.

Would hate to have to pay taxes on the money if we can avoid it!!!

Jerseygirl

Once you are a US resident you must declare it on your tax return but you do not pay US income tax on it.

Bob

once you've set up in the US, your balls belong to uncle sam, they want to know where you've got capital and assets over $10K regardless of where and if they are making money or your paying tax....whether you have to pay tax on them or not then depends, but you've still got to declare it all.