US Tax and UK property
Apr 11th 2020, 12:52 am
#1
Just Joined
Thread Starter
Joined: Apr 2020
Posts: 17
US Tax and UK property
HI Group
I was due to move to USA May 2020 (CR-1) which clearly isn't happening so it's given me some extra time. I'd like a little guidance if not too much trouble.
I have an apartment (Flat), the mortage was paid off a number of years ago would there be any tax implications? I do not expect I'd ever have the need nor wish to ever sell it. I assume no capital gains tax as it's not been sold is that correct? I have read the advice is to sell but I'd be happy with a small income till I die then someone else can worry about it.
I have a good friend (tenant) ready to move in and pay rent (~£300/month). I do not envisage my friend moving out in the next 20 years if ever, however I've ensured everything is legal and above board for the tenants security and also to hedge for such an eventually.
I have a small UK private pension (£4k yr taxed). At what stage would I declared this to USA and notify UK I'm paying US Tax on this?
I've been offered an additional £13,000 lump sum UK taxable (The original pension was not the full amount and the insurance company has recovered additional funds) which will pay out around Dec 2020. I decided I needed th £10k after tax rather than increase my monthly pension.
I've completed my UK 2019-2020 Tax Return and due a rebate of £2,800 which I'll hopefully receive prior to travelling to USA.
The UK Tax year as you know is 6 April - 5 April and I believe USA is 1 Jan to Dec 31.
In my first year in USA do I declare all income from 1 Jan 2020 or only from landing in USA. I'm hoping from landing in USA.
Thanks
I was due to move to USA May 2020 (CR-1) which clearly isn't happening so it's given me some extra time. I'd like a little guidance if not too much trouble.
I have an apartment (Flat), the mortage was paid off a number of years ago would there be any tax implications? I do not expect I'd ever have the need nor wish to ever sell it. I assume no capital gains tax as it's not been sold is that correct? I have read the advice is to sell but I'd be happy with a small income till I die then someone else can worry about it.
I have a good friend (tenant) ready to move in and pay rent (~£300/month). I do not envisage my friend moving out in the next 20 years if ever, however I've ensured everything is legal and above board for the tenants security and also to hedge for such an eventually.
I have a small UK private pension (£4k yr taxed). At what stage would I declared this to USA and notify UK I'm paying US Tax on this?
I've been offered an additional £13,000 lump sum UK taxable (The original pension was not the full amount and the insurance company has recovered additional funds) which will pay out around Dec 2020. I decided I needed th £10k after tax rather than increase my monthly pension.
I've completed my UK 2019-2020 Tax Return and due a rebate of £2,800 which I'll hopefully receive prior to travelling to USA.
The UK Tax year as you know is 6 April - 5 April and I believe USA is 1 Jan to Dec 31.
In my first year in USA do I declare all income from 1 Jan 2020 or only from landing in USA. I'm hoping from landing in USA.
Thanks
Apr 15th 2020, 5:27 pm
#2
Joined: Dec 2001
Location: Dixie, ex UK
Posts: 52,439
Re: US Tax and UK property
You've asked a lot of questions so I hope that others can chip in with advice, but I'll kick off with a couple of answers. You are correct - CGT only applies when you sell a property, so if you hold your UK flat until you die, then there will be no CGT implications in either country.
You will be liable for US taxes at the point that you enter the US on you CR-1 and become a permanent resident. There may be a reason to voluntarily include your whole calendar year income, and I think that would typically be to enable you to file taxes jointly with your spouse (that is usually the best way to file taxes if you are married) - you would get a deduction for taxes already paid in the UK
You will be liable for US taxes at the point that you enter the US on you CR-1 and become a permanent resident. There may be a reason to voluntarily include your whole calendar year income, and I think that would typically be to enable you to file taxes jointly with your spouse (that is usually the best way to file taxes if you are married) - you would get a deduction for taxes already paid in the UK
Apr 17th 2020, 11:01 am
#3
Just Joined
Thread Starter
Joined: Apr 2020
Posts: 17
Re: US Tax and UK property
Thank you.
So if I decide to pay UK tax for 2020 (until I arrive in USA) I assume the UK tax free allowance will be pro rata?
I'm hoping for instance if I have income below say £6000 for 6 months I'll get that tax back.
I won't be doing joint tax I don't think in US for a few years as my wife has debts with IRS which I'd rather not pay.
If I receive my tax refund later in 2020 (overpaid income to April 2020) I assume that it will not be taxable in USA as it applies to 2019-2020 tax year?
The taxable lump sum will be taxed in UK and received around Dec 2020. What's the best way to deal with this?
So if I decide to pay UK tax for 2020 (until I arrive in USA) I assume the UK tax free allowance will be pro rata?
I'm hoping for instance if I have income below say £6000 for 6 months I'll get that tax back.
I won't be doing joint tax I don't think in US for a few years as my wife has debts with IRS which I'd rather not pay.
If I receive my tax refund later in 2020 (overpaid income to April 2020) I assume that it will not be taxable in USA as it applies to 2019-2020 tax year?
The taxable lump sum will be taxed in UK and received around Dec 2020. What's the best way to deal with this?
