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US and UK tax advice

US and UK tax advice

Old Jul 12th 2012, 7:05 pm
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Default US and UK tax advice

Hi my name is Helene and i am new to this forum. I am orginally from the Uk but took US citizenship about 10 years ago. I have just inherited some property in the UK and want to rent it out but need to get UK and US tax advice and was wondering is anyone might have a suggestion or 2 please? We are going to the UK on 10th August through 19th and are hoping to see tax adviser then.
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Old Jul 13th 2012, 2:25 pm
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Default Re: US and UK tax advice

Originally Posted by heleneo View Post
Hi my name is Helene and i am new to this forum. I am orginally from the Uk but took US citizenship about 10 years ago. I have just inherited some property in the UK and want to rent it out but need to get UK and US tax advice and was wondering is anyone might have a suggestion or 2 please? We are going to the UK on 10th August through 19th and are hoping to see tax adviser then.
As far as your inheritance goes there should be little to no US tax implications. Any tax will be paid by the estate to HMRC so anything you inherit is not US taxable. However, if the inheritance is over $100k you have to file IRS form 3250 and fill in Part IV.

http://www.irs.gov/pub/irs-pdf/f3520.pdf

If you rent out the UK property any income is indeed taxable in the UK. You will have to file a self assessment form with HMRC. If you are a US resident/citizen, the US will also tax you on that income, but allow you a credit for the UK tax paid. See the US-UK tax treaty of 2001, Article 6 para 1 and Article 24. The US will also allow you to depreciate the cost of the property over 27 years.
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Old Jul 19th 2012, 4:37 pm
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Default Re: US and UK tax advice

Originally Posted by nun View Post

The US will also allow you to depreciate the cost of the property over 27 years.
With the cost benig the deemed value for the purpose of estate valuation? Or the cost being the cost of the initial purchase price, depreciated from that date of purchase? Or the current value depreciated over the remaining 27 years from the construction date?

Yours, an interested observer, not inheriting anything .
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Old Jul 23rd 2012, 7:54 pm
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Default Re: US and UK tax advice

Originally Posted by lj2 View Post
With the cost benig the deemed value for the purpose of estate valuation? Or the cost being the cost of the initial purchase price, depreciated from that date of purchase? Or the current value depreciated over the remaining 27 years from the construction date?

Yours, an interested observer, not inheriting anything .
Be careful and speak to a tax advisor.
You may have to use the 40 year depreciation rule.
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