US Tax implications of UK house sale

12-07-2005, 08:25 PM

Hi,

My USC wife & I (UKC) have successfuly submitted I-130.

We have a target date to get to US of 1 March 2006 (but have a lot of
'unknowns').

Our house is on the market in the UK. We hope to sell before making the
move. But the house may not sell before that time.

If we sell after the move (say 6 months later), and I start work
immediately on arirval in US, will we be subject to any US capital
gains tax?

Many thanks,

b.

12-07-2005, 09:17 PM

> Hi,
> My USC wife & I (UKC) have successfuly submitted I-130.
> We have a target date to get to US of 1 March 2006 (but have a lot of
> 'unknowns').
> Our house is on the market in the UK. We hope to sell before making
> the
> move. But the house may not sell before that time.
> If we sell after the move (say 6 months later), and I start work
> immediately on arirval in US, will we be subject to any US capital
> gains tax?
> Many thanks,
> b.

Here's someone in a similar situation:

http://britishexpats.com/forum/showthread.php?t=341399

Rene

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12-07-2005, 11:00 PM

> Hi,
> My USC wife & I (UKC) have successfuly submitted I-130.
> We have a target date to get to US of 1 March 2006 (but have a lot of
> 'unknowns').
> Our house is on the market in the UK. We hope to sell before making
> the
> move. But the house may not sell before that time.
> If we sell after the move (say 6 months later), and I start work
> immediately on arirval in US, will we be subject to any US capital
> gains tax?
> Many thanks,
> b.

Hi:

You say "we" own the house, "we hope to sell", etc etc.

Part of the "we" is your US citizen spouse. One of the privileges of
being a US citizen is that she is subject to taxation on her worldwide
income. If she has been working, why do you think she was filing those
pesky 1040 forms in order to claim the exemption. BTW, that exemption
applies only to "earned" income if memory serves me correct.

Contact a professional who knows US tax law.

__________________
Certified Specialist
Immigration & Nat. Law
Cal. Bar Board of Legal Specialization

12-08-2005, 07:22 AM

she's filed from the UK but has not earned anything in the last 3
years. don't know if that matters.

the property in the UK is our only property & has been our primary
residence since marriage. we plan to buy a new house after arrival in
US.

can anyone recommend a UK based specialist on US tax law?

b.

12-08-2005, 07:29 AM

I saw that but he's K1 and I'm K3. He also has 2 properties and a lot
of the answers refer to UK capital gains which I'm not worried about.
b.

ps. I just realised this forum is for 'visas' so sorry this is so far
off-topic.

12-08-2005, 07:48 AM

> I saw that but he's K1 and I'm K3. He also has 2 properties and a lot
> of the answers refer to UK capital gains which I'm not worried about.
> b.
> ps. I just realised this forum is for 'visas' so sorry this is so far
> off-topic.

http://britishexpats.com/ shows this board and also has a USA board that
I do not think is usenet.

K1 and K3 is not relevant, being resident for IRS purposes is. IRS
give you certain options about becoming resident, best to read it on
their site.

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12-08-2005, 07:59 AM

> she's filed from the UK but has not earned anything in the last 3
> years. don't know if that matters.
> the property in the UK is our only property & has been our primary
> residence since marriage. we plan to buy a new house after arrival in
> US.
> can anyone recommend a UK based specialist on US tax law?
> b.

Have a look on the IRS site but if its in the joint names then you are
looking at a $500,000 exemption in respect of the profit made. If it is
more than that I think your wife will be stuck with some tax liability
on her half, you will depend on whether you are liable when the property
is sold. Assuming you tell them.

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12-08-2005, 09:35 AM

Boiler wrote:

>>she's filed from the UK but has not earned anything in the last 3
>>years. don't know if that matters.
>>the property in the UK is our only property & has been our primary
>>residence since marriage. we plan to buy a new house after arrival in
>>US.
>>can anyone recommend a UK based specialist on US tax law?
>>b.
>
>
> Have a look on the IRS site but if its in the joint names then you are
> looking at a $500,000 exemption in respect of the profit made. If it is
> more than that I think your wife will be stuck with some tax liability
> on her half, you will depend on whether you are liable when the property
> is sold. Assuming you tell them.
>

Plus, if he made a $500K profit, then he should have money to hire a tax
person. I don't know about the minor players, but if you have the
money, you might want to consider a US accounting firm with offices in
the UK. When I was considering a move to Europe, my employer put me in
contact with Ernst & Young in Brussels.

12-08-2005, 03:35 PM

> I saw that but he's K1 and I'm K3. He also has 2 properties and a lot
> of the answers refer to UK capital gains which I'm not worried about.
> b.
> ps. I just realised this forum is for 'visas' so sorry this is so far
> off-topic.

After contacting my tax office i know that i have three years to sell my
property before the UK capital gains come into effect(thanks susie
anyway)...
I guess it would be wise not to rush & get my name on my partners
mortgage until the time is right as that would only complicate
things?...

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