US Tax

The best advice you'll ever get is this:  don't take tax advice from total strangers online.

You'll only pay Capital Gains Tax on the property you are selling if such a tax applies in the UK.

There are some transfer of title fees etc., that you will pay on purchasing a home in the USA, but they are minor. If you sell that property at a later date then yes, you would pay Capital Gains Tax on the home in the USA.

While timing your move may make some minor differences regarding your tax situation in the UK, it certainly won't make any difference in the USA. I doubt that any possible benefits would make up for the inconvenience and separation.

wjwoodward wrote:

There are some transfer of title fees etc., that you will pay on purchasing a home in the USA, but they are minor. If you sell that property at a later date then yes, you would pay Capital Gains Tax on the home in the USA.

WRONG

If you buy a primary residence in the USA, live in it for 2 years or more, then sell it, the first $250,000 of gain is excluded for a single person, $500,000 for married filing a joint return. In fact, it must only be your primary residence for two of the previous five years.  If you use any part of the house for business purposes or you rent the house to others before sale then you will be taxed on depreciation recapture.

HaileyinHongKong wrote:

The best advice you'll ever get is this:  don't take tax advice from total strangers online.

I agree, but please research whatever you read, for strangers may point you in the right direction.
After all, you are a total stranger also, so why should she take advice from a total stranger about not taking advice from a total stranger?  Could this get any stranger?

Seek professional tax advice for personal income tax questions.

Nearly there wrote:

On the move to Houston in July We have our family home in UK on the market to sell so we can buy a smaller property ready for the next stage in our lives now the family have left home. As we have had the property many years and it is the London area, it has obviously appreciated in value. Are we liable to pay capital gains tax if we move to the US? If my husband moves in July but I wait until the end if the tax year, does that make a difference? If we are selling with a view to buying a similar home, does this make a difference?

Hi mugtech,

The OP is talking about paying US Capital Gains Tax on the home he is selling in the UK. Would you please explain to me how he would have to pay any US tax on an asset sold in the UK unless he happens to also be a US citizen and thus must declare "worldwide income"? Sorry, there just seems to be something I'm missing here. He's not even in the USA yet so why would he even need to file a 1040 in the first place?

Obviously, if he sells the house in the UK and if they have a Capital Gains Tax then he'd be liable to pay that in the UK and if he later purchased a home in the USA (primary residence) and later sold it, he'd pay Capital Gains Tax on any gains above the 250K/500K exemptions you point out, but that doesn't seem to be what he's asking about.

Actually I just mentioned the US Capital Gains Tax on a home purchased there in passing so that he'd be aware that this tax indeed does exit. That is why I didn't elaborate and talk about the exempt amounts.

As a UK resident, if you sell your family home in the UK, you may be liable to pay capital gains tax (CGT) on any gains realized from the sale. However, if you are planning to move to the US, there are certain factors to consider regarding your CGT liability:

1. Residence Status for UK Tax Purposes: If you are considered a UK tax resident when you sell your property, you will be subject to CGT on the gains. The amount of CGT payable will depend on the total gains and your annual CGT exemption amount.

2. Time of Departure: If you and your husband move to the US at different times during the tax year, your CGT liability may differ. Your CGT liability will generally be based on the date of the property's disposal and whether you are a UK tax resident on that date.

3. Tax Year End Consideration: If you wait until the end of the UK tax year to move to the US, it may have an impact on your UK tax liability. Being a non-UK tax resident for the entire tax year may have certain tax advantages, and you might be eligible for certain reliefs.

4. PPR Relief: Principal Private Residence (PPR) relief is a valuable relief for CGT in the UK. If your property has been your main residence at any point during the ownership period, you may be eligible for PPR relief, which reduces or eliminates CGT on the property's gains.

5. Buying a Similar Home: The intention to use the proceeds from the sale to buy a similar home may not directly affect your CGT liability. However, it could be relevant to the timing and availability of certain CGT reliefs, such as the PPR relief.

6. US Tax Considerations: When moving to the US, you'll need to consider the tax implications there as well. The US has its own tax rules, and you should consult a tax advisor in the US to understand any potential tax obligations related to your property sale and subsequent purchases.

Navigating the complexities of CGT in the UK and potential US tax implications requires careful planning and advice from tax professionals with expertise in international taxation. They can help you optimize your tax position, ensure compliance with relevant tax laws, and make informed decisions regarding your property sale and relocation to the US.

As UK residents moving to the US, selling your family home in the UK may trigger capital gains tax (CGT) liability based on the property's appreciation. However, you may be eligible for Principal Private Residence (PPR) relief, which can reduce or eliminate CGT on gains if the property has been your main residence at any time during ownership.

Timing your move to the US can affect your UK tax liability. If you become a non-UK tax resident before selling the property, you might benefit from certain tax advantages and potential reliefs. Also, if you wait until the end of the UK tax year to move, it may have implications for your UK tax status.

On the US side, when you move and become a US tax resident, you'll encounter different tax rules. The US has a home exclusion tax provision, known as the Primary Residence Exclusion. Under this provision, if you meet certain requirements, you may exclude up to a certain amount of gains ($250,000 for individuals or $500,000 for married couples filing jointly) from the sale of your US home from federal income tax.