Property Sale in the UK by an ExPat currently residing in the USA

[ianfisher]

Hi Team,
So here's the question
I have a property in the UK that I bought in 1998 for 83k I rented it out until December 1999 when I moved into it for 6 months as my primary residence. The house is currently occupied but generates no income at all. I now want to sell the house (approx value 160k) and don't want to get hit for Capital Gains Tax. I currently reside in the USA and have no intention of returning to the UK to reside. I am also married to an American Citizen if that makes any difference.

Part 2 of the question is if I want to give somebody a gift from the money generated by the house sale (she is a UK resident) is she liable to pay tax on that amount (somewhere between 20-30k)
Facts about the house.
-No Mortgage outstanding
-No income generated on the property since December 1999
-Currently occupied

What I want to do is to sell the property, give a gift of 20-30k and then bring the rest of the money into the USA (Will I get taxed bringing it into the US??) and then invest the money in property over here. Obviously avoiding as many tax issues in both countries as possible.
Any help would be appreciated as well as the name and number of a good tax accountant/lawyer.
Many thanks
Ian

[accountant@uktaxshop]

Ian,

The good news is there isn’t any CGT under those circumstances, assuming you don’t keep hopping back the UK (average of 90 days in the year) and making yourself tax resident in the UK. It would be well worth looking at your dates in detail to make sure before you transact. If you are UK resident the fact it was your main residence for a period makes any liability a lot smaller than it could have been – the last three years of ownership will be treated as exempt.

As for bringing the cash into the US, or indeed if the sale is liable to tax in the US, I would seek some help from a US bean counter.

The gift shouldnÂ’t create any problems, so long as you are in good health, and doesnÂ’t become part of your estate on death.

If you want to check your residence or need some legal help, I have a few contacts that may be able to assist.

James Smith
Chartered Accountant
www.uktaxshop.co.uk
01284 764436

[ianfisher]

James,
That was a swift reply.
The dates are as follows..
Property Purchased - April 1998
Property Leased from April 1998 - December 1999
Property was Primary Residence December 1999 - June 2000
I moved to the USA and was married April 2002 and haven't been back since
I hope this puts me in the clear... and yes any names and numbers would really be appreciated...as well as approximate costs? ANd any advice on the transfer of funds to USA.
I have a CPA here who does all our finances that I can ask.

Again, many thanks

Ian

[accountant@uktaxshop]

Ian,

You are non-resident = no CGT, as long as you donÂ’t come back within 5 years. If you do you would have to pay any CGT on return.

Did you complete a P85 on your departure? If not the IR will think you are still in the UK. You can pick one up from the IR website. (www.inlandrevenue.gov.uk)

Drop me a contact email and I will send you the solicitor details after I have spoken to them on Monday.

Ref transferring the funds, the solicitor would normally do that for you.

James