Selling an American property

[LankyD]

My wife and I are UK citizens and sold a property in America in August last year (we have owned it for a number of years from when I worked in America). The broker who we dealt with told us we have to declare the sale and pay any capital gain taxes to the US government. We had planned to report the sale here in the UK and pay the taxes owed here as well. We know the UK tax system and also have made some capital losses in the UK that we planned to offset here for tax reasons. Does anyone know what our responsibilities are and what would be the consequences of not filing in america?

[GlobalTaxAdviser]

You have a duty to report the sale in both UK and USA irrespective of the tax consequences.

In recent years the USA has introduced FBAR (Foreign Bank Account Report) and FATCA (Foreign Asset Tax Compliance Act) this gives the IRS enormous powers and to a degree have a hold on UK banks

IRS may get the UK banks to take action against you and seize your assets. IRS is one tax body you certainly do not want to mess with and they will catch up with you. IRS also spent billions on tax enforcement mainly aimed at US citizens living abroad who have not filed a tax return etc

Even if you end up paying tax in USA and UK likely you will get a tax credit for the tax in UK based on the Double Tax Credit though I appreciate you have capital losses too.

HMRC and IRS also have started to share tax data.

[DavidTreitel]

From a US tax perspective you have an obligation to file US tax returns by 15 June 2018. Our firm has helped hundreds of people in these circumstances and would be pleased to assist. If there is US tax payable it can be claimed as a credit in the UK.

With kind regards

David Treitel | Managing Director | American Tax Returns Ltd
Enrolled Agent to the United States Internal Revenue Service
Accountant and Chartered Tax Adviser

The Old Exchange, 12 Compton Road, London, SW19 7QD

Tel: 020 3542 6330

Email: david.treitel@americantaxreturns.co.uk