Capital Gains non resident US citizen

[imstrabo]

Hello,

I am a US citizen living in the US. I am thinking about trying to trade stocks, bonds and commodities on London based exchanges. I am trying figure out if I will have to pay capital gains taxes on any gains and if I need to make any filings with the tax authorities in the UK.

Thanks,
Edward

[pawncob]

Apart from Stamp Duty I don't think this arrangement will involve any UK taxation.

[guya]

There will be us on foreign currency gains and capital gains and may be FBAR filing.

Watch for PFICs.

[Taxbar]

Actually there is another UK tax exposure.

If you pass away holding UK stocks and shares you could have a UK Inheritance tax exposure, unless protected by the US/UK Estate tax treaty Article 5 .This should work for most UK stocks and shares.

However, there will still be need for a UK probate using your US will and probate in order for the shares to be transferred to your estate.

You should consider using an nominee arrangement, or US quoted ADRs of UK shares to avoid this.

Daniel Feingold
Senior Partner
STTP
info@stratax.co.uk

[Michael I. Atlas, CA]

Daniel-

I think that holding/trading the shares via a US LLC would be another way to avoid that problem, since it would avoid holding UK situs property, but still allow disregarded entity treatment for him in US.