Rent or sell my UK residency

[brock 0]

I'm a UK national, my wife is a US national, we recently got married here in the UK and all is above board. I have a 3 year old son by her, born here in the UK but has a US passport. They live most of the time in the US, and I have been flying out on a regular basis to visit (and she reciprocates), and we are both very happy together.

I'm now going to start the process of me moving over to US, to hopefully live and work over there, I'm just about to start the K3 (or maybe is should go down the IR1/CR1 route?). Anyways, I'm about to start the whole process.

Onto my question, I own a house here in the UK, which has a very small mortgage left on it, I plan to rent this out, however, I have read that I might be better off selling due to the way the US may tax me in the future, I read in the Sunday Times, that the US Gov my tax me on the total amount of the value of the property, so, for example, say I paid £50'000 for the house 15 years ago and it is now worth £150'000 they will tax me on the £100'000 "profit" - is this true? The same article all said that you can rent it out without to many problems, but once you go down that route you and pretty much stuck with. You either have to sell very early on in the process (before you a US resident?) or keep on renting it, but then you cannot realistically sell without being taxed to hell.

So, where can get advice on this? I don't mind paying!

[payxibka 10,045]

I'm a UK national, my wife is a US national, we recently got married here in the UK and all is above board. I have a 3 year old son by her, born here in the UK but has a US passport. They live most of the time in the US, and I have been flying out on a regular basis to visit (and she reciprocates), and we are both very happy together.

I'm now going to start the process of me moving over to US, to hopefully live and work over there, I'm just about to start the K3 (or maybe is should go down the IR1/CR1 route?). Anyways, I'm about to start the whole process.

Onto my question, I own a house here in the UK, which has a very small mortgage left on it, I plan to rent this out, however, I have read that I might be better off selling due to the way the US may tax me in the future, I read in the Sunday Times, that the US Gov my tax me on the total amount of the value of the property, so, for example, say I paid £50'000 for the house 15 years ago and it is now worth £150'000 they will tax me on the £100'000 "profit" - is this true? The same article all said that you can rent it out without to many problems, but once you go down that route you and pretty much stuck with. You either have to sell very early on in the process (before you a US resident?) or keep on renting it, but then you cannot realistically sell without being taxed to hell.

So, where can get advice on this? I don't mind paying!

The answer depends on your personal needs and individual facts and circumstances. The tax consequences areonly a part of the entire decision equation.

The capital gains tax in the US is the difference between the net selling price (minus the costs to sell the property) and your adjusted cost basis (original purchase price + capital improvements).

Renting the property is as you mention an option and there are different tax consequences to selling a rental property than a personal residence...

A trip to you local tax advisor/financial planner may be in your future......

[PlatyPius 5]

If you sell the house in the UK, put the money in a UK bank account and draw it out as needed in the US via a debit card. Set up your online account access and you can make purchases with a UK credit card and transfer the money to pay for it from your UK bank account.

You can also PayPal money from your UK account to your spouse who then puts it in the US bank account.

Just some ideas.....

[Trompe le Monde 1,107]

I'd personally sell because I think the housing market in the UK is going south

[Eli the Barrowboy 16]

I've got mine on the (what's jokingly referred to as a) market right now ... not good. 3 viewers in 3 weeks. Confidence heading south. Prices heading even souther. Will accept any offer right now.

Any one after a 3 bed property, 1 mile from Belfast city centre at a great rate?

R

[brock 0]

Thanks for the info.

Houses where I live are still selling easily (Malvern, Worcs, it is in a bit of 'bubble' when it comes to house prices, people like to retire here) and my house is reasonably affordable for the area so if I go down that route hopefully it should sell.

I regularly use Paypal to transfer money to my wife, so I guess, if I've got this right, if I sell the house and keep money in the UK every thing is fine, so applies if I rent. But what happens if I then transfer the whole amount to an US bank account - will the IRS hunt me down?

Real world advice appreciated, or can anybody recommend a solicitor as this quite a specialised area and I'm uncertain that in my local area I will fine the type of advice I'm looking for

[rebeccajo 14]

I've got mine on the (what's jokingly referred to as a) market right now ... not good. 3 viewers in 3 weeks. Confidence heading south. Prices heading even souther. Will accept any offer right now.

Any one after a 3 bed property, 1 mile from Belfast city centre at a great rate?

R

Ha. If I had had 3 viewers in 3 weeks in my US property last summer when it was on the market, I would have been skipping stones.

Thanks for the info.

Houses where I live are still selling easily (Malvern, Worcs, it is in a bit of 'bubble' when it comes to house prices, people like to retire here) and my house is reasonably affordable for the area so if I go down that route hopefully it should sell.

I regularly use Paypal to transfer money to my wife, so I guess, if I've got this right, if I sell the house and keep money in the UK every thing is fine, so applies if I rent. But what happens if I then transfer the whole amount to an US bank account - will the IRS hunt me down?

Real world advice appreciated, or can anybody recommend a solicitor as this quite a specialised area and I'm uncertain that in my local area I will fine the type of advice I'm looking for

Your US other half needs to find a tax accountant to ask these questions of. You don't need a solicitor.

Or you could try www.britishexpats.com. I bet if you use the search function in the USA forums you'll find a 'good start' answer.

Edited April 7, 2008 by rebeccajo

[AJS 0]

Eli the Barrowboy -- How long has your house been for sale? My husband lives in Gloucester and his bungalow has been for sale for 2-1/2 months with just one showing. Sucky!!! Unfortunately the UK market is following the market here in the states.

Edited April 7, 2008 by AJS

[Lansbury 19]

If you sell the house in the UK, put the money in a UK bank account and draw it out as needed in the US via a debit card. Set up your online account access and you can make purchases with a UK credit card and transfer the money to pay for it from your UK bank account.

You can also PayPal money from your UK account to your spouse who then puts it in the US bank account.

Just some ideas.....

Why would you want to do it using a debit card or PayPal. That is a sure why to get the worse exchange rate and fees. Likewise using a UK credit card in the US.

We sold our house in the UK and used a currency broker to bring the money over. No UK capital gains tax in the UK as it was our primary residence, spoke to our US account and no capital gains tax was paid in the US.

[Mags 112]

If you sell the house in the UK, put the money in a UK bank account and draw it out as needed in the US via a debit card. Set up your online account access and you can make purchases with a UK credit card and transfer the money to pay for it from your UK bank account.

You can also PayPal money from your UK account to your spouse who then puts it in the US bank account.

Just some ideas.....

Why would you want to do it using a debit card or PayPal. That is a sure why to get the worse exchange rate and fees. Likewise using a UK credit card in the US.

We sold our house in the UK and used a currency broker to bring the money over. No UK capital gains tax in the UK as it was our primary residence, spoke to our US account and no capital gains tax was paid in the US.

Actually, what I did was used my credit card in the USA and paid the balance online using the funds in the UK. I got excellent rates, btw.

[Eli the Barrowboy 16]

Eli the Barrowboy -- How long has your house been for sale? My husband lives in Gloucester and his bungalow has been for sale for 2-1/2 months with just one showing. Sucky!!! Unfortunately the UK market is following the market here in the states.

It's been on the market just 3 weeks ... but when you HAVE to sell it becomes like 3 months ... plus we dropped the price waaay down to get people in the door

[Lansbury 19]

If you sell the house in the UK, put the money in a UK bank account and draw it out as needed in the US via a debit card. Set up your online account access and you can make purchases with a UK credit card and transfer the money to pay for it from your UK bank account.

You can also PayPal money from your UK account to your spouse who then puts it in the US bank account.

Just some ideas.....

Why would you want to do it using a debit card or PayPal. That is a sure why to get the worse exchange rate and fees. Likewise using a UK credit card in the US.

We sold our house in the UK and used a currency broker to bring the money over. No UK capital gains tax in the UK as it was our primary residence, spoke to our US account and no capital gains tax was paid in the US.

Actually, what I did was used my credit card in the USA and paid the balance online using the funds in the UK. I got excellent rates, btw.

I trying to see why this is an advantage to transferring the money over. I think I'm understanding you correctly in that you are using a UK credit card in the US and then paying the bill with UK funds, which get sent in pounds from your UK bank to the card companies UK bank.

My experience from using a UK credit card in the US and transferring money through a currency broker is the broker gives a far better exchange rate of about 8 cents over a bank and about 5 cents in the pound better than my credit card.

I'm trying to see what the gain is doing it the way you suggested as I maybe missing something which could be useful.

[Toshtishtash 1]

If you sell the house in the UK, put the money in a UK bank account and draw it out as needed in the US via a debit card. Set up your online account access and you can make purchases with a UK credit card and transfer the money to pay for it from your UK bank account.

You can also PayPal money from your UK account to your spouse who then puts it in the US bank account.

Just some ideas.....

Why would you want to do it using a debit card or PayPal. That is a sure why to get the worse exchange rate and fees. Likewise using a UK credit card in the US.

We sold our house in the UK and used a currency broker to bring the money over. No UK capital gains tax in the UK as it was our primary residence, spoke to our US account and no capital gains tax was paid in the US.

Actually, what I did was used my credit card in the USA and paid the balance online using the funds in the UK. I got excellent rates, btw.

I trying to see why this is an advantage to transferring the money over. I think I'm understanding you correctly in that you are using a UK credit card in the US and then paying the bill with UK funds, which get sent in pounds from your UK bank to the card companies UK bank.

My experience from using a UK credit card in the US and transferring money through a currency broker is the broker gives a far better exchange rate of about 8 cents over a bank and about 5 cents in the pound better than my credit card.

I'm trying to see what the gain is doing it the way you suggested as I maybe missing something which could be useful.

I think she means that she got an American credit card and paid it off using the money from her English bank account.. Probably a very good way of increasing your credit score quickly too

Could be wrong though!

Edited April 8, 2008 by toshtishtash