Making the right moves

Relocating to or from the US or UK can feel as daunting as it is exciting. Whether you’re selling, buying, renting, or letting out property in either country, there are consequences with both the IRS and HMRC. We help you plan, so you can focus on feeling at home.

US Citizens disposing of UK or US property

If you’re selling property in the UK or the US, it’s essential to understand how both tax systems interact – including the US/UK double tax treaty, which determines which country has first taxing rights.

The key points at a glance:

• Disposals may trigger capital gains tax in both countries. The US taxes worldwide income and gains. Therefore, gains on UK property must be reported on your US return.
• The US/UK tax treaty generally allows a reciprocal tax credit for tax correctly suffered, but the calculating of the gains is different in each country.
• UK reporting requirements, including Capital Gains Tax on UK property, must still be observed.
• Gains on US property may also affect state tax obligations.
• Certain exemptions or reliefs may apply, such as primary residence relief in the UK or US home sale exclusions, but again, the rules are very different.

Non-US Citizens disposing of US property

If you’re a property investor or an individual selling a home, disposing of US property is subject to a federal withholding tax under the Foreign Investment in Real Property Tax Act (FIRPTA).

The key points at a glance:

• The withholding rate is generally 15% of the property’s gross proceeds or fair market value.
• Disposals subject to FIRPTA include gifts and transfers as well as traditional sales.
• If the property is jointly owned by a US and non-US citizen, only the share allocable to the US citizen is subject to withholding.
• In certain circumstances, the withholding tax is reduced or not required, though reporting is still mandatory. These include:
  • A primary residence sold for under $300,000.
  • Transactions where no proceeds are received.
  • Cases where the required withholding exceeds the maximum tax liability of the transferor.

Relocate with reassurance

Relocation is about fresh starts, not financial stress. With our support and expertise, the complexities of moving between the US and UK are handled with care – so you can settle in with confidence and focus on your new life chapter.