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TaxRobin
TaxRobin, Tax Consultant
Category: Tax
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Experience:  International tax
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I live and work in the US. I hold both US and UK passports.

Resolved Question:

I live and work in the US. I hold both US and UK passports. I pay tax in the US.

I have recently come into 117,500 pounds from the sale of my mother's property in the UK and I am planning on using UK pounds 112,000 to purchase a v small property in UK. What, if any, are the tax implications of doing so?
Submitted: 3 years ago.
Category: Tax
Expert:  TaxRobin replied 3 years ago.
Hello,
Your residency will decide.
If you are resident in the US they will require you report and pay tax on the gain. The US will allow for a credit on any tax you are liable for in the UK.
For UK purposes, if the inherited asset is a property that you live in as your main home from the time you inherit it to the time you sell or dispose of it, you may not have to pay Capital Gains Tax when you dispose of it.
The main issue is relief from double taxation. That is provided by treaty and as you are resident in the US you would claim your relief on your US return by using form 1116.
Customer: replied 3 years ago.

Thank you, XXXXX XXXXX if the property in the UK is not lived in permanently but used more as a holiday home.


 


Or


 


if I decided to rent it out?


 


Thanks..

Expert:  TaxRobin replied 3 years ago.
You would pay tax in the US and the UK too. UK would require reporting because the property is there (and you are using for rental) and the US requires reporting because you personally are in the US.
You would still be allowed relief by the same form 1116.
A holiday home with no rental use would not require any reporting.
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