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TaxRobin
TaxRobin, Tax Consultant
Category: Tax
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Experience:  International tax
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I have lived in USA for the last 6 years and recently took a

Resolved Question:

I have lived in USA for the last 6 years and recently took a green card (permanent residency card). I have a property in the UK that has always been a buy-to-let property. I also have some cash in the UK.
1)If I were to sell my existing property and buy a new one together with my cash, would the new additional 3% stamp duty rule apply to me? i.e. I would only own one property but it would be a buy to let.
2)I understand there is a rule in the UK that non-residents now have to pay capital gains tax on properties in UK. However, this is done with an adjusted cost basis to April 2015. I also understand that people in my situation are advised to get the property valued to prove the adjusted cost basis. Given it is now August 2016 should I get the property valued as of today or as of April 2015? Does the valuation have to be done in a certain way? Can you recommend a valuer?
Submitted: 11 months ago.
Category: Tax
Expert:  TaxRobin replied 11 months ago.

Hello

1 If the home you are buying directly replaces your main residence, you will not be liable for the 3% surcharge, even if you own an additional home/s at the same time.
As this property is not your main residence (your main residence is in the US and this property was let) you have to pay the 3%.

2 You have to use the value back in April 2015. I am not allowed to advise or recommend on a specific company or person unfortunately.

Customer: replied 11 months ago.
1)I own no property in the USA, I rent. Therefore, if I sell the existing and buy a new one, I only own one property. Does the 3% still apply?
Expert:  TaxRobin replied 11 months ago.

No you will not. If you have only the one property then you are not charged the additional tax.

Anyone who is buying an additional residential property has to pay the tax. If you sell the only property you own then no, it does not apply.

Customer: replied 11 months ago.
I have seen it referred to as additional or buy to let tax....so if my new property is buy-to-let and is my ONLY property is there any issue? (given I would sell my existing buy-to-let property).Also, does setting up as company to buy the new property help to alleviate any taxes? My income in UK is negligible except for the rental property
Expert:  TaxRobin replied 11 months ago.

When you sell the one you own now you have no other property. Purchasing another then would not trigger the tax because you would not have any other property.

Setting up a company would most likely just complicate your situation. The letting would still be reported and you would have additional filing in the US for having a foreign company.

Customer: replied 11 months ago.
I am asking specifically if the new single property is a buy to let does the 3% apply or not? (It is not clear from various websites whether the 3% applies even if only one property if it is a buy-to-let)
Expert:  TaxRobin replied 11 months ago.

No it would not.

Let me see if I can say it in a different way for you. If you own only one property on the day you purchase the buy to let then you are not subject to the 3% additional on stamp duty, no matter what you use the property for.

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