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Tax.appeal.168
Tax.appeal.168, Accountant
Category: US Tax
Satisfied Customers: 6942
Experience:  3+ decades of various tax experience, including ex-pat, tax prep and accounting as a business owner.
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My son-in-law has just emigrated to the USA. He has just been

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My son-in-law, now emigrated to the USA has been told he will have to pay US tax (25%) on his £50K UK tax free saving account, when he transfers that money to the USA, and pay CGT in both the USA and UK if he sells his house in the UK, and transfers that money.

Is this correct ?

Hello, thank you for contacting JUST ANSWER. My name is XXXXX XXXXX I will try to assist you today.

In order form me to better assist you, I need a bit of clarification;

1) So he has settled here permanantly, which I am assuming he has, or will be applying for a Green Card?

As for the savings account, there is no tax requirement when transferring money to a bank account in the U.S. You do have to keep in mind the currency exchange rate, which is different from tax.

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2) If he is a Green Card holder, then yes, you he will have to pay CGT if he sells the house in the UK, providing that he actually incurs a gain. However, there is a tax treaty between the U.S. and the U.K. that will eliminate the double taxation. Article 23 of the treaty is the article that addresses double taxation.

Link to full treaty:

http://www.irs.gov/pub/irs-trty/uk.pdf

Please let me know if I can be of further assistance to you regarding this matter.

thank you again for using JUST ANSWER.



Customer: replied 5 years ago.

Thank you for the information on CGT.


Difficult to get everything in at first attempt.


Son-in-law arrived in the USA, 4 weeks ago. Told SSN will be issued this week.


The £50K is held in UK tax-free investment. Can IRS tax him on interest from UK investment held PRIOR to arriving in the USA ?


Or is it on proportion of interest accrued since arriving in the USA?

Hello again,

You are welcome.

Q: Can IRS tax him on interest from UK investment held PRIOR to arriving in the USA ?

A: No.

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Q: Or is it on proportion of interest accrued since arriving in the USA?

A: The interest accrued since establishing permanent residency.

For additional information, you may wish to refer him to the following IRS webpage:

http://www.irs.gov/taxtopics/tc851.html

Please let me know if this clarifies matters for you.

Thank you again for using JUST ANSWER.
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