Hello, good to be here, I'm hoping someone can help answer some house sale tax questions.
I'm a UK citizen married to an American and I recently became a US citizen as well. We have been living in the US for about 7 years, and I spend up to but less than 90 days working in the UK each year.
We are planning on moving back to the UK and reestablishing residency there, ideally beginning in September.
We own a house in the US that we plan to keep and rent out, we also own a house in the UK. We are considering selling the UK house (no chain), and then buying another house at some point after the house is sold. I have owned the house for about 17 years and rented it out while living abroad in the US.
We want to optimise (ie minimise!) the amount of Capital Gains Tax that we owe. Is it better to sell as a UK resident? Do you know exactly what that involves? 90 days or 183 living in the UK, do I need to live in the house for any or all of that time? At what point could we put the house on the market after I have returned to the UK? We all know it takes a long time to actually sell a UK property even if it goes smoothly. Is the presence test over the whole tax year or before the house is actually sold and keys handed over?
We want to minimize the potential stamp duty tax too, and especially avoid having to pay the extra 5% for having a second home. Is this possible? When I read the UK tax law on this, it seems that we might be able to avoid this extra 5% if we make my UK house our "main residence" before we sell it. Is this true? What are the criteria for making the UK house our main residence?
The bottom line is that we have a lot of flexibility in terms of when we come back to the UK, and whether or not and for how long we live in the UK house again before selling it. We are looking for any advice that can help us avoid paying many thousands of GBP that we could save with strategic planning.
Many thanks in advance, we will be grateful for any information or stories of experience from the same situation.
