Capital gains tax owed upon selling a UK property?

Hi

H2B and I just made an offer on a house yesterday (yikes - this scares me more than getting married, which actually doesn't scare me, but the house thing fills me with dread - feels much riskier, etc.).

Anyway, my question is based on the fact that I am American, he is Australian, and we are likely to retire to either the USA or Oz in about 15-20 years time.  In that much time, we hope to have a bit of capital appreciation in our home, but I want to know before we complete the deal, at least as the tax laws stand now (knowing anything could happen in the future), how is the capital gain on the sale of the house which is your primary residence treated? 

I thought that in the USA, as long as you put the proceeds of a primary residence sale into a new house within a certain period of time, that the capital gain was not subject to tax (but that was a long time ago and perhaps that has even changed, I don't know).  And I would like to know how things work in the UK and if we will be liable for capital gains tax, does anyone know what the % is at this point in time?

Thanks, Jana (very nervous soon to be homeowner!!!)

1. As a US citizen you are taxable on gains on sales of main residences, but can exclude the first $250,000 of gain if filing a separate return and have lived in the home for at least 2 years.
2. In addition repaying the capital on a foreign mortgage may give rise to a foreign currency gain, taxable in the US as ordinary income and reportable on the annual US tax returns that you are doubtless already filing.
3. The rollover of capital gains rules were abolished a long while back and replaced by the $250,000 exemption.
4. The UK does not tax gains on sales of main residences.
5. On death you can transfer unlimited amounts to each other free of UK inheritance tax because you are both non-UK domiciled.  However you could only transfer $60,000 to your spouse before US estate taxes kick in because he is not a US citizen. 

Wow, Guya - thanks for that!  I will file away the information and keep it for future reference.  I'm very grateful to you for your help.

Kind regards,
Jana

1. As a US citizen you are taxable on gains on sales of main residences, but can exclude the first $250,000 of gain if filing a separate return and have lived in the home for at least 2 years.
2. In addition repaying the capital on a foreign mortgage may give rise to a foreign currency gain, taxable in the US as ordinary income and reportable on the annual US tax returns that you are doubtless already filing.
3. The rollover of capital gains rules were abolished a long while back and replaced by the $250,000 exemption.
4. The UK does not tax gains on sales of main residences.
5. On death you can transfer unlimited amounts to each other free of UK inheritance tax because you are both non-UK domiciled.  However you could only transfer $60,000 to your spouse before US estate taxes kick in because he is not a US citizen. 

Guya,
Could I ask a couple of questions about this?

1) Is it therefore better to keep any purchases of a house in my spouse's name and not mine (if spouse is foreign)?  We will have a prenup specifying that all assets are jointly owned, but could we get around the tax?

2) Is there still the provision that you can transfer $100k to a foreign spouse per annum tax free?  I remember reading that somewhere a while ago.

Thank you!
Krs,
katie