If I sell my house in the UK after becoming an LPR am I liable for CGT?

We are struggling to sell our house in the UK.  I have 4.5 months left to activate my IR-1 visa.

I am not liable for UK CGT on our UK house given that it is our primary (and only) dwelling.

I know an option is to take a trip to the US and activate the visa, and if needed apply for a re-entry permit and return to the UK for a time.  But I want to know if I become liable to pay US CGT on my UK house should I sell is AFTER becoming an LPR.

I've asked on other forums and there appears to be a difference of opinion on this, some saying that I would be liable for CGT, others saying their tax professonal told them otherwise.

Any other info you need please ask.

Thanks

BG36

If you activate the green card you are a US resident from that date (and subject to US tax on worldwide income & gains).

You may however already be a US resident under the substantial presence test - or because you and your wife have elected (or will elect) under section 6013(g) to file joint US returns -(this is standard tax planning).

If you owned & used the house for 2 out of 5 years before sale you will then get to claim the $250,000 or $500,000 exclusion.

We have owned and lived in the property for the last 8 years.  We still live there and will do up until it's sale.

I am not a US resident by any stretch of the imaginiation (or residency regulations) as I have only ever been there for vacations of up to two weeks at a time.

I guess what you are saying is that as long as I don't stay out of the US for more than two years following the sale, we can exclude $250k of value (the total sale price would be less than that, and the gain less than half of that) from being subject to US CGT?  Therefore, although I may have to report it, I wouldn't have to pay any CGT on the profit.

Is this correct?

Thanks

Yup!

You can still jointly elect under 6013(g) to file joint US returns even if you never live there - and you'd choose to that if it saved you money.

Excellent as always Guya, thanks.

So that's a realistic option for us then....if no joy by November, I can book a trip over there maybe for the holidays to activate the visa, apply for a re-entry permit and come back.

Although having said that, if we don't sell the house soon, it won't be worth selling until the housing market comes back up again, which could be 5 to 10 years, and the re-entry permit is only good for two.  I suppose the only other option is to not use the visa and re-apply after selling the house...to be honest it's as cheap to go through the whole visa process again as it is to pay for two flights to the US.