Hello,
I am an Indian passport holder who moved to UK in May 2010 after living in US for over ten years. My tax status on the two countries are:
1. US: Non-resident alien for US tax year 2010 (and for all subsequent years) since I was on a visa there.
2. UK: I will be filing as Resident Ordinarily Resident (bought a house in UK in 2010) and non domiciled in the UK. I am a higher rate taxpayer and spouse is basic rate.
I have the following assets in US:
1. Mutual funds in a taxable brokerage account (about $75K).
2. Mutual funds in IRA and 401k (about $110K) (planning to rollover 401k into IRA).
I would like to repatriate these US assets into UK (since I don't have any intention of moving back to US in the near future). I am trying to understand the tax implications in the UK (US taxation is clear for the most part).
1. When I sell a fund from a US taxable account, does the capital gain come under UK's capital gain exemption? I haven't found any information that suggests otherwise. If so, I could sell these assets and repatriate them to UK in batches every year over a few years. I pay US taxes on the dividends from these assets, so this should be covered by the treaty. Please confirm this.
2. I could convert IRA into Roth IRA in batches every year, pay 10-15% tax in US, keep it there for the treatment period (five years) and withdraw it penalty free. When I do the Roth IRA conversion, is the whole amount treated as ordinary income and taxed at 40% in UK (tax treaty may reduce the liability)?
3. Can you recommend a reliable tax accountant?
