Can I deduct off the amount of capital gain from the sale of a house?
It Is possible to deduct any costs that were made for home improvement to reduce the total capital gains on the sale.
There are two types of deductible expenses available to reduce capital gains:
1. Improvements to the home such as extensions or restorations to damages. There are limitations to this, as these improvements must change the value of the house. You cannot redecorate a perfectly good home to suit personal preferences and deduct this from the capital gains. Get a professional to assess what is deductible.
2. Selling expenses, such as commission fees for the estate agent and legal costs.
Does the capital gain exclusion change if I’m married to a US citizen or Green Card Holder?
If you are married to another US citizen or Green Card Holder, the capital gain exclusion will be doubled to $500,000 USD. So, you will not face capital gains tax on any amount from the sale that is under $500,000.
Can my spouse meet the ownership requirements if their name is not on the mortgage?
If the mortgage is only in the US person’s name, the non-US spouse would still meet the ownership test if their name was only on the title deeds.
Do I have to pay US tax if I’m self-employed in the UK?
For Americans operating as self-employed in the UK, generally they do not have to pay any US tax. There are, however, a few unique situations where you might pay a little bit of US tax.
For example:
If you are an American person receiving a £75,000 yearly salary and take an additional £2,000 dividend from shares you own which is tax free in the UK.
You would pay US taxes on the dividend portion as you paid no UK tax so there is no claimable foreign tax credit. With this income level, that dividend will be subject to 15% US tax. Assuming nothing else in the equation, you might have to pay $300 tax on the £2,000 dividend you received.
