Selling Foreign Share - how to calculate tax.

Hibiscouscous

Hello,

I am very lucky to have inherited some stocks and shares in the USA from my late mother, and some were transferred from a trust set up in the US for my cousins and I, and split and transferred into my stocks and shared account managed by cousin.

I am looking to by a house (I am a uk resident and not a us citizen) in the uk and so want to sell my shares to fund this.

How do I go about calculating how much tax I will have to pay in both the US and the UK when I sell them all.

It was suggested by my cousin that we could sell half before this tax year ends and half when the next begins in april.

I think I have about 30 - 40 shares in total, mainly equity, and I inherited them in 2023, and the additional funds last year from the trust.

I am very confusued! I have been quoted £1000 to have them calculated by a tax advisor which I may do but if I can save the money and do it myself that would be better!

eskbanker

Do you have accurate records of the value of each of the holdings on the date you acquired them?

If you do, and dump them into a spreadsheet, the calculation of the gain, and therefore the tax, isn't particularly complex - a good starting point is the CGT guide at gov.uk:

https://www.gov.uk/capital-gains-tax/print

https://www.gov.uk/tax-sell-shares/print

poseidon1

You have two distinct and separate tax situations going on here the most straightforward being the shareholdings directly inherited from your mother. As far as those are concerned your acquisition cost will be probate value on date of mother's death. If the USA estate executors did not provide this then request this data.

The shares derived from the American situs trust is far more complicated. The UK has a complex web of tax rules related to distributions from offshore non UK based trusts. The rules are even more complicated if the trust was discretionary and had been accumulating income from which some or all of the investments had been acquired.

I am not going to begin to explain the offshore trust tax regime, especially since it has since been radically amended as of 5 April 2025.

What I can say is that ( probably unknown to yourself) the act of distributing the shares to you into the UK could have triggered income tax/capital gains tax on your receipt of the shares, with a complex tracing excercise to determine what if any USA trust taxation at source maybe available as a credit against UK tax due. The article below gives you a small inkling of what's involved -

https://www.ouryclark.com/resources/quick-guide/uk-tax-implications-of-us-trusts/#:~:text=All%20distributions%20of%20income%20from,with%20the%20trust%20is%20required.

Given the enormous complexity of being a beneficiary of an offshore trust ( even more so where the trust is American based), I have to wonder if the quote you received is from a practitioner versed in all aspects of UK offshore trust taxation and compliance.

The pool of expertise in that area was not a particularly in deep one, and would tend to be tax experts who are members of STEP ( Society of Trust and Estate Practitioners). Might be wise to query whether the tax accountant who provided the quote has the competency to advise in this archane area of trust taxation. Needless to say if your cousin is UK based they face the same issues. Maybe best to hold off on the sale of the Trust shares pending further clarification of your joint postion.