Readers’ forum: Reporting a US capital gain to UK authorities

My client is an individual who is UK resident and domiciled. She owned an investment property in the US for many years which she sold in late April this year.

Under the so-called FIRPTA regulations she suffered a 15% withholding deduction from the sale proceeds which was paid to the US Internal Revenue Service (IRS). She accepted this as the gain will be large. She will return the gain on her UK return along with several other UK gains and I believe she can claim a credit for the tax already paid to the IRS. There is a box on the UK return for this purpose.

She will in due course submit a capital gains computation to the IRS and allowing for the 15% withheld will eventually get a small refund from the IRS (probably in summer 2023) as the 15% withheld will exceed her...