I am a Uk citizen and non-resident in US. I wish to buy a home in Georgia for my US citizen girlfriend and I to live in when I'm in the US and for her as a main home. The house would be in my name only to avoid any initial gifting issues. Once we are married are there any restrictions on gifting ownership of the property in whole or part (for estate and capital gains benefits) from a non resident alien to a spouse who is a US citizen? If I were to apply for and gain a Green Card would the issue be any different?

Normally, assets can flow between spouses without any restriction. However, the rules are a bit complex if one of the spouses is a non-resident alien.

If and when you get married, I suggest you sit down with a local tax consultant with international tax experience and discuss this issue with him/her.

I understand there is some complexity otherwise I would not have needed to ask the question and need the answers before we marry - thank you anyway for your help.

It is the complexity that spawned my answer. Everyone's situation is a little different, AND much of the advice depends on the income level of the parties involved.

I could ask for more details, but to answer properly, I would need to do some detailed research, and, right now, I just do NOT have the time for such research without being paid for it.

I am not sure why income levels affect the rules associated with gifting for as a non-resident alien my income is non-taxable in the US. I fully understand that you are very busy and cannot undertake unpaid research but the issue is a just one of the application of the law i.e. can a non-resident alien gift a house to a us citizen spouse without incurring a taxable event? You are correct that this is important enough for me to take paid expert advice - I just hoped that there was a simple answer to this. Many thanks.

In U.S. the receiver of gift does not pay any tax. Only the donor files gift tax return. Now since you are nonresident, you are not covered by U.S. taxes and are not required to file gift tax return or pay gift tax. If amount exceeds $100,000 the receiver will be required to file information form 3520.

The reason income level makes a difference is that, if there IS a gift tax, the tax can be offset by using the Unified Credit, which is part of the estate tax equation.

Estate taxes only kick in when the estate exceeds $2 MILLION dollars.

Like I said, it IS fairly complex, hence my advice to get professional, face-to-face advice.

Yeah, it's complex, but not something to avoid answering. He's UK cit and res, and probably UK dom as well. Lots of choices: 1) He can gift CASH outside the US to his wife of any amount, which she can then use to buy him out of his share. 2) He can gift $60,000 of it a year to her (one gift on 31 Dec and another on 1 Jan reduces the costs of valuations) and then it's all just slowly transferred with no gift tax. 3) You haven't bought the house yet? Just give her the cash outside the US and let her buy it in her own name. Job done, easy peasy. 4) Just have it in your name. The US inheritance tax for you is lower than the UK inheritance tax as we got a way bigger tax-free allowance than the UK does and under the US/UK inheritance tax treaty, you get to elect to tax your estate as if you were a US citizen. Thus, it's a nil tax to be concerned about.

Ah, but the real question is: She's just your girlfriend? You aren't wondering about the costs of inhertance tax when your galpal isn't also your wife? And why you buying a girlfreind a house? Where do I meet a boyfriend like you?

And the last question: Why aren't you calling up one of the dozens of US tax accountants who practice in London and Oxford? Geez, we love clients like you to come in the door.

British American Tax