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Posted Thu, 24 Jun 2021 18:29:09 GMT by AnotherDaveB
I'm a dual US/UK citizen planning to return to the UK in 2022 (after 18 years outside the UK). I have a US Health Savings Account (HSA) that is completely tax free in the US. Am I correct in saying that the UK doesn't recognize HSAs, and as such will treat it as an unwrapped savings/brokerage account? Follow up question (presuming HSAs are UK taxable): For UK capital gains cost basis, would I use the price when the stock was originally bought, or the price when I become UK resident? (Since the account is completely tax free in the US, I have the option of selling everything and repurchasing before I return to the UK in order to reset the cost basis without incurring a UK taxable event. I pretty much have to do this already in order to convert the mutual funds I hold to HRMC reporting compliant ETFs, but if the UK uses the purchase date rather than the residency date, I'd leave it to the last minute)
Posted Mon, 28 Jun 2021 10:03:34 GMT by HMRC Admin 9
Hi, 

Yes you are correct, the UK does not recognise the HSA wrapper.

Capital Gains tax is the difference between the sale price and the purchase price. The UK uses the purchase price rather than the residency date.

Thank you. 
Posted Mon, 28 Jun 2021 22:20:09 GMT by AnotherDaveB
Thanks, that makes sense. Just to confirm I've fully understood: If I own stock (before my return) that I purchased at $1 per share that is now worth $10 a share, and I sell the stock after my return, I would have UK taxable capital gains of $9 per share. However, if I sold the shares the day before I returned (for $9.98 a share) and immediately repurchased the same stock (still at $9.98 a share), and I sell the stock after my return, I would only face UK taxable capital gains of $0.02 per share.
Posted Wed, 30 Jun 2021 12:48:12 GMT by HMRC Admin 9
Hi, 

The UK uses the purchase price rather than the residency date.

Thank you. 
Posted Wed, 30 Jun 2021 16:02:37 GMT by AnotherDaveB
Sorry if my follow up question wasn't clear. What I'm really looking for is confirmation of is that if I buy a stock, sell it, and repurchase it, all before it becomes subject to UK taxation, I should use the repurchase date price going forward, not the original purchase date price. I'm not trying to pull a fast one here, it's just this involves a significant amount of savings I plan to use in retirement, and I don't want to mess it up!
Posted Thu, 01 Jul 2021 13:05:31 GMT by HMRC Admin 9
Hi, 

If you are unable to find the information via the links provided please contact HMRC direct to speak to an advisor: 

Self Assessment: general enquiries

Thank you. 

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