Non-residents generally do not pay U.S. capital gains tax on stocks or bonds, but they do pay taxes on gains from U.S. real estate and if they are present in the U.S. for 183 days or more in a calendar year. Real estate sales are subject to 15% withholding under FIRPTA.
You generally won't have to pay U.S. capital gains tax on your investment earnings if you're a nonresident alien. You'll usually be subject to the same capital gains tax as U.S. citizens if you're a resident alien.
From 6 April 2020 you need to report and pay your non-resident Capital Gains Tax (CGT) and submit a non-resident Capital Gains Tax return if you've sold or disposed of: residential UK property or land (land for these purposes also includes any buildings on the land) non-residential UK property or land.
Second homes that are not used as primary residences, including vacation homes and investment properties, are considered to be capital assets under IRS rules. That means if you don't pass both the ownership and use tests for the property, as mentioned earlier, then no capital gains tax exclusion is allowed.
The "90-day rule" for non-residents typically refers to two different concepts: in U.S. immigration, it's a guideline for determining if a non-immigrant misrepresented their intent by engaging in certain activities (like unauthorized work or immediate marriage) within 90 days of arrival, leading to visa fraud or inadmissibility. In Canadian tax law, the 90% rule allows non-residents to claim full federal tax credits if 90% or more of their world income is from Canadian sources, otherwise, credits are prorated.
The full 50% CGT discount is generally not available to foreign and temporary residents for assets acquired after 8 May 2012. However, an apportioned discount may be available if you had a period of Australian residency before you became a foreign resident.
If you are a nonresident alien engaged in a trade or business in the United States, you must pay U.S. tax on the amount of your effectively connected income, after allowable deductions, at the same rates that apply to U.S. citizens and residents.
To qualify for 0% capital gains tax, you must have long-term capital gains (assets held over a year) and your taxable income (after deductions) must fall below specific IRS thresholds, which change annually but are roughly <$48,350 for single filers and <$96,700 for married filing jointly for the 2025 tax year, allowing for higher total income when combined with deductions like the standard deduction. The key is keeping your adjusted gross income (AGI) low enough so that after subtracting deductions, your taxable income remains within these limits.
The "6-year rule" for Capital Gains Tax (CGT) in Australia allows you to treat a former main residence as tax-exempt for up to six years after you move out, even if you rent it out, enabling you to avoid CGT on any growth during that period. You qualify by moving out, choosing to treat it as your main home for tax, and can reset the rule by moving back in. If you rent it out for longer than six years, only the portion of the gain after the six-year mark becomes taxable.
On a $100,000 capital gain, you'll likely pay 15% for long-term gains, resulting in about $15,000 in federal tax (plus potential state tax), but it could be 0% or 20% depending on your total taxable income and filing status, while short-term gains are taxed as ordinary income (potentially 22-24%).
Who is considered a temporary non-resident? Individuals that leave the UK for fewer than 5 years (periods of 12 months, not tax years), and prior to leaving have lived in the UK for at least 4 out of 7 of the most recent years, can be treated as being a 'temporary non-resident' upon returning to the UK.
Avoiding capital gains tax: 121 home sale exclusion requirements. Primary residence: You must have owned and used the home as your primary residence for at least two of the five years leading up to the date of the sale.
If the investment in equity shares or mutual funds is held for less than 12 months, it is considered short-term capital gains. The capital gain tax rate for NRIs is 15%, and they are subject to TDS at the same rate.
From 6 April 2020 you need to report and pay your non-resident Capital Gains Tax if you've sold or disposed of: residential UK property or land (land for these purposes also includes any buildings on the land) non-residential UK property or land. mixed use UK property or land.
A common way to defer or reduce your capital gains taxes is to use tax-advantaged accounts. Retirement accounts such as 401(k) plans, and individual retirement accounts offer tax-deferred investment. You don't pay income or capital gains taxes on assets while they remain in the account.
Special Rules for When Foreigners Sell US Property
Under the Foreign Investment Real Property Tax Act (FIRPTA), when a US non-resident sells real property, 15% of the gross sale price will automatically be withheld for the IRS.
The capital gains tax over 65 is a tax that applies to taxable capital gains realized by individuals over the age of 65. The tax rate starts at 0% for long-term capital gains on assets held for more than one year and 15% for short-term capital gains on assets held for less than one year.
The beneficiary claiming the discount must be an Australian resident for tax purposes. The trust must have held the asset for at least 12 months before the CGT event occurs.
How To Avoid Capital Gains Tax In India
BIR Revenue Regulations No. 13-99 exempts citizens and resident aliens from capital gains tax on the sale of their principal residence, provided they fully utilize the proceeds to acquire or construct a new principal residence within 18 months and meet specific documentation requirements.
The 20% rule for capital gains refers to the highest federal tax rate for long-term capital gains, applying to higher income brackets when you sell investments (stocks, real estate) held for over a year, with lower rates of 0% and 15% for lower incomes, and even higher rates for special assets like collectibles. This rate kicks in for single filers earning over approximately $492,300 (2024) or $533,401 (2025), and higher for joint filers, making holding assets over a year a key tax strategy.
Non-resident aliens (NRA) are subject to a 30 percent tax rate on US-source net capital gains if they are in the US for at least 183 days in the taxable year in which the gain occurs. The tax should be withheld at the source of the payment.
Non-resident Indians (NRIs) are taxed on income earned or collected in India. This could be from sources like property rent, share dividends, and investment and savings capital gains, if over a specified limit. Income earned outside India is not taxable in India.
Whereas, if you are a non-resident for tax purposes, you are only required to pay tax on the income you earned in Australia. However, if you are a non-resident for tax purposes and have government debt, such as a higher education loan, you will be required to declare your worldwide income.