Centurion

It was raised before and generally accepted that although the CGT event occurs in the UK, not declaring it in Australia is something that is, technically, tax evasion if you are liable as an Australian resident.

Really since you are only going to pay the tax on the CG effectively once, not in both countries it doesnt really matter anyway.

The most important point to the OP is that in that position I would :

Just before you rent your house out get a written valuation from three estate agents. Get that valuation as high as you reasonably can as to its market value. Pay for the valuation if need be so its higher than maybe an estate agent who thinks he will be trying to sell your house.

When the time to sell your UK house comes you are liable then for the difference between your valuations and the sale price only as a CG. If your valuations were high and the market has slumped since, hey...less tax. Get my drift ?

Make sure the valuations are reasonable and cannot reasonably be challenged if it ever came to it (which is wont most likely anyhow).

Ultimately nothing posted on the interwebz should be taken as any sort of sensible advice and financial advice is always smart and can save you heaps later down the line.

MartinLuther

If you're a tax resident (and not temp resident) then Aus can tax your worldwide earnings and gains. I'm not sure why this comes as a surprise to anyone because it's the same in the UK (unless you're rich enough and foreign enough to get not-resident for tax purposes status).

As for the OP's question. I don't think you have to worry about UK CGT. Firstly, if it was your own home, then the rules give you 3+ years (depending on how long you lived there and how long you rented) without any CGT liability. For me I lived in a house for 9 years and rented it for 7 and didn't have to pay anything.

The other UK rule is if you leave and stay away for more than 5 years (I think) you don't get CGT on anything you sell after the tax year in which you left.

So UK CGT is not a problem.

Aus has a rule that allows you to sell your home within 6 years if you don't buy another home. The UK property will count under this rule. If you do by a second home then you will be subject to CGT on the INCREASE in the value of the house when you come to sell it.

So from an Aus point of view you're better off if you can wait to sell the UK home before you buy the Aus home.

On rental income. The UK is still interested in this but in most cases the profit from renting does not exceed the personal allowance in which case you don't pay any tax to the UK. This profit can be taxed by the Aus tax man. However, since July this year any rental losses on the UK property can be offset against your Aus income.

As said earlier the 6 months rule is only for certain pensions and the free massages at the airport on arrival are a bit of a myth as well

BadgeIsBack

I rented out my primary residence for a few years. The main criterion was that it used to be my home - for all of 7 months - I believe 6 months is the length of time. EDIT (The 3 years figure relating to something else) I recall worrying whether I had miscalculated by a few weeks...(!)

James516

Lets assume you get a valuation of (say) £200K now for you house in the UK, rent it out for year for (say) £10000 and then sell it for £150K. I take it you will have to pay Australian income tax on the £10000 (less mortgage interest, expenses etc) and will have a capital loss of £50K. Can you offset this capital loss against future capital gains in Australia? For how long? Why don't I ask an accountant

ABCDiamond

Start here: http://www.ato.gov.au/individuals/co...1/002&st=&cy=1

Then see an accountant