Go Back   British Expats / Living & Moving Abroad / Australia

Reply
 
Thread Tools
Old Mar 29th 2017, 4:07 pm   #1
nunger 
Just Joined
 
Joined: Mar 2017
Posts: 3
nunger is an unknown quantity at this point
Default Tax advice - treatment of money left in the UK

Hi all, I've been living and working in the UK for a few years and have built up a small savings fund over the years. I'm currently considering moving back to Australia but would like to leave the majority of my savings invested in the UK when I return. Mostly because the exchange rate is so miserable at the moment and I don't think I'll have much need for the money soon after returning. (Yes, I know the exchange rate may not improve anytime soon, but still...)

I understand that any profits I make from the investment would be considered capital gains taxable in Australia when I eventually sell out and move the money overseas, however, my question is, if the exchange rate was to recover somewhat in that time, would the increase in (AUD) value of the money become taxable too?

ie. If I was moving today and invested £1,000 ($1,620 - AUD/GBP 0.616). In 10 years time say that grew 7% annually and the value of the GBP increased to AUD/GBP 0.5 so the investment is now worth £1,967 ($3,934). Am I taxed purely on the investment capital gain of £967 or on the AUD capital gain of $2,314?

Hope that's clear. Thanks in advance for any assistance!
nunger is offline   Reply With Quote
Old Mar 30th 2017, 1:12 am   #2
BE Enthusiast
 
rammygirl's Avatar
 
Joined: Sep 2005
Posts: 860
rammygirl has a reputation beyond reputerammygirl has a reputation beyond reputerammygirl has a reputation beyond reputerammygirl has a reputation beyond reputerammygirl has a reputation beyond reputerammygirl has a reputation beyond reputerammygirl has a reputation beyond reputerammygirl has a reputation beyond reputerammygirl has a reputation beyond reputerammygirl has a reputation beyond reputerammygirl has a reputation beyond repute
Default Re: Tax advice - treatment of money left in the UK

It is a bit of a grey area but I have been advised that it is unlikely that any currency gain would be taxed or allowed as a loss even. These are personal already taxed funds and you are not playing the currency market as such so even if it is picked up you could still be exempt. Now if you bought pounds to attempt to make money on exchange rates that is different, as would be regular currency transfers for gain.

The main issue you will face is investing or moving the money once you are no longer resident. We cannot move savings accounts for better interest and even trading shares can be problematic! We have managed to invest some of our funds in peer to peer but only a few will allow non UK residents to invest and you still need a UK current account to do so.

Seems that the nets to catch the big fish catch all the tiddlers but still allow the big ones to find the gaps! How can I possibly be money launderering by moving funds within the same bank that have been there for years, yet millions of pounds of dodgy cash seem to have slipped through without any issue.
rammygirl is offline   Reply With Quote
Old Mar 30th 2017, 1:05 pm   #3
nunger 
Just Joined
 
Joined: Mar 2017
Posts: 3
nunger is an unknown quantity at this point
Default Re: Tax advice - treatment of money left in the UK

Thanks Rammygirl.

I was planning to just leave it all in my S&S ISA rather than try and move it around. As hands off as possible. Shame the ISA wrapper means nothing to the Aussie government though.
nunger is offline   Reply With Quote
Old Mar 30th 2017, 10:30 pm   #4
Beoz 
Lost in BE Cyberspace
 
Joined: Dec 2010
Posts: 10,793
Beoz has a reputation beyond reputeBeoz has a reputation beyond reputeBeoz has a reputation beyond reputeBeoz has a reputation beyond reputeBeoz has a reputation beyond reputeBeoz has a reputation beyond reputeBeoz has a reputation beyond reputeBeoz has a reputation beyond reputeBeoz has a reputation beyond reputeBeoz has a reputation beyond reputeBeoz has a reputation beyond repute
Default Re: Tax advice - treatment of money left in the UK

Quote:
Originally Posted by nunger View Post
Thanks Rammygirl.

I was planning to just leave it all in my S&S ISA rather than try and move it around. As hands off as possible. Shame the ISA wrapper means nothing to the Aussie government though.
As a non resident of the UK, I don't believe you can retain your ISA.
Beoz is offline   Reply With Quote
Old Mar 30th 2017, 11:15 pm   #5
nunger 
Just Joined
 
Joined: Mar 2017
Posts: 3
nunger is an unknown quantity at this point
Default Re: Tax advice - treatment of money left in the UK

Quote:
Originally Posted by Beoz View Post
As a non resident of the UK, I don't believe you can retain your ISA.
I was under the impression that I could retain it but no longer contribute to it. Not sure though. I'll look into it...
nunger is offline   Reply With Quote
Old Mar 31st 2017, 12:13 am   #6
BE Forum Addict
 
Joined: Jan 2003
Location: Brisbane
Posts: 1,533
Kiwipaul is a splendid one to beholdKiwipaul is a splendid one to beholdKiwipaul is a splendid one to beholdKiwipaul is a splendid one to beholdKiwipaul is a splendid one to beholdKiwipaul is a splendid one to beholdKiwipaul is a splendid one to beholdKiwipaul is a splendid one to beholdKiwipaul is a splendid one to beholdKiwipaul is a splendid one to beholdKiwipaul is a splendid one to behold
Default Re: Tax advice - treatment of money left in the UK

Quote:
Originally Posted by nunger View Post
I was under the impression that I could retain it but no longer contribute to it. Not sure though. I'll look into it...
That is my understanding as well.

Once you become tax resident in Oz you would have to value all your investments in OZ$ using the exchange rate of the day. When you sell these investments you would again have to value them in OZ$ using the exchange rate when sold and any CGT would be based on these 2 values.

BUT ISA's are a special case as they are tax free and so I believe the Oz taxman considers them income and you have to declare the gain each year and be taxed accordingly.
Kiwipaul is offline   Reply With Quote
Old Mar 31st 2017, 1:18 am   #7
Lost in BE Cyberspace
 
mrken30's Avatar
 
Joined: Jul 2008
Location: Portlandia Metro
Posts: 6,650
mrken30 has a reputation beyond reputemrken30 has a reputation beyond reputemrken30 has a reputation beyond reputemrken30 has a reputation beyond reputemrken30 has a reputation beyond reputemrken30 has a reputation beyond reputemrken30 has a reputation beyond reputemrken30 has a reputation beyond reputemrken30 has a reputation beyond reputemrken30 has a reputation beyond reputemrken30 has a reputation beyond repute
Default Re: Tax advice - treatment of money left in the UK

Also being an ISA , you may not get the kind of statements that make it easy to report tax on. Also the gain may be assessed using the original purchase date, not the date you left the UK.
__________________
A still tongue is a wise tongue, pity anout the fingers
mrken30 is online now   Reply With Quote
Old Mar 31st 2017, 10:48 pm   #8
Beoz 
Lost in BE Cyberspace
 
Joined: Dec 2010
Posts: 10,793
Beoz has a reputation beyond reputeBeoz has a reputation beyond reputeBeoz has a reputation beyond reputeBeoz has a reputation beyond reputeBeoz has a reputation beyond reputeBeoz has a reputation beyond reputeBeoz has a reputation beyond reputeBeoz has a reputation beyond reputeBeoz has a reputation beyond reputeBeoz has a reputation beyond reputeBeoz has a reputation beyond repute
Default Re: Tax advice - treatment of money left in the UK

Quote:
Originally Posted by nunger View Post
I was under the impression that I could retain it but no longer contribute to it. Not sure though. I'll look into it...
I think you might be right.

Anyhow, a bit more info and investment, and tax advice here.

https://www.ft.com/content/905235da-a189-11e0-baa8-00144feabdc0
Beoz is offline   Reply With Quote
Old Apr 13th 2017, 2:33 am   #9
Forum Regular
 
ABCD......'s Avatar
 
Joined: Mar 2013
Posts: 254
ABCD...... has a reputation beyond reputeABCD...... has a reputation beyond reputeABCD...... has a reputation beyond reputeABCD...... has a reputation beyond reputeABCD...... has a reputation beyond reputeABCD...... has a reputation beyond reputeABCD...... has a reputation beyond reputeABCD...... has a reputation beyond reputeABCD...... has a reputation beyond reputeABCD...... has a reputation beyond reputeABCD...... has a reputation beyond repute
Default Re: Tax advice - treatment of money left in the UK

Quote:
Originally Posted by nunger View Post
ie. If I was moving today and invested £1,000 ($1,620 - AUD/GBP 0.616). In 10 years time say that grew 7% annually and the value of the GBP increased to AUD/GBP 0.5 so the investment is now worth £1,967 ($3,934). Am I taxed purely on the investment capital gain of £967 or on the AUD capital gain of $2,314?

Hope that's clear. Thanks in advance for any assistance!
The ATO will look at it purely in AUD terms.

You invested $1,620 and sold for $3,934...

On the subject of money left in the UK, and Australian tax. Premium Bond winnings are tax free in UK, but taxable in Australia.
__________________
ABCDiamond
ABCD...... is offline   Reply With Quote
Reply

Go Back   British Expats / Living & Moving Abroad / Australia


Thread Tools

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off



All times are GMT. The time now is 1:50 am.


We are a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for us to earn fees by linking to Amazon.com and affiliated sites.
Powered by vBulletin: ©2000 - 2017, Jelsoft Enterprises Ltd.
© 1999-2010 BritishExpats.com