MrCro

Looks like we have no choice but to leave our beaten £'s in the UK and go to Oz hoping to earn some super strong aussie dollars!

We are lucky enough to be able borrow aussie dollars off family on Sydney to tide us over with first years rents etc so can leave everything in UK but it does mean we will need to find work quickly which could be a challenge!

I have read lots of threads about being charged tax on profit made if we leave our £'s in UK until we can get a better exchange rate.

All very conflicting though as some say yes you will be taxed and others say no on personal money.

So, can anyone confirm one way or another? Have you been taxed on profit after delaying sending your £'s to Oz???

Thanks for any help on this!

Sooty and Sweep

Mate,

You need to read these two threads of mine below, let me know what your thoughts are?

I have read, researched, read, asked, done the bloody splits?

Sooty.


http://britishexpats.com/forum/showthread.php?t=628595


http://britishexpats.com/forum/showthread.php?t=485444

MrCro

sooty, your were amongst the many I have read, be nice to get a straight
answer!?

I have made currency moves last time I was in Oz 6 months+ after arrival at different rates.

Never declared anything as was unaware of implications but I was also studying then so no tax returns!?

What happens with those who are backwards and forwards (ping pong poommes!) Must get complicated when money back and forth!!??

So lets say one moved to Oz to try things out this week @rate of 1.905 (gulp!!) but kept money in UK.

In 9-12 months the rate goes really high (2.05!!!!! yipeeee!!!!) so one decides to bring money to Oz, would it be worth flying back to UK "having decided Oz isn't really for me!!!

Then return back to Oz in 4 weeks having realised "oops I made a mistake, Oz is for me" and then bring all cash back?

Would that work - think I'm rambling now!? So confused

Sooty and Sweep

I am in exactly the same position as you. Believe me, its testing at times.

My one bit of advice to you, is do not listen to others on here, including me, no one knows for sure, no one know's. JAJ is great, he helped me a little.


I have thought about it, covered all scenario's. The best option, one i may use, i prior to exchanging any money of substatial amount, get a private hearing from the ATO. If, it goes against you, then you make your decision, based on the outcome, .i.e. tax they say you will have to pay due to Forex Gains, if you move the money. So then at least you know what you owe prior to exchange, that way you can leave it in Sterling should the tax take be overly excessive?

It's a grey area, and anyone who says it is not, well they are probably either living in Australia, and were unaware of this "maybe ruling" so would rather think it does not exist, OR they are living in Australia, and would like to have the Forex Gains problem, you know a substantial amount of cash to gain on in the first place (money is a tad short at present); so would like you to have to pay tax on your gains, because it is there way of saying tough, you should not be so well off? Human nature!

Good Luck my friend, there are a few others on here who have a good insight into these matters, i will not mention their names, not my way; as it is a private matter for them to answer. But all you can do is keep plugging away on here, sooner or later you will be where i am am, back to where i started.

Sooty.

MrCro

sooty,

with you on this one, we have a substantial amount to exchange so scary how much is to be gained/lost with exchange rates.

I have read and read the ATO forex notes and very confusing, was reading earlier that rules are different if foreign accounts <$250k but not sure if that is one account per person and also not clear what difference that makes!?

I have a contact at KPMG via family in Sydney, might see if I can get some advice as a favour.

Will let you know!

Mean time be interesting to know if anyone acually paid any tax on such 'profits'? Or had ruling that private funds do not incur tax!?

lastere

how old are you, 16?

things are simple: you can't say oops i changed my mind twice in 4 weeks.
you need to select a residence for tax purposes and you are taxed on the ANNUAL income/gains by the respective govt. (gangsters) it doesn't matter brit/aus.

if you made a gain/loss that year it goes against your taxable, REGARDLESS if you "bring it in the country or not". the same with a business/property overseas whatever, provided there are no double taxation treaties and you paid the tax in the other country.

that is of course if you declare them, or are worried they can find your assets. which is probably why the 250k limit is for. below that is not worth gangsters' time to track your international booty down.

MartinLuther

To answer the thread question: Yes.

Here is the ruling. http://www.ato.gov.au/rba/content.as...tent/65872.htm


The $250k election you mention in a later post just says that if you have less than $250k in a foreign bank account and you make the election then you can do all the exchange calculations as a single calculation rather than calculating each transaction individually. It's just a simplification thing.

MrCro

16!!?? Love helpful comments!!! There are countless tales of expats who do go back to UK then genuinley realise they made a mistake so head back to Oz after a shortwhile - hence throwing in that scenario!!

if the UK amount in £'s stays the same is it a gain or not??? The only 'gain' is the amount of A$'s you end up with?

Think I'm just gonna go to accountants regarding this as need some expert guidance.

Sooty and Sweep

MrCro, stick with this site, there are some good guys on here, real good guys, there are also some jerks, you make your own opinion?

MartinLuther, is a good guy, very articulate, read his link!

Sooty

MrCro

I was in Oz last in 2005-2006, had my money in Oz bank then and brought my money back to UK from Australian account in 2007 when £ was buying 2.33 A$.

So if I go back now and then send funds in say 6 months does the amount I sent back to UK and the rate that day have anything to do with this for tax calculation purposes I wonder?

Also I was first working in Oz 1990-1992 so resident for tax purposes then, returned to UK 1992-2005 so UK tax resident then back to Oz 2005-2006 now in UK but be back in Oz (for good this time) by early new year. So I think my tax residency is abit more grey than usual!!??

MrCro

You can spot the people who have no money a mile off hey!?

Worked bloody hard for my money (sweat blood and tears) so will work just as hard to get the most out of it!

I read the link, thanks Martin Luther, still clear as mud to my tired eyes! ATO like to waffle on without getting to the point! That link reads like everybody would pay tax regardless of when they transfer although there is a comment on trasnferring funds "shortly after your arival" but with no definition of what is considered 'shortly'????

MartinLuther

When you become tax resident each time, what happened before is irrelevant (except for funds that you've left in Aus). It doesn't really matter that you've lived here before. The rate at which you bought pounds when you moved to the UK has no relevance for the rate you get when you move back.

The reality is that it's a bit of a mishmash which has come about by trying to close loopholes. For certain if you move money from an account younger than 1985 and older than 2003 then you're subject to CGT provisions like I was. If you move from an account younger than 2003 then you're under different provisions and I've not seen a definitive ruling on whether you get hit or not.

MrCro

I have an account from 1986 and some from 90's and 2000's.

Did have a pre 1985 account with Barclays but they closed it when I turned 16!!!

Which account is most beneficial to use then I wonder?

MartinLuther

A pre 20 September 85 account is the most useful (but few would have that now) as it was pre-GST. I've seen a ruling on this and it's outside the CGT rules. (Unfortunately for the person in the ruling he was asking for a loss to be considered and was told it didn't apply.)

As said above, an account between 1985 and 2003 will be subject to CGT provisions, which if you have to use it does give you a 50% discount on the gain if you make the gain more than 12 months after you move.

As for a post 2003 account, I've yet to see anything definitive on this. There is a provision in there that states that money for personal use (or something like that) is exempt. I think most people interpret this as they are exempt when they move their migration money. This may be true or the ATO may just mean money that you take on holidays and business trips. Again, I've not seen a ruling one way or the other on this. To be frank, if you went down the route of assuming that it wasn't taxable, it is unlikely that you'll get pulled up on it and if they did they'd probably only get you for the original tax and waive the penalties. Obviously that is just an opinion and not financial advice. If it does turn out that post 2003 is taxable then it has the downside that you don't get the 50% discount.

I'm not sure if you can get a private ruling from abroad but if you are coming here soon you can ask for a private ruling on a situation that has not happened yet. So you could ask the "what if" question as to what happens if you move the money from a post 2003 account. If the answer is that you'll get taxed then you can then consider your options. (If you get an answer from a private ruling, rather than the telephone lines who are not always reliable on complex issues, could you please tell us the answer?)

I wish I'd known all this before I came. (I also wish I hadn't have used an accountant but that probably requires a lot more explanation than I can give now.)

koalakim

Oh gawd - I'm so confused about all this.

Spoke to my accountant last week and showed him the piece of paper that Go Matlida had on their site - and yes we are treated as currency dealers! He said that amounts of over $10k are flagged as they come into the country......lots of $9999k to come in then?

Okay....I now have my house sale money (yipeee!) when we became tax resident the rate was 2.48 in Jan 2007 so if I bring it in under that surely I can't be done for CGT on the forex? Can I get a rebate even? Or is it related to the date I sold the house? Or does it all relate to the account from which I brought it in from...do they check every single bank account from a migrant? !

Any insight into this would be much appreciated as I read all the links and still no clearer!

Cheers

K