samsson

OK So
Moved to Oz in 2003 as resident
Bought our 1st home in Oz in 3/06
Sold home in Oz in 01/07 70K capital gain

Bought 2nd home in Oz in 01/07
Sold home in UK in 10/08
Sold 2nd home in Oz 11/09 90k capital loss
Bought 3rd home in Oz = staying put, sick of moving

I though I was good to to have a primary residence in Oz AND still have 6 years before selling my home in the UK. But I've been told I have this all wrong and I can only have one primary residence in any country so should pay capital gains tax on either the UK house or both the 1st and 2nd houses I bough here! Can anyone shed some light on this as I'm worried sick about a call from the tax office.....thanks

Buzzy--Bee

Contact Alan Collett at Go Matilda.

BB

goldchoccycoin

I would definitely get professional advice but if you pay the CGT in Australia then surely a $70K gain + $90K loss = $20K loss?

Probably wrong but surely they can't tax a loss?

samsson

OK thanks for the words of encouragement! Perhpas I need to contact a professional as suggested, nip this in the bud before I end up in trouble.

renth

I was thinking that but after selling UK home the Aus home would become primary residence and so not liable for capital gains (or loss, unfortunately).

Maybe because it became a primary residence half way through peropd of ownership he might get approx some kind of discount bringing the capital gain down a bit.

Deffo a job for a good accountant though.

samsson

Trying to find a good accountant - any suggestions? I'm in Sydney but I guess if teh advice is good they don't need to be,
thanks again

commonwealth

you need an accountant who knows both UK and Oz tax laws.

commonwealth

also inquire how the UK-Oz taxation agreement can help you avoid double taxation.

Kiwipaul

You can only have 1 PPOR at any one time

BUT you can choose which it is (so long as you've lived in the property).

So you could claim your PPOR as your UK home until you sold it whist owning property in Oz (which would be investment property and liable for CGT).

Gives you something else to think about.

I agree with Renth that from the point you claim a property as your PPOR you are not liable for any CGT on it neither can you claim a LOSS on it if it drops in value.

commonwealth

remember capital loss can be offset only against capital gain and not against ordinary income.

Wol

Definitely.

>>Probably wrong but surely they can't tax a loss?<<

Well, no. And yes.

It all depends on who "they" are - the UK or Oz.

And "loss" - that depends on which jurisdiction you deal with, and what exchange rate is used.

We sold property in the US at a modest US$ gain, so had to pay capital gains tax on the gain. But, because of the change in the £ - $ rates during our residence, we had actually sold at a UK£ loss. Ergo, we paid tax on - to us - a loss.

Get advice!

samsson

OK - will go and see somone next week but I have a quick question which would solve all my issues!

If I re-do my tax returns do I get to chose which property is my primary residence?

So as the capital gain was made on the UK house, can I say.......I think I'd like to make that my primary residence until I sold it and I'll cough up to the CGT on my Oz houses?
OR
Do the tax office get to choose which one is the primary residence?

eddie007

Uh oh

We brought here then sold there...

Havent had a call from the tax office


............yet

commonwealth

http://www.austlii.edu.au/au/other/d...s/2003/22.html

Article 13 might apply?

louie

Not really. There would not be any UK CGT to pay, so no issue of double taxation. Your problem, if there is one, is purely an Australian tax one. Can't help there, sorry.