Capital gains tax - Aus
Sep 27th 2002, 7:57 am
#1
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Capital gains tax - Aus
Does date and place of acquisition of asset matter? And can one class of asset be offset against another?
Eg say I have UK property and shares. I make a capital gain on property but a loss on shares. I move to Aus. If I sell both in the same tax year, can I offset the loss against the capital gain, in my Aus tax return? Does it matter that I acquired one or both assets before becoming tax resident in Aus?
Thanks - Don (in tax planning mode)
Eg say I have UK property and shares. I make a capital gain on property but a loss on shares. I move to Aus. If I sell both in the same tax year, can I offset the loss against the capital gain, in my Aus tax return? Does it matter that I acquired one or both assets before becoming tax resident in Aus?
Thanks - Don (in tax planning mode)
Sep 27th 2002, 9:02 am
#2
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Location: Offices in Melbourne, Brisbane, Perth, Geelong (Australia), and Southampton (UK)
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Re: Capital gains tax - Aus
Don,
First of all make sure you are measuring the profit or loss with reference to each asset's value when you arrived in Australia - profits or losses prior to your arrival are disregarded from the perspective of Aussie tax.
Gains and losses arising on asset disposals post your arrival can be offset against each other, but also watch out for the 50% discount on assets held for more than 12 months (and this means for 12 months after your arrival in Australia if they were owned when you arrived).
Does this help?
First of all make sure you are measuring the profit or loss with reference to each asset's value when you arrived in Australia - profits or losses prior to your arrival are disregarded from the perspective of Aussie tax.
Gains and losses arising on asset disposals post your arrival can be offset against each other, but also watch out for the 50% discount on assets held for more than 12 months (and this means for 12 months after your arrival in Australia if they were owned when you arrived).
Does this help?
Originally posted by pleasancefamily:
Does date and place of acquisition of asset matter? And can one class of asset be offset against another?
Eg say I have UK property and shares. I make a capital gain on property but a loss on shares. I move to Aus. If I sell both in the same tax year, can I offset the loss against the capital gain, in my Aus tax return? Does it matter that I acquired one or both assets before becoming tax resident in Aus?
Thanks - Don (in tax planning mode)
Does date and place of acquisition of asset matter? And can one class of asset be offset against another?
Eg say I have UK property and shares. I make a capital gain on property but a loss on shares. I move to Aus. If I sell both in the same tax year, can I offset the loss against the capital gain, in my Aus tax return? Does it matter that I acquired one or both assets before becoming tax resident in Aus?
Thanks - Don (in tax planning mode)
Sep 27th 2002, 9:36 am
#3
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Re: Capital gains tax - Aus
Originally posted by Alan Collett:
Don,
First of all make sure you are measuring the profit or loss with reference to each asset's value when you arrived in Australia - profits or losses prior to your arrival are disregarded from the perspective of Aussie tax.
Gains and losses arising on asset disposals post your arrival can be offset against each other, but also watch out for the 50% discount on assets held for more than 12 months (and this means for 12 months after your arrival in Australia if they were owned when you arrived).
Does this help?
Don,
First of all make sure you are measuring the profit or loss with reference to each asset's value when you arrived in Australia - profits or losses prior to your arrival are disregarded from the perspective of Aussie tax.
Gains and losses arising on asset disposals post your arrival can be offset against each other, but also watch out for the 50% discount on assets held for more than 12 months (and this means for 12 months after your arrival in Australia if they were owned when you arrived).
Does this help?
Cheers - Don (and have a beer or 2 by the pool for me, distinctly chilly here in Europe this morning...)
Sep 27th 2002, 9:42 am
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Location: Offices in Melbourne, Brisbane, Perth, Geelong (Australia), and Southampton (UK)
Posts: 6,459
Re: Capital gains tax - Aus
Hello again Don - I am having a lovely cold stubby in our holiday apartment as I type this so hopefully my thought processes aren't too impaired!
In answer to your question - yes, the 50% discount applies to the gain arising once an asset has been owned for more than 12 months.
Back to my beer ...!
In answer to your question - yes, the 50% discount applies to the gain arising once an asset has been owned for more than 12 months.
Back to my beer ...!
Originally posted by pleasancefamily:
Thanks Alan, that helps a lot and mostly rules out my thinking. So I guess that assets would have to be valued as for date of entry, easy for shares and easy to arrange for property. The 50% discount - a bit unclear, does it mean the gain or loss is nominally decreased by 50% after 12 months?
Cheers - Don (and have a beer or 2 by the pool for me, distinctly chilly here in Europe this morning...)
Thanks Alan, that helps a lot and mostly rules out my thinking. So I guess that assets would have to be valued as for date of entry, easy for shares and easy to arrange for property. The 50% discount - a bit unclear, does it mean the gain or loss is nominally decreased by 50% after 12 months?
Cheers - Don (and have a beer or 2 by the pool for me, distinctly chilly here in Europe this morning...)
Sep 27th 2002, 3:18 pm
#5
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Re: Capital gains tax - Aus
In Alan Collett wrote:
> Don,
> First of all make sure you are measuring the profit or loss with
> reference to each asset's value when you arrived in Australia -
> profits or losses prior to your arrival are disregarded from the
> perspective of Aussie tax.
Yep. Don't forget the UK tax implications of selling the shares
after arriving in Oz. My tax advisor suggested the following..
Very soon before reaching Oz, sell shares that are currently profitable
and when you reach Oz, buy them back. This should be done within
30 days of each other.
The UK revenue will see the sale and then repurchase of the shares
as if no sale took place, so there's no tax implication. Since you
bought the shares (again) in Oz, the UK taxman is no longer interested
in what you do with them because the purchase was as a UK non-resident.
From the Oz perspective, you arrived with cash and bought some shares.
You're future Oz CGT is relative to the price you paid for them after
arriving in Oz. So the net effect is you keep the shares and wipe
out the UK CGT liability.
Trick is to sell them buy close together to minimise any
price changes.
I did question whether this was legit and foolproof, and another
adivsor (same company) agreed it was allowed and worth doing.
I'd be interest to hear what Alan thinks of that plan :-)
> Don,
> First of all make sure you are measuring the profit or loss with
> reference to each asset's value when you arrived in Australia -
> profits or losses prior to your arrival are disregarded from the
> perspective of Aussie tax.
Yep. Don't forget the UK tax implications of selling the shares
after arriving in Oz. My tax advisor suggested the following..
Very soon before reaching Oz, sell shares that are currently profitable
and when you reach Oz, buy them back. This should be done within
30 days of each other.
The UK revenue will see the sale and then repurchase of the shares
as if no sale took place, so there's no tax implication. Since you
bought the shares (again) in Oz, the UK taxman is no longer interested
in what you do with them because the purchase was as a UK non-resident.
From the Oz perspective, you arrived with cash and bought some shares.
You're future Oz CGT is relative to the price you paid for them after
arriving in Oz. So the net effect is you keep the shares and wipe
out the UK CGT liability.
Trick is to sell them buy close together to minimise any
price changes.
I did question whether this was legit and foolproof, and another
adivsor (same company) agreed it was allowed and worth doing.
I'd be interest to hear what Alan thinks of that plan :-)
Sep 27th 2002, 6:37 pm
#6
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Re: Capital gains tax - Aus
[SIZE=1]Originally posted by Rob:
Since you
bought the shares (again) in Oz, the UK taxman is no longer interested
in what you do with them because the purchase was as a UK non-resident.
Since you
bought the shares (again) in Oz, the UK taxman is no longer interested
in what you do with them because the purchase was as a UK non-resident.
But don't forget you need to stay non-resident from the UK for at least 5 years or they WILL be interested in any potential capital gain you make (on the re-bought shares, priced as per your original purchase price), and charge you for it if you become tax resident in UK in this 5 year period.
IE you remain potentially liable for UK CGT on any assets until you have been non-resident for 5 tax years.
Sep 27th 2002, 10:25 pm
#7
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Joined: May 2002
Location: Offices in Melbourne, Brisbane, Perth, Geelong (Australia), and Southampton (UK)
Posts: 6,459
Re: Capital gains tax - Aus
Hello Rob.
Three issues immediately spring to mind:
1. You don't achieve anything by selling and re-purchasing the shares from an Aussie CGT perspective as on entry to Australia the value of your shares for Aussie CGT purposes are re-based to their value when you arrive. In fact you are incurring costs associated with the transaction, and also have the risk of the share price rising over the interim 30+ days (although the share price could of course move the other way).
2. If you don't carry out the sell and re-purchase transaction then from a UK tax perspective you only have a tax issue if you sell them before a date that is the end of 5 complete tax years from the date that you left the UK, and then return to live in the UK by that same date - the gain will be assessable in the UK in the tax year that you return.
3. Don't forget that a sale of the shares in the period after departure from the UK and before the end of that same UK tax year remains assessable in the UK - the so called "split year" treatment isn't available for CGT purposes.
Also, I believe that a sale of the shares by you and a purchase of the same assets by your spouse/partner (what I and others know as "bed and spousing") achieves the same end as that suggested by your advisor without the risk of the share price rising over the 30+ day period.
Hope all this helps.
Three issues immediately spring to mind:
1. You don't achieve anything by selling and re-purchasing the shares from an Aussie CGT perspective as on entry to Australia the value of your shares for Aussie CGT purposes are re-based to their value when you arrive. In fact you are incurring costs associated with the transaction, and also have the risk of the share price rising over the interim 30+ days (although the share price could of course move the other way).
2. If you don't carry out the sell and re-purchase transaction then from a UK tax perspective you only have a tax issue if you sell them before a date that is the end of 5 complete tax years from the date that you left the UK, and then return to live in the UK by that same date - the gain will be assessable in the UK in the tax year that you return.
3. Don't forget that a sale of the shares in the period after departure from the UK and before the end of that same UK tax year remains assessable in the UK - the so called "split year" treatment isn't available for CGT purposes.
Also, I believe that a sale of the shares by you and a purchase of the same assets by your spouse/partner (what I and others know as "bed and spousing") achieves the same end as that suggested by your advisor without the risk of the share price rising over the 30+ day period.
Hope all this helps.
Originally posted by Rob:
In Alan Collett wrote:
> Don,
> First of all make sure you are measuring the profit or loss with
> reference to each asset's value when you arrived in Australia -
> profits or losses prior to your arrival are disregarded from the
> perspective of Aussie tax.
Yep. Don't forget the UK tax implications of selling the shares
after arriving in Oz. My tax advisor suggested the following..
Very soon before reaching Oz, sell shares that are currently profitable
and when you reach Oz, buy them back. This should be done within
30 days of each other.
The UK revenue will see the sale and then repurchase of the shares
as if no sale took place, so there's no tax implication. Since you
bought the shares (again) in Oz, the UK taxman is no longer interested
in what you do with them because the purchase was as a UK non-resident.
From the Oz perspective, you arrived with cash and bought some shares.
You're future Oz CGT is relative to the price you paid for them after
arriving in Oz. So the net effect is you keep the shares and wipe
out the UK CGT liability.
Trick is to sell them buy close together to minimise any
price changes.
I did question whether this was legit and foolproof, and another
adivsor (same company) agreed it was allowed and worth doing.
I'd be interest to hear what Alan thinks of that plan :-)
In Alan Collett wrote:
> Don,
> First of all make sure you are measuring the profit or loss with
> reference to each asset's value when you arrived in Australia -
> profits or losses prior to your arrival are disregarded from the
> perspective of Aussie tax.
Yep. Don't forget the UK tax implications of selling the shares
after arriving in Oz. My tax advisor suggested the following..
Very soon before reaching Oz, sell shares that are currently profitable
and when you reach Oz, buy them back. This should be done within
30 days of each other.
The UK revenue will see the sale and then repurchase of the shares
as if no sale took place, so there's no tax implication. Since you
bought the shares (again) in Oz, the UK taxman is no longer interested
in what you do with them because the purchase was as a UK non-resident.
From the Oz perspective, you arrived with cash and bought some shares.
You're future Oz CGT is relative to the price you paid for them after
arriving in Oz. So the net effect is you keep the shares and wipe
out the UK CGT liability.
Trick is to sell them buy close together to minimise any
price changes.
I did question whether this was legit and foolproof, and another
adivsor (same company) agreed it was allowed and worth doing.
I'd be interest to hear what Alan thinks of that plan :-)
Sep 27th 2002, 10:27 pm
#8
Migration Agent
Joined: May 2002
Location: Offices in Melbourne, Brisbane, Perth, Geelong (Australia), and Southampton (UK)
Posts: 6,459
Re: Capital gains tax - Aus
Don,
The anti-avoidance issue that you have mentioned only arises in respect of chargeable assets owned at the date you cease to be a tax resident of the UK.
Best regards.
The anti-avoidance issue that you have mentioned only arises in respect of chargeable assets owned at the date you cease to be a tax resident of the UK.
Best regards.
Originally posted by pleasancefamily:
Thanks for posting - IMO good idea.
But don't forget you need to stay non-resident from the UK for at least 5 years or they WILL be interested in any potential capital gain you make (on the re-bought shares, priced as per your original purchase price), and charge you for it if you become tax resident in UK in this 5 year period.
IE you remain potentially liable for UK CGT on any assets until you have been non-resident for 5 tax years.
Thanks for posting - IMO good idea.
But don't forget you need to stay non-resident from the UK for at least 5 years or they WILL be interested in any potential capital gain you make (on the re-bought shares, priced as per your original purchase price), and charge you for it if you become tax resident in UK in this 5 year period.
IE you remain potentially liable for UK CGT on any assets until you have been non-resident for 5 tax years.
Sep 27th 2002, 10:38 pm
#9
Migration Agent
Joined: May 2002
Location: Offices in Melbourne, Brisbane, Perth, Geelong (Australia), and Southampton (UK)
Posts: 6,459
Re: Capital gains tax - Aus
Hello Rob.
Three issues immediately spring to mind:
1. You don't achieve anything by selling and re-purchasing the shares from an Aussie CGT perspective as on entry to Australia the value of your shares for Aussie CGT purposes are re-based to their value when you arrive. In fact you are incurring costs associated with the transaction, and also have the risk of the share price rising over the interim 30+ days (although the share price could of course move the other way).
2. If you don't carry out the sell and re-purchase transaction then from a UK tax perspective you only have a tax issue if you sell them before a date that is the end of 5 complete tax years from the date that you left the UK, and then return to live in the UK by that same date - the gain will be assessable in the UK in the tax year that you return.
3. Don't forget that a sale of the shares in the period after departure from the UK and before the end of that same UK tax year remains assessable in the UK - the so called "split year" treatment isn't available for CGT purposes.
Also, I believe that a sale of the shares by you and a purchase of the same assets by your spouse/partner (what I and others know as "bed and spousing") achieves the same end as that suggested by your advisor without the risk of the share price rising over the 30+ day period.
Hope all this helps.
Three issues immediately spring to mind:
1. You don't achieve anything by selling and re-purchasing the shares from an Aussie CGT perspective as on entry to Australia the value of your shares for Aussie CGT purposes are re-based to their value when you arrive. In fact you are incurring costs associated with the transaction, and also have the risk of the share price rising over the interim 30+ days (although the share price could of course move the other way).
2. If you don't carry out the sell and re-purchase transaction then from a UK tax perspective you only have a tax issue if you sell them before a date that is the end of 5 complete tax years from the date that you left the UK, and then return to live in the UK by that same date - the gain will be assessable in the UK in the tax year that you return.
3. Don't forget that a sale of the shares in the period after departure from the UK and before the end of that same UK tax year remains assessable in the UK - the so called "split year" treatment isn't available for CGT purposes.
Also, I believe that a sale of the shares by you and a purchase of the same assets by your spouse/partner (what I and others know as "bed and spousing") achieves the same end as that suggested by your advisor without the risk of the share price rising over the 30+ day period.
Hope all this helps.
Originally posted by Rob:
In Alan Collett wrote:
> Don,
> First of all make sure you are measuring the profit or loss with
> reference to each asset's value when you arrived in Australia -
> profits or losses prior to your arrival are disregarded from the
> perspective of Aussie tax.
Yep. Don't forget the UK tax implications of selling the shares
after arriving in Oz. My tax advisor suggested the following..
Very soon before reaching Oz, sell shares that are currently profitable
and when you reach Oz, buy them back. This should be done within
30 days of each other.
The UK revenue will see the sale and then repurchase of the shares
as if no sale took place, so there's no tax implication. Since you
bought the shares (again) in Oz, the UK taxman is no longer interested
in what you do with them because the purchase was as a UK non-resident.
From the Oz perspective, you arrived with cash and bought some shares.
You're future Oz CGT is relative to the price you paid for them after
arriving in Oz. So the net effect is you keep the shares and wipe
out the UK CGT liability.
Trick is to sell them buy close together to minimise any
price changes.
I did question whether this was legit and foolproof, and another
adivsor (same company) agreed it was allowed and worth doing.
I'd be interest to hear what Alan thinks of that plan :-)
In Alan Collett wrote:
> Don,
> First of all make sure you are measuring the profit or loss with
> reference to each asset's value when you arrived in Australia -
> profits or losses prior to your arrival are disregarded from the
> perspective of Aussie tax.
Yep. Don't forget the UK tax implications of selling the shares
after arriving in Oz. My tax advisor suggested the following..
Very soon before reaching Oz, sell shares that are currently profitable
and when you reach Oz, buy them back. This should be done within
30 days of each other.
The UK revenue will see the sale and then repurchase of the shares
as if no sale took place, so there's no tax implication. Since you
bought the shares (again) in Oz, the UK taxman is no longer interested
in what you do with them because the purchase was as a UK non-resident.
From the Oz perspective, you arrived with cash and bought some shares.
You're future Oz CGT is relative to the price you paid for them after
arriving in Oz. So the net effect is you keep the shares and wipe
out the UK CGT liability.
Trick is to sell them buy close together to minimise any
price changes.
I did question whether this was legit and foolproof, and another
adivsor (same company) agreed it was allowed and worth doing.
I'd be interest to hear what Alan thinks of that plan :-)
Sep 28th 2002, 6:32 am
#10
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Thread Starter
Joined: Aug 2002
Posts: 7,613
Re: Capital gains tax - Aus
Originally posted by Alan Collett:
Don,
The anti-avoidance issue that you have mentioned only arises in respect of chargeable assets owned at the date you cease to be a tax resident of the UK.
Best regards.
Don,
The anti-avoidance issue that you have mentioned only arises in respect of chargeable assets owned at the date you cease to be a tax resident of the UK.
Best regards.
Scenario: I sell my UK principal private residence for GBP400K before I emigrate to Aus, no CGT payable.
I arrive in Aus and become tax resident there. I buy a UK flat for GBP200K to rent out and an Aus house for GBP200K to live in. 3 years later I decide to move back to the UK. I will make GBP50K capital gain on both the UK flat and the Aus house.
I move back to the UK and become tax resident there. I sell both my UK flat and my Aus house realising in total GBP500K (GBP100K capital gain) so that I can buy a big house in the UK. What capital gain am I liable for and where?
I guess dates of sale relative to my tax resident status are important here?
Sorry to trouble you on your break, long live GoMatilda.com, no lard!
Cheers - Don
Sep 28th 2002, 8:11 am
#11
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Posts: n/a
Re: Capital gains tax - Aus
In Alan Collett wrote:
> Hello Rob.
> Three issues immediately spring to mind:
> 1. You don't achieve anything by selling and re-purchasing the shares
> from an Aussie CGT perspective as on entry to Australia the value
> of your shares for Aussie CGT purposes are re-based to their value
> when you arrive. In fact you are incurring costs associated with
> the transaction, and also have the risk of the share price rising
> over the interim 30+ days (although the share price could of
> course move the other way).
Yep. I'm ok with that.
> 2. If you don't carry out the sell and re-purchase transaction then
> from a UK tax perspective you only have a tax issue if you sell
> them before a date that is the end of 5 complete tax years from
> the date that you left the UK, and then return to live in the UK
> by that same date - the gain will be assessable in the UK in the
> tax year that you return.
So selling on arrival in Oz means waiting 5 years before returning
to the UK if UK tax is to be avoided. That's straightforward enough
and useful to know.
> 3. Don't forget that a sale of the shares in the period after
> departure from the UK and before the end of that same UK tax year
> remains assessable in the UK - the so called "split year"
> treatment isn't available for CGT purposes.
That doesn't affect the "sell before leaving, buy back on arrival" plan
does it ?
> Also, I believe that a sale of the shares by you and a purchase of the
> same assets by your spouse/partner (what I and others know as "bed and
> spousing") achieves the same end as that suggested by your advisor
> without the risk of the share price rising over the 30+ day period.
Ok. All I need now is a wife ;-)
> Hope all this helps.
Indeed. Thanks.
> Hello Rob.
> Three issues immediately spring to mind:
> 1. You don't achieve anything by selling and re-purchasing the shares
> from an Aussie CGT perspective as on entry to Australia the value
> of your shares for Aussie CGT purposes are re-based to their value
> when you arrive. In fact you are incurring costs associated with
> the transaction, and also have the risk of the share price rising
> over the interim 30+ days (although the share price could of
> course move the other way).
Yep. I'm ok with that.
> 2. If you don't carry out the sell and re-purchase transaction then
> from a UK tax perspective you only have a tax issue if you sell
> them before a date that is the end of 5 complete tax years from
> the date that you left the UK, and then return to live in the UK
> by that same date - the gain will be assessable in the UK in the
> tax year that you return.
So selling on arrival in Oz means waiting 5 years before returning
to the UK if UK tax is to be avoided. That's straightforward enough
and useful to know.
> 3. Don't forget that a sale of the shares in the period after
> departure from the UK and before the end of that same UK tax year
> remains assessable in the UK - the so called "split year"
> treatment isn't available for CGT purposes.
That doesn't affect the "sell before leaving, buy back on arrival" plan
does it ?
> Also, I believe that a sale of the shares by you and a purchase of the
> same assets by your spouse/partner (what I and others know as "bed and
> spousing") achieves the same end as that suggested by your advisor
> without the risk of the share price rising over the 30+ day period.
Ok. All I need now is a wife ;-)
> Hope all this helps.
Indeed. Thanks.
Sep 28th 2002, 2:23 pm
#12
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Thread Starter
Joined: Aug 2002
Posts: 7,613
Re: Capital gains tax - Aus
Originally posted by Rob:
> 3. Don't forget that a sale of the shares in the period after
> departure from the UK and before the end of that same UK tax year
> remains assessable in the UK - the so called "split year"
> treatment isn't available for CGT purposes.
That doesn't affect the "sell before leaving, buy back on arrival" plan
does it ?
> 3. Don't forget that a sale of the shares in the period after
> departure from the UK and before the end of that same UK tax year
> remains assessable in the UK - the so called "split year"
> treatment isn't available for CGT purposes.
That doesn't affect the "sell before leaving, buy back on arrival" plan
does it ?
For UK, you're buying back within 30 days so you never 'really' sold the shares and so you remain potentially liable for UK CGT when you do eventually sell them - based on your original purchase price (not the price valid on second time you purchase), all assuming you sell the shares before you have been away from the UK 5 tax years
For Aus, the shares are valued at share price on your date of entry into Aus, not the original purchase price.
Cheers - Don
Sep 28th 2002, 4:38 pm
#13
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Posts: n/a
Re: Capital gains tax - Aus
In pleasancefamily wrote:
> Originally posted by Rob:
>> > 3. Don't forget that a sale of the shares in the period after
>> > departure from the UK and before the end of that same UK
>> > tax year remains assessable in the UK - the so called
>> > "split year" treatment isn't available for CGT purposes.
>> That doesn't affect the "sell before leaving, buy back on arrival"
>> plan
>> does it ?
> Yes it does. I think Alan's point was that it's pointless to
> repurchase the shares (yourself - not spouse) for both UK and Aus:
I thought the spouse twist on the plan was useful to rule out
any consequences of price changes since buyer and seller are
effectively the same entity, so there's no scope for a net
gain or a net loss during the sale then repurchase.
> For UK, you're buying back within 30 days so you never 'really' sold
> the shares and so you remain potentially liable for UK CGT when you do
> eventually sell them
This is the crux of the issue and what I've been professionally
advised is not the case.
> Originally posted by Rob:
>> > 3. Don't forget that a sale of the shares in the period after
>> > departure from the UK and before the end of that same UK
>> > tax year remains assessable in the UK - the so called
>> > "split year" treatment isn't available for CGT purposes.
>> That doesn't affect the "sell before leaving, buy back on arrival"
>> plan
>> does it ?
> Yes it does. I think Alan's point was that it's pointless to
> repurchase the shares (yourself - not spouse) for both UK and Aus:
I thought the spouse twist on the plan was useful to rule out
any consequences of price changes since buyer and seller are
effectively the same entity, so there's no scope for a net
gain or a net loss during the sale then repurchase.
> For UK, you're buying back within 30 days so you never 'really' sold
> the shares and so you remain potentially liable for UK CGT when you do
> eventually sell them
This is the crux of the issue and what I've been professionally
advised is not the case.
Sep 29th 2002, 12:03 am
#14
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Joined: May 2002
Location: Offices in Melbourne, Brisbane, Perth, Geelong (Australia), and Southampton (UK)
Posts: 6,459
Re: Capital gains tax - Aus
Hello again Don.
Just a quick reply here, as I'm nervous about giving advice of such a significant nature on a Forum such as this - and I'd never earn a living if I were to do so! So feel able to mail me directly if you want me to look at a tax planning strategy.
So only one comment here: if you return to the UK and cease to be a tax resident in Australia any gain arising on the property in Australia on its sale may well be chargeable to tax in Australia (it has, in the tax parlance, what is called the "necessary connection with Australia") - and at Australia's higher non-resident rates of tax to boot.
Best regards.
Just a quick reply here, as I'm nervous about giving advice of such a significant nature on a Forum such as this - and I'd never earn a living if I were to do so! So feel able to mail me directly if you want me to look at a tax planning strategy.
So only one comment here: if you return to the UK and cease to be a tax resident in Australia any gain arising on the property in Australia on its sale may well be chargeable to tax in Australia (it has, in the tax parlance, what is called the "necessary connection with Australia") - and at Australia's higher non-resident rates of tax to boot.
Best regards.
Originally posted by pleasancefamily:
Thanks Alan. Raises a couple of points.
Scenario: I sell my UK principal private residence for GBP400K before I emigrate to Aus, no CGT payable.
I arrive in Aus and become tax resident there. I buy a UK flat for GBP200K to rent out and an Aus house for GBP200K to live in. 3 years later I decide to move back to the UK. I will make GBP50K capital gain on both the UK flat and the Aus house.
I move back to the UK and become tax resident there. I sell both my UK flat and my Aus house realising in total GBP500K (GBP100K capital gain) so that I can buy a big house in the UK. What capital gain am I liable for and where?
I guess dates of sale relative to my tax resident status are important here?
Sorry to trouble you on your break, long live GoMatilda.com, no lard!
Cheers - Don
Thanks Alan. Raises a couple of points.
Scenario: I sell my UK principal private residence for GBP400K before I emigrate to Aus, no CGT payable.
I arrive in Aus and become tax resident there. I buy a UK flat for GBP200K to rent out and an Aus house for GBP200K to live in. 3 years later I decide to move back to the UK. I will make GBP50K capital gain on both the UK flat and the Aus house.
I move back to the UK and become tax resident there. I sell both my UK flat and my Aus house realising in total GBP500K (GBP100K capital gain) so that I can buy a big house in the UK. What capital gain am I liable for and where?
I guess dates of sale relative to my tax resident status are important here?
Sorry to trouble you on your break, long live GoMatilda.com, no lard!
Cheers - Don
Sep 29th 2002, 12:05 am
#15
Migration Agent
Joined: May 2002
Location: Offices in Melbourne, Brisbane, Perth, Geelong (Australia), and Southampton (UK)
Posts: 6,459
Re: Capital gains tax - Aus
Rob,
In answer to your question below: no, it doesn't.
Regards.
In answer to your question below: no, it doesn't.
Regards.
Originally posted by Rob:
In Alan Collett wrote:
> Hello Rob.
> 3. Don't forget that a sale of the shares in the period after
> departure from the UK and before the end of that same UK tax year
> remains assessable in the UK - the so called "split year"
> treatment isn't available for CGT purposes.
That doesn't affect the "sell before leaving, buy back on arrival" plan
does it ?
> Hope all this helps.
Indeed. Thanks.
In Alan Collett wrote:
> Hello Rob.
> 3. Don't forget that a sale of the shares in the period after
> departure from the UK and before the end of that same UK tax year
> remains assessable in the UK - the so called "split year"
> treatment isn't available for CGT purposes.
That doesn't affect the "sell before leaving, buy back on arrival" plan
does it ?
> Hope all this helps.
Indeed. Thanks.