Capital gains tax - Aus
#17
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Joined: Aug 2002
Posts: 7,613
Re: Capital gains tax - Aus
Originally posted by Rob:
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.
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.
The second more important point, sounds like I was wrong. Difficult for me to reconcile the 30 days rule with this but I'm no expert. Ie 30 day rule is there to stop the ease of the old 'bed & breakfast', you now have the worry of adverse share price change in the 30 days but can still sell & repurchase to use your CG allowance in a tax year. So I would logically assume that if you returned to UK within 5 yrs having sold & rebought within the 30 days, they'd still consider the shares UK bought - but no.
Cheers - Don
#18
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Joined: Aug 2002
Posts: 7,613
Re: Capital gains tax - Aus
Originally posted by Alan Collett:
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 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.
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 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.
#19
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Posts: n/a
Re: Capital gains tax - Aus
In pleasancefamily wrote:
> Rob - apologies, I seem to have misinterpreted your post or just been
> plain wrong.
No worries. It does seem to fall into the "too good to be true"
category.
> The second more important point, sounds like I was wrong. Difficult
> for me to reconcile the 30 days rule with this but I'm no expert. Ie
> 30 day rule is there to stop the ease of the old 'bed & breakfast',
> you now have the worry of adverse share price change in the 30 days
Yep. Worst case scenario is that the price rises significatnly
after selling, making the repurchase painful.
> Rob - apologies, I seem to have misinterpreted your post or just been
> plain wrong.
No worries. It does seem to fall into the "too good to be true"
category.
> The second more important point, sounds like I was wrong. Difficult
> for me to reconcile the 30 days rule with this but I'm no expert. Ie
> 30 day rule is there to stop the ease of the old 'bed & breakfast',
> you now have the worry of adverse share price change in the 30 days
Yep. Worst case scenario is that the price rises significatnly
after selling, making the repurchase painful.