hobbis

My accountant advised me that I am resident for tax purposes [ although on a temp 457 visa which is tax advantagous in so much as I'm not taxed on Uk or worldwide earnings] I've been told this is a good position to be in given the current economic situation i.e. - not the best time to transfer assets to OZ. However, how does this position affect my tax when and if I'm granted Permanent residency.

Bermudashorts

So on a 457 visa your UK and other overseas income is not taxable in Australia. When you get PR it is. Simples.

hobbis

No specialist tax advice needed then!

paddyo

what she said!! Also you would need advice when transferring assets depending on what they are. If they are the results of your house sale and you are using those funds to buy a home in Oz then you may not have to pay Oz tax on them but speak to an expert on that.

verystormy

I would be careful. My accountant advised me when i was on 457 that for tax purposes i was resident. No difference.

hobbis

Not so sure I understand you very stormy!

verystormy

Sorry. Badly written. What i was trying to say was that my accountant advised that the Aus Tax office sees no difference between those on 457 visas and permanent residents. You are either resident for tax purposes or not and if you are living in Australia as your main home then you are resident. Visa type makes no difference.

Bermudashorts

I think hobbis is aware that s/he will be tax resident on a 457. They certainly will be, however there is a concession for holders of certain temporary visas re worldwide income and it very much depends upon type of visa.

hobbis

Thanks for clarifying this point. As I see it, the benefit of 457 visa is that you don't pay tax on worldwide income and as many of us are holding on to our Uk properties, albeit for many a temporary state, this is a good financial position to be in. Soon after I arrived, I met an accountant who works for one of the big companies. She had just transferred to OZ and she was holding on to her 457 for as long as possible.

paddyo

The difference of a 457 is that Australia is NOT your main home. You are a Temporary Skilled Visa holder and are intended to return from whence you came. Yes you are a Resident FOR Tax Purposes for there are some variances between a 457 Visa Holder and a full Tax Resident, such as LAFHA, no offset for Childcare, no tax on other worldwide income etc.

jan

Hello
I am a permanent resident u.k. at the moment. The taxation position has many grey areas it is not just a question of which visa or even where you live Domicile is what you need to look at. I believe that you can be living abroad and paying taxes abroad but still liable in the u.k. if domiciled and to be Non dom you may need to cut many ties.
I am not an accountant and need to clarify many points from my own position so far I only have specialists from each country what I need is one who specialises in both u.k. and Australian Tax affairs any recomendations welcome.
Good luck.

Bermudashorts

Domicile has no bearing on income tax for most people. Domicile is relevant for inheritance tax only for most of us.

One circumstance in which domicile comes into play (in the UK this is), is when people (usually very wealthy) claim they are non UK domiciled even though they live in the UK and they do this to avoid UK tax on worldwide income, they instead pay tax on a remittance basis, that is only on what they remit to the UK.

When it comes to income tax, it is residency that matters not domicile.

jan

Thank you for the clarification

If one were to own property in the u.k additional to their main residence and moved abroad for example they owned a property for 5 years and the value had increased say £30,000. and then they moved abroad How long would they need to be out of the country in order to no longer be liable for C.G.T. should one decide to sell the property?

Thank you for any info.

Bermudashorts

I can't follow your example and 'overseas' is not enough information either, where overseas and CGT rules of that country would come into it too.

jan

Well.... I did not say Overseas! I said abroad in other words no longer living/resident/domiciled. In the u.k. And as I was in the Australia forum and speaking as an expat in Perth I thought that would be easy enough to grasp however for your benefit I will clarify my example in an easier format for you to comprehend.

If an individual owned 6 investment houses in the U.K. For ten years and had made a capital growth on the said properties of say 30% for which would be liable to pay C.G.T. If they remained in the U.K. and decided to sell.
But they moved to Australia and decided to sell their U.K. properties that they held for ten years they would no longer as U.K. resident be liable to pay U.K. C.G.T. Now the question Is.... How long would they need to have lived out of the U.K. To have no liability? And they would I assume not need to pay any tax in Australia on the sale as the value would not have changed from the point of entry to Australia until the moment they decided to sell.

Still No worries