Blueboy3300

Hi,

My wife and I have been resident status in Australia for nearly 2 years and we are (fingers crossed) in the process of selling our property in the UK with a view to transferring the funds to Australia to buy out here.

We have been in Aus since Nov 2002 and have had the property in the UK since 2000.

Does anyone know whether we will be taxed on the full amount that we will hopefully be bringing into the country?

or

Will we be taxed on the increase in value of the property since we have had resident status?

Also, what is the CGT percentage?

Does anyone know a good tax accountant in the Sydney Eastern Suburbs area that could help with these Expat issues?

Many thanks

Blake & Lisa

brisnick

you will be taxed on your capital gain (ie difference between purchase price and selling price) i believe.

from ATO website under "what is capital gains tax?"

Capital gains tax (CGT) is the tax you pay on any capital gain you make and include on your annual income tax return. There is no separate tax on capital gains, it is merely a component of your income tax. You are taxed on your net capital gain at your marginal tax rate.

look here:

http://www.ato.gov.au/individuals/pa...51#001_002_026

ABCDiamond

Take the value at the date you moved over here Nov 2002, and calculate the A$ value at the time (at about 2.8 to the £ at that time)

Then take the actual NET sale price, and the value in A$ at the time you bring it over.

What is the difference ? You may be taxed on that figure, or if it is treated as an Investment, and you have had it for more than one year, then you could get a 50% reduction on the gain.

Tax is calculated by adding the gain to your normal income, and then calculating standard tax rates agaist it, at the relevant thresholds.

brisnick

but doesn't it work differently if it's a house sale? if it's your primary place of residence then there is no CGT, but if it was your primary residence for part of the time you owned it then you are entitled to a part exemption.

i think this is one for the tax experts

ABCDiamond

"As a general rule, a dwelling is no longer your main residence once you stop living in it. However, in some cases you can choose to have a dwelling treated as your main residence for capital gains tax (CGT) purposes even though you no longer live in it. "

The period from 2000 to Nov 2002 would be exempt, as they lived there.

If they have purchased a property here, then their primary residence would normally be classed as here. Otherwise CGT would be payable on the Australian property, at some stage in the future.

If are only renting, then it may be questionable.

Another useful quote:
If you dispose of the old dwelling within six months of acquiring the new one, both dwellings are exempt for the whole period between when you acquire the new one and dispose of the old one

I'm not sure how UK prices have changed since Nov 2002, but with the dropped exchange rate, it may not show much of a profit anyway ?

eg: £100,000 at Nov 2002 = $280,000
If sold today, and if the net sale proceeds (after agents & solicitors costs etc) were £120,000, at 2.33 this would equal $279,600, no profit anyway.

If there is a profit, I agree a tax agent could be very useful.

renth

A (small) capital loss - which you can offset any future capital gains agains.

Deffo see an accountant if it wasn't your primary place of residence (i.e. if you've bought a house in Australia).

Pobably should see an accountant anyway.

ljj

[quote]
If are only renting, then it may be questionable.[quote]

I phoned the tax office and was told as long as I am renting here and I haven't purchased a property in Australia, our house in the UK is classed as our primary residence and would not be taxed on. Also said we would be allowed a reasonable amount of time to buy which he quoted as 6 years. Been here 2 1/2 but would like to sell in the next year once our tenants give notice to vacate.

Louise

Alan Collett

Not based in Sydney, but please feel able to contact me - probably best to do so via this webpage (excuse the picture!):
http://www.collettandco.com/contact.cfm

In short, there may be an exemption you can make use of that enables you to pay no tax on the disposal of the property in the UK - it depends on whether you have another owned property that is occupied by you as your main residence. If you have been renting your house in Australia and the property in the UK was occupied by you at some stage as your main residence you might have no CGT to pay ...

Best regards.