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How can I get around 40% tax

How can I get around 40% tax

Old Oct 17th 2008, 12:18 am
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Default How can I get around 40% tax

Like a lot of other people we have decided to rent our house and wait for the market to improve in the UK. So is there any way around not paying the 40% tax when we do sell our house and transfer the money to Oz
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Old Oct 17th 2008, 12:47 am
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Default Re: How can I get around 40% tax

Originally Posted by fa kin su pa
Like a lot of other people we have decided to rent our house and wait for the market to improve in the UK. So is there any way around not paying the 40% tax when we do sell our house and transfer the money to Oz
As far as I know you don't have to pay tax if it is the only house you own.

you would be liable for CGT if you own two homes and sell one of them
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Old Oct 17th 2008, 1:48 am
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Default Re: How can I get around 40% tax

Originally Posted by Grayling
As far as I know you don't have to pay tax if it is the only house you own.

you would be liable for CGT if you own two homes and sell one of them
I am planning on buying a home in Oz so I guess that would count as 2
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Old Oct 17th 2008, 8:15 am
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Default Re: How can I get around 40% tax

Originally Posted by fa kin su pa
I am planning on buying a home in Oz so I guess that would count as 2
Absolutely not. Totally different co0untries so treat them as different and keep them very very seperate - and you will be fine...

You have 1 house in the UK and thus any debt etc is to the UK government. Ditto for Aus.

Nothing to worry about...
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Old Oct 17th 2008, 8:18 am
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Default Re: How can I get around 40% tax

Originally Posted by andyphilpott
Absolutely not. Totally different co0untries so treat them as different and keep them very very seperate - and you will be fine...

You have 1 house in the UK and thus any debt etc is to the UK government. Ditto for Aus.

Nothing to worry about...
I am not sure you are right.

The ATO tax you on your worldwide income including capital gains.
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Old Oct 17th 2008, 8:19 am
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Default Re: How can I get around 40% tax

Originally Posted by fa kin su pa
I am planning on buying a home in Oz so I guess that would count as 2
Not in the UK it wouldn't
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Old Oct 17th 2008, 8:53 am
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Default Re: How can I get around 40% tax

Originally Posted by Grayling
I am not sure you are right.

The ATO tax you on your worldwide income including capital gains.
Yes I tend agree with Mr G.
If you were not to rent it you may have an argument and claim the you have abridging loan between your two principle residences. But as I understand it if you rent it, then is becomes liable.
Aud and Uk have reciprocal tax agreements so the fact one house in one country and the other elsewhere is irrelevant. Under Aus tax law even Swiss abank accounts should be declared!

As always get proper finanical advice.
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Old Oct 17th 2008, 9:29 am
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Default Re: How can I get around 40% tax

Originally Posted by Grayling
I am not sure you are right.

The ATO tax you on your worldwide income including capital gains.
I agree

Tax evasion should not be promoted - especially on this site

Tax avoidance is the right however of every tax payer.
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Old Oct 17th 2008, 9:35 am
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Default Re: How can I get around 40% tax

Originally Posted by andyphilpott
Absolutely not. Totally different co0untries so treat them as different and keep them very very seperate - and you will be fine...

You have 1 house in the UK and thus any debt etc is to the UK government. Ditto for Aus.

Nothing to worry about...

Thats not correct, Oz & UK have a double counting tax arrangement so if you pay tax in the UK this is deducted from any tax liability in Australia.

You will be liable for capital gains tax although in the UK if is has been your primary residence you have up to a year after you move out of the property to sell it before CGT becomes liable.

Need to check the australian details but you will be liable for all capital gains.
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Old Oct 17th 2008, 9:38 am
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Default Re: How can I get around 40% tax

Originally Posted by andyphilpott
Absolutely not. Totally different co0untries so treat them as different and keep them very very seperate - and you will be fine...

You have 1 house in the UK and thus any debt etc is to the UK government. Ditto for Aus.

Nothing to worry about...
Wrong. As I think you are well aware from when this subject has been raised before - http://britishexpats.com/forum/showt...43#post6788343

To the OP - you may have liabilities in either or both the UK or Australia to income tax on rental profits and capital gains tax on any gains made when you sell but there are quite a few reliefs available and the chances are that any tax you pay will be way less than 40% anyway.
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Old Oct 17th 2008, 9:40 am
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Default Re: How can I get around 40% tax

Originally Posted by chilliman
You will be liable for capital gains tax although in the UK if is has been your primary residence you have up to a year after you move out of the property to sell it before CGT becomes liable.
3 years actually.

Also there are further reliefs from UK CGT available if you rent out a property that used to be your home. And the rate of UK CGT is now 18%.
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Old Oct 17th 2008, 12:04 pm
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Default Re: How can I get around 40% tax

Originally Posted by fa kin su pa
Like a lot of other people we have decided to rent our house and wait for the market to improve in the UK. So is there any way around not paying the 40% tax when we do sell our house and transfer the money to Oz
IF any tax is payable, it would only be on any PROFIT you had made since moving to Australia, NOT on the entire sum.

Assume you have a property in the UK valued at £100k, and £20k in the bank.
You move over when the exchange rate is say 2.4 to the £, therefore you are worth $288,000.

Assume you bring your funds over 3 months later and the exchange rate at the time is 2.45 to the £.
You bring £120k x 2.45 = $294,000.

Your worth has increased by ($294k - $288k =) $6,000 and this is the figure that is taxable as part of your income for the relevant tax year. If the value of the house had gone up or down it would affect the taxable figure accordingly
If you have had the asset for over 12 months, the above capital gain is also halved, and taxed at your normal tax rate.

In many cases, the above figure could be trimmed even further.
 
Old Oct 17th 2008, 1:02 pm
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Default Re: How can I get around 40% tax

Originally Posted by ABCDiamond
IF any tax is payable, it would only be on any PROFIT you had made since moving to Australia, NOT on the entire sum.



If you have had the asset for over 12 months, the above capital gain is also halved, and taxed at your normal tax rate.

In many cases, the above figure could be trimmed even further.
I understood that you had 6 months to transfer any funds to Oz without liability to any tax on increases????
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Old Oct 17th 2008, 2:17 pm
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Default Re: How can I get around 40% tax

Originally Posted by BATS666
I understood that you had 6 months to transfer any funds to Oz without liability to any tax on increases????
Thats what I thought!??
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Old Oct 17th 2008, 11:23 pm
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Default Re: How can I get around 40% tax

Originally Posted by chilliman
Thats what I thought!??
No such 6 month window. Only applies to certain pension transfers.

It's one of the top 10 urban myths belived by many.
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