Living in Oz, selling in UK
Jan 15th 2005, 6:22 am
#1
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Location: Melbourne
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Living in Oz, selling in UK
I am very ignorant when it comes to mortgages, tax, legal issues and am fed up of trying to trawl through different official sites for an answer to my questions. Can anyone offer any help on a couple of issues? I have a flat in the UK which I am currently renting out as I moved to Oz 2 years ago. Now I want to sell it, and buy somewhere in Melbourne, and wondered what I need to consider eg; getting the money into Oz (expenses, tax etc), getting a mortgage here, and also somebody told me I might have to pay capital gains tax because I haven't been living in it? Can anyone shed any light on these things? 
Jan 15th 2005, 6:37 am
#2
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Re: Living in Oz, selling in UK
Originally Posted by juzzer
I am very ignorant when it comes to mortgages, tax, legal issues and am fed up of trying to trawl through different official sites for an answer to my questions. Can anyone offer any help on a couple of issues? I have a flat in the UK which I am currently renting out as I moved to Oz 2 years ago. Now I want to sell it, and buy somewhere in Melbourne, and wondered what I need to consider eg; getting the money into Oz (expenses, tax etc), getting a mortgage here, and also somebody told me I might have to pay capital gains tax because I haven't been living in it? Can anyone shed any light on these things?
You can also get the solicitor to transfer the balance of funds to an Australian account, or to a UK account of yours leaving you with various transfer to OZ options.
After 2 years here, and wioth funds for a deposit, getting a mortgage should be no trouble, assuming you are working
Have you asked any banks or mortgage brokers yet ?I assume you haven't owned a property in Australia, whilst renting your UK one out ? That helps in deciding if any CGT is payable.
But the maximum CG tax would be based on the increase in value (in A$) from the date you became Australian resident. eg: £100k in Dec 2002 was worth about $280,000, but is now only about $250,000, so even if a profit has been made, it will be reduced by the drop in the FX rate, together with various other expenses you will be able to claim to reduce the profit.
Jan 15th 2005, 6:46 am
#3
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Re: Living in Oz, selling in UK
Also read this ATO Page
http://www.ato.gov.au/individuals/co...p=001&st=&cy=1
part of which says:
http://www.ato.gov.au/individuals/co...p=001&st=&cy=1
part of which says:
Main residence and temporary absence
If you leave your main residence temporarily, you may want that residence to be regarded, for capital gains tax purposes, as your main residence while you are away. This may be the case, for example, if you move because of a temporary job transfer, to study overseas or to take an extended overseas holiday.
Under the capital gains tax rules, if you use your vacated home to produce income, you can choose to treat that home as your main residence for a period of up to six years. If you do not use the home to produce income, you can choose to treat it as your main residence for an unlimited period after you cease living in it.
If you choose to do this, under the capital gains tax rules you cannot nominate any other dwelling as your main residence during your period of absence, even if you actually lived in that other dwelling.
You must make the choice by the day you lodge your tax return for the income year in which a CGT event occurs for the disposal of the main residence. The way you prepare your tax return is sufficient evidence of your choice.
If you leave your main residence temporarily, you may want that residence to be regarded, for capital gains tax purposes, as your main residence while you are away. This may be the case, for example, if you move because of a temporary job transfer, to study overseas or to take an extended overseas holiday.
Under the capital gains tax rules, if you use your vacated home to produce income, you can choose to treat that home as your main residence for a period of up to six years. If you do not use the home to produce income, you can choose to treat it as your main residence for an unlimited period after you cease living in it.
If you choose to do this, under the capital gains tax rules you cannot nominate any other dwelling as your main residence during your period of absence, even if you actually lived in that other dwelling.
You must make the choice by the day you lodge your tax return for the income year in which a CGT event occurs for the disposal of the main residence. The way you prepare your tax return is sufficient evidence of your choice.
Main residence
Generally, you can ignore a capital gain or capital loss from a CGT event that happens to your ownership interest in a dwelling that is your main residence (also referred to as ‘your home’).
Generally, you can ignore a capital gain or capital loss from a CGT event that happens to your ownership interest in a dwelling that is your main residence (also referred to as ‘your home’).
Jan 16th 2005, 9:48 am
#4
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Location: Brisbane
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Re: Living in Oz, selling in UK
The important thing here is
"Have you ever lived in the flat in the UK"
If the ans is YES and you are renting in Oz still you can claim your UK flat as your principle place of residence (PPOR)(even though it's rented now) and you can sell it free of any CGT in Oz. You can do this for up to 6 years so long as you don't BUY in Oz. As you can only have ONE PPOR. You could even buy in Oz but still claim your UK flat as your PPOR but then you would be liable for Oz CGT on your Oz residence.
If the ans is NO your stuffed (or you could lie but I don't recommend that) and you will be liable for Oz CGT for the increase in value of the house in Oz dollars since you arrived in Oz.
Cannot help about your UK tax liability although as you are no longer tax resident in UK you would not be liable for any CGT on the sale is my understanding of the rules.
"Have you ever lived in the flat in the UK"
If the ans is YES and you are renting in Oz still you can claim your UK flat as your principle place of residence (PPOR)(even though it's rented now) and you can sell it free of any CGT in Oz. You can do this for up to 6 years so long as you don't BUY in Oz. As you can only have ONE PPOR. You could even buy in Oz but still claim your UK flat as your PPOR but then you would be liable for Oz CGT on your Oz residence.
If the ans is NO your stuffed (or you could lie but I don't recommend that) and you will be liable for Oz CGT for the increase in value of the house in Oz dollars since you arrived in Oz.
Cannot help about your UK tax liability although as you are no longer tax resident in UK you would not be liable for any CGT on the sale is my understanding of the rules.
Jan 16th 2005, 4:50 pm
#5
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Joined: Apr 2004
Posts: 34,649
Re: Living in Oz, selling in UK
Originally Posted by ABCDiamond
Firstly, a good solicitor in the UK with Power of Attorney, will enable you to sell the UK property without needing to return to the UK.
Jeremy
Jan 17th 2005, 5:07 am
#6
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Joined: Jan 2005
Location: Melbourne
Posts: 7
Re: Living in Oz, selling in UK
Originally Posted by Kiwipaul
The important thing here is
"Have you ever lived in the flat in the UK"
If the ans is YES and you are renting in Oz still you can claim your UK flat as your principle place of residence (PPOR)(even though it's rented now) and you can sell it free of any CGT in Oz. You can do this for up to 6 years so long as you don't BUY in Oz. As you can only have ONE PPOR. You could even buy in Oz but still claim your UK flat as your PPOR but then you would be liable for Oz CGT on your Oz residence.
If the ans is NO your stuffed (or you could lie but I don't recommend that) and you will be liable for Oz CGT for the increase in value of the house in Oz dollars since you arrived in Oz.
Cannot help about your UK tax liability although as you are no longer tax resident in UK you would not be liable for any CGT on the sale is my understanding of the rules.
"Have you ever lived in the flat in the UK"
If the ans is YES and you are renting in Oz still you can claim your UK flat as your principle place of residence (PPOR)(even though it's rented now) and you can sell it free of any CGT in Oz. You can do this for up to 6 years so long as you don't BUY in Oz. As you can only have ONE PPOR. You could even buy in Oz but still claim your UK flat as your PPOR but then you would be liable for Oz CGT on your Oz residence.
If the ans is NO your stuffed (or you could lie but I don't recommend that) and you will be liable for Oz CGT for the increase in value of the house in Oz dollars since you arrived in Oz.
Cannot help about your UK tax liability although as you are no longer tax resident in UK you would not be liable for any CGT on the sale is my understanding of the rules.
Mar 2nd 2005, 12:27 am
#7
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Location: Offices in Melbourne, Brisbane, Perth, Geelong (Australia), and Southampton (UK)
Posts: 6,459
Re: Living in Oz, selling in UK
One other point to watch - and that's the UK CGT position if you return to the UK within the next few years, as there is an anti avoidance provision that can apply and that taxes capital gains arising when you weren't resident in the UK upon your return ...
This said, there is a valuable letting exemption in the UK that can absorb a signficant amount of a capital gain where the property in question has been occupied as your main residence.
Best regards.
This said, there is a valuable letting exemption in the UK that can absorb a signficant amount of a capital gain where the property in question has been occupied as your main residence.
Best regards.
