Money Transferrals - taxed after 6 months. is it true?
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Thanks everyone.
I'm still however a little confused
For example if I could've have exchanged £100,000 at rate 2.3% and now at 2.08%, the loss is approx £30,000!! My worry is that if I leave it longer Hifix state it could go down further. My account with them is already set up in the UK, just need to call them and then do a bacs transfer. I'm going over as a permanant resident, so tax at 48.5% seems a lot.
So can I really claim that loss or the difference in exchange rate back?? so am I better off financially waiting until a better exchange rate?
I'm still however a little confused
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So can I really claim that loss or the difference in exchange rate back?? so am I better off financially waiting until a better exchange rate?
This is why the age of the bank account comes into play. Any assets bought/owned before 20 Sep 86 are not subject to gains tax.
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- Using a currency broker, the funds go from your UK bank into their account first. Would ato still consider the transfer as arising from your UK account. Or, would you need to make a direct transfer from your UK bank to 'claim'
- The assets in the bank account have not been sat there since 1986, but transferred from a savings account just before transfer. Again do ato consider the account rather than the actual money.
edit: found the etax software
Is it possible to get hold of an electronic tax form (you mentioned some ato software - is it free). www.ato.gov.au/etax
Last edited by carlap; Jan 21st 2009 at 9:28 am. Reason: found etax software
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#18
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I am no expert but my understanding is that it is the account that matters...not how the funds got into it or where they came from.
I also have an account I opened in the 1970's.
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http://www.gomatilda.com/news/article.cfm?articleid=327
quote -
Compare this with the situation if Susan had decided to retain the £100,000 in a bank account which she had maintained for several years. In this scenario the gain arising would be outside the charge to income tax under the forex provisions as the account was opened before 1 July 2003.
However, it should be noted that this gain may be assessable under the capital gains tax provisions.
- unquote
So as I see it -
if making money on the exchange, transfer from an account opened before 20 Sep 86, no income tax or CGT to pay
If losing, use and account opened after 1 July 2003 pay CGT so you can offset the loss.
BUT - don't know what the forex provisions are, another convaluted trail I guess.
Also, from the etax ato software it seems first $10k of gain/loss is exempt anyway:
Capital gains tax (CGT) schedule 2008 will be prepared and lodged automatically by e-tax with your tax return if your total capital gains (including capital gains distributions from trusts) or capital losses exceed $10,000 for the 2007-08 income year
But please note - I am no expert, just trawling the forums and geting info from (potentially) other non-experts.
Last edited by carlap; Jan 21st 2009 at 10:28 am.
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I am not sure if you can clarify the following picky details as you seem very knowledgable.
- Using a currency broker, the funds go from your UK bank into their account first. Would ato still consider the transfer as arising from your UK account. Or, would you need to make a direct transfer from your UK bank to 'claim'
- The assets in the bank account have not been sat there since 1986, but transferred from a savings account just before transfer. Again do ato consider the account rather than the actual money.
edit: found the etax software
Is it possible to get hold of an electronic tax form (you mentioned some ato software - is it free). www.ato.gov.au/etax
- Using a currency broker, the funds go from your UK bank into their account first. Would ato still consider the transfer as arising from your UK account. Or, would you need to make a direct transfer from your UK bank to 'claim'
- The assets in the bank account have not been sat there since 1986, but transferred from a savings account just before transfer. Again do ato consider the account rather than the actual money.
edit: found the etax software
Is it possible to get hold of an electronic tax form (you mentioned some ato software - is it free). www.ato.gov.au/etax
Bizarrely it's the account that you transfer from that seems to matter rather than which account the money was in when you became tax resident.
Last edited by MartinLuther; Jan 21st 2009 at 10:37 am. Reason: clarity
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Aus does not have a CGT free allowance but it does have a 50% discount if you hold the asset for more than 12 months.
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The principle underlying this is that Aus treats your foreign money as an asset. So if you have £100k and you arrive to stay permanently (i.e. become tax resident) with an exchange rate is 2.08 your asset is worth $208k. If 3 months later you exchange at 2.20 then your asset is now worth $220k. Therefore from an ATO point of view your asset made a gain of $12k when you sold it.
This is why the age of the bank account comes into play. Any assets bought/owned before 20 Sep 86 are not subject to gains tax.
This is why the age of the bank account comes into play. Any assets bought/owned before 20 Sep 86 are not subject to gains tax.
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Thanks for your time
so if I made a loss at exchange after arrival I could claim it back? and if I make a profit eg $12k what rate is this taxed if I'm in full time employment ( UK earnings just under 30k GBP approx 64k AUD )? Trying to work out whether its better to leave money until exchange improves.
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Thanks Martin Luther for your advice, think I will sit on it for a while until rates get better. will just take 10k over instead.
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Just a thought. If you've got your money in an English account then your being taxed on the interest in England so why do you have to pay CGT when you bring it here. I thought the UK and Aus had an agreement where you couldn't get taxed twice?
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If you're living in Aus then the interest in the UK account is taxable but Aus but you get credit for any tax already paid to the UK.
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Does anyone know how this works if you are a resident for tax purposes (which I am on a student visa) but not a PR? Obviously until you know you can stay here for sure as a PR, you are not going to bring all your money over......
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I would also be interested in the answer to this question from Pumpkin Blossom, I will be moving on a 163 business visa which gives me temporary residency for up to 4 years until I can prove I've set up & run a business & applied for PR. I've got the same dilemma with bringing pensions over. Don't want to move all my funds until I know it's a sure thing.
Barclays have told me my earliest opened bank account was 1989.....damn. Any advice in clear English gratefully received. I always thought I was reasonably intelligent bod until I started reading some of the official financial notes on these matters, at the end of each article I just feel decidedly thick as I just don't get it.
Barclays have told me my earliest opened bank account was 1989.....damn. Any advice in clear English gratefully received. I always thought I was reasonably intelligent bod until I started reading some of the official financial notes on these matters, at the end of each article I just feel decidedly thick as I just don't get it.
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The ironic thing is that compared to the United Kingdom, which takes the opposite approach and generally exempts both foreign exchange gains (and losses), there is no additional revenue from Australia's current approach.
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Hi
Could I ask a question please. When I emigrate, hopefully in a couple of months, I will be entering Australia on a PMV. I do not intend to sell my property in the UK straight away because of the depressed market but also because my daughter will probably be taking up residence and continue to pay the mortgage and bills at cost.
I have no idea at the moment when I will sell the house, it could be a year, or two or more but wondered what the tax implications would be for not bringing the money over soon after I emigrate. Does it go against me because I won't be selling straight away?
I wouldn't be making any profit having my daughter live in the property, she will simply be covering costs.
Looking forward to receiving clarification. Many thanks
Could I ask a question please. When I emigrate, hopefully in a couple of months, I will be entering Australia on a PMV. I do not intend to sell my property in the UK straight away because of the depressed market but also because my daughter will probably be taking up residence and continue to pay the mortgage and bills at cost.
I have no idea at the moment when I will sell the house, it could be a year, or two or more but wondered what the tax implications would be for not bringing the money over soon after I emigrate. Does it go against me because I won't be selling straight away?
I wouldn't be making any profit having my daughter live in the property, she will simply be covering costs.
Looking forward to receiving clarification. Many thanks
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