Originally Posted by ozhappy981

There are a number of different possible scenarios in the above statement:

1. Sell the UK house and move to Oz with the cash: No UK tax implications as it's your main residence. No Oz tax implications either. You just move the cash to Oz (they are your savings), put it into an Oz bank acoount. And then you pay Oz tax on any interest you get in that bank account.

2. Leave an empty house in the UK, waiting to sell. Move to Oz and live in rented accommodation: As far as tax is concerned, it's exactly the same as above.

3. Rent out the UK house. Move to Oz and live in rented accommodation there: Before you leave the UK, you need to fill out some forms so that your UK rental agent pays you the rent gross, i.e. without deducting any tax. In Oz, you declare the UK rental income and all the deductions (e.g. cost of agent, repairs, mortgage interest) on your tax return.- When you come to sell the house, there is no UK or Oz capital gains tax to pay because the house is still classed as your main residencee (even though you are living in Oz in rented accommodation). You then move the cash from the house sale to Oz (no tax to pay) - and then pay tax on any interest the money earns.

4. If you do everything as in 3. above, but buy a house in Oz (instead of renting there), things get a bot more complicated for capital gains tax. If that's what you have in mind, let me know and I'll explain.

5. Another possible scenario is that you sell the UK house but leave the money in a UK bank account because the exchange rate is bad and you hope it will improve. But it could be years before it improves. In the meantime, the interest the money can earn would be much higher in Oz because we have higher interest rates here compared to the UK.- Anyway, if you did this, you'd need to fill in form R85 so that your UK bank pays you the interest gross (i.e. without deducting tax). And you then declare the interest in your OZ tax return.

Hope the above has covered whatever scenario you had in mind.

Originally Posted by faye123

Hi everyone!
Just got our Australian visa through - so excited!!!
We have two kids of 4 yrs and 2 yrs taking the news really well. So difficult telling my family...real highs and real lows.. Just looking for any advice really...
1. we are thinking of selling - renting our house in the UK and need to understand the tax implications of moving to OZ with the exchange rate so bad?
2. Looking to move to Brisbane any suburbs good for us to rent? My husband will be commuting (hopefully) into Brisbane for work and looking for first schools for my children.
3. Finally for me - any mum in a similar positon who can offer any words of wisdom will be eternally grateful!!!
Thanks Faye

Originally Posted by Bermudashorts

Do you mean you will own a house in the UK and in Australia at the same time? That is the complication being alluded to.

Originally Posted by james1972

Thanks Bermudashorts.


In the light of the day though I hope I am right in saying that it wont matter in terms of CGT because the money is from the sale of our only property. Understand we would then have to pay tax on interest earned wherever the money is.

Originally Posted by Bermudashorts

Do you mean you will own a house in the UK and in Australia at the same time? That is the complication being alluded to.

Originally Posted by Harvester

That's the one I'm interested in, if anyone wants to cover that option for completeness?

I assume the Aus house becomes primary residence and your UK house an "overseas investment property" and subject to Aus capital gain when sold. Anyone like to clarify if that's correct, time frames etc? For simplicity assume permanent resident of Aus and UK house would be sold at some stage during continuous Aus residency.

Thanks

Originally Posted by Alfresco

Yes it will be deemed an investment property and will be taxed accordingly, unless you get a ruling from the ATO and bring the money over within say 12 months. They deem it to still be part of your move to OZ and you don't get taxed on any money you take to Oz when you migrate.

Originally Posted by Harvester

Thanks Worth getting a ruling then & weighing up if it's worth while selling up in the UK just before the 1 year mark then.

So for the scenario of selling after 12 months, don't suppose you happen to know what the basic rules are regarding capital gain tax in Aus?

Correct me if I'm wrong but I'm guessing, any gain will be taken from the difference between the UK valuation in dollars at the date it ceases to be your primary residence (or is it when you simply first left the UK?) to the UK sale price in dollars. Thereby, potentially paying a capital gain on both a recovery in the exchange rate and the house value?

I'm also guessing there may be some sort of reduced tax rate as the UK house was at one time the primary residence & not solely an investment?

Originally Posted by Alfresco

It will be liable for CGT at the point it becomes and 'investment property' i.e. you buy a house in Oz as it would still be you primary residence until then.

Have a read of the ATO website:

http://www.ato.gov.au/corporate/path...pc=001/001/038

Loads of useful info on there!

Originally Posted by danbradb1987

hi i have read your info on tax which is great! i am renting my house for £850, by agent is charging 10% plus vat to manage it which is ok, but he spoke to me today, and said that i will have to pay 20% tax on top of the manages fees and they will deduct it every month from my monies. That now leaves me with £500 a month to pay for a rental in perth.is that right, can they do that? i still have to pay morgage etc for hear, what do i need to do and what formes do i get from the tax office, could you advice,: will be going to perth in march. just another headach to deal with!

Originally Posted by james1972

We was thinking about Selling the house and buying quickly in Australia, so not option 4.

In the light of the day though I hope I am right in saying that it wont matter in terms of CGT because the money is from the sale of our only property. Understand we would then have to pay tax on interest earned wherever the money is.

Originally Posted by danbradb1987

hi i have read your info on tax which is great! i am renting my house for £850, by agent is charging 10% plus vat to manage it which is ok, but he spoke to me today, and said that i will have to pay 20% tax on top of the manages fees and they will deduct it every month from my monies. can they do that? will be going to perth in march.