Question for OZ tax experts
May 7th 2007, 12:28 pm
#1
BE Enthusiast
Thread Starter
Joined: Jun 2005
Posts: 389
Question for OZ tax experts
We've been in OZ for about 2 months now and still have a small 2nd property in the UK which we have been trying to sell unsuccessfully, the reason for selling was that I was told that I could take the monies for that paying minimal UK cap gains due to owning it for so long and transfer to Oz withing 6 months of being here and not incur any further cap gains from Oz.
my Estate agents are pushing me to Auction the property as its fell through on survey 2 times now. Auctioning would solve my problem of getting the money within 6 months but would mean ''losing'' about 10-15k from the sale price.
My question is that if I did keep hold of it and rented it out, would I be liable for UK cap gains when I eventually sold it or for OZ cap gains or both?
Is it a tiered rate in OZ like in UK (ie depreciating upon number of years owned)?
I know I'll incur income tax on the foriegn rents but the main problem for me is the cap gains, as I say the UK tax on that would be small but if suddenly I had to pay OZ cap gains at 40% or so then it would take many years before the property would gain enough value to make it worth it.
Hope that all makes sense
Thanks for any answers
my Estate agents are pushing me to Auction the property as its fell through on survey 2 times now. Auctioning would solve my problem of getting the money within 6 months but would mean ''losing'' about 10-15k from the sale price.
My question is that if I did keep hold of it and rented it out, would I be liable for UK cap gains when I eventually sold it or for OZ cap gains or both?
Is it a tiered rate in OZ like in UK (ie depreciating upon number of years owned)?
I know I'll incur income tax on the foriegn rents but the main problem for me is the cap gains, as I say the UK tax on that would be small but if suddenly I had to pay OZ cap gains at 40% or so then it would take many years before the property would gain enough value to make it worth it.
Hope that all makes sense
Thanks for any answers
May 7th 2007, 1:37 pm
#2
BE Enthusiast
Joined: Jan 2006
Posts: 413
Re: Question for OZ tax experts
We've been in OZ for about 2 months now and still have a small 2nd property in the UK which we have been trying to sell unsuccessfully, the reason for selling was that I was told that I could take the monies for that paying minimal UK cap gains due to owning it for so long and transfer to Oz withing 6 months of being here and not incur any further cap gains from Oz.
my Estate agents are pushing me to Auction the property as its fell through on survey 2 times now. Auctioning would solve my problem of getting the money within 6 months but would mean ''losing'' about 10-15k from the sale price.
My question is that if I did keep hold of it and rented it out, would I be liable for UK cap gains when I eventually sold it or for OZ cap gains or both?
Is it a tiered rate in OZ like in UK (ie depreciating upon number of years owned)?
I know I'll incur income tax on the foriegn rents but the main problem for me is the cap gains, as I say the UK tax on that would be small but if suddenly I had to pay OZ cap gains at 40% or so then it would take many years before the property would gain enough value to make it worth it.
Hope that all makes sense
Thanks for any answers
my Estate agents are pushing me to Auction the property as its fell through on survey 2 times now. Auctioning would solve my problem of getting the money within 6 months but would mean ''losing'' about 10-15k from the sale price.
My question is that if I did keep hold of it and rented it out, would I be liable for UK cap gains when I eventually sold it or for OZ cap gains or both?
Is it a tiered rate in OZ like in UK (ie depreciating upon number of years owned)?
I know I'll incur income tax on the foriegn rents but the main problem for me is the cap gains, as I say the UK tax on that would be small but if suddenly I had to pay OZ cap gains at 40% or so then it would take many years before the property would gain enough value to make it worth it.
Hope that all makes sense
Thanks for any answers
CGT in OZ is not 40% or so.Should you be liable to pay it then half the gain is taxable at your marginal rate,after 12 months of ownership.I E if the gain is $100,000 then $50,000 is added to your income for that year and taxed accordingly,plus medicare.If you on the 30% bracket then think of it as the whole gain being taxed at 15% (excluding medicare levy).
You can get booklets from ATO explaining CGT,give them a ring and ask them,they are very friendly and helpful.They will tell you where you will be liable for CGT.
May 7th 2007, 2:17 pm
#3
BE Enthusiast
Thread Starter
Joined: Jun 2005
Posts: 389
Re: Question for OZ tax experts
There is no taper on CGT in OZ.
CGT in OZ is not 40% or so.Should you be liable to pay it then half the gain is taxable at your marginal rate,after 12 months of ownership.I E if the gain is $100,000 then $50,000 is added to your income for that year and taxed accordingly,plus medicare.If you on the 30% bracket then think of it as the whole gain being taxed at 15% (excluding medicare levy).
You can get booklets from ATO explaining CGT,give them a ring and ask them,they are very friendly and helpful.They will tell you where you will be liable for CGT.
CGT in OZ is not 40% or so.Should you be liable to pay it then half the gain is taxable at your marginal rate,after 12 months of ownership.I E if the gain is $100,000 then $50,000 is added to your income for that year and taxed accordingly,plus medicare.If you on the 30% bracket then think of it as the whole gain being taxed at 15% (excluding medicare levy).
You can get booklets from ATO explaining CGT,give them a ring and ask them,they are very friendly and helpful.They will tell you where you will be liable for CGT.
