Go Back  British Expats > Living & Moving Abroad > Australia
Reload this Page >

Rent, Buy or Cry ????

Rent, Buy or Cry ????

Old Oct 15th 2004, 9:21 pm
  #1  
Forum Regular
Thread Starter
 
kaydave's Avatar
 
Joined: Mar 2004
Location: Samsonvale, Brisbane, QLD
Posts: 49
kaydave is an unknown quantity at this point
Question Rent, Buy or Cry ????

Hi,
Can some one confirm in regard to the valuation for CGT of our commercial property in the Uk,when we leave the UK that is.
We had a guide price in writing from a well known commercial estate agents and chartered surveyors back in March 2004 and will be tax residents in Australia about Dec, that is if we get our tax file number then that is.

The Questions are:

1. will this Guide price be exceptable to the ATO or will they require a full Valuation survey which cost about £500.00 . It does look quite professional, 5 pages on letter headed paper in a folder etc which reads I would recommend that the property is placed on the market with a Guide price of £175,000 on the basis that we would expect to receive offers based upon this figure.

2.We will not be selling it for at least 2 years and will be remaining in OZ for hopefully our life time, so if I understand correctly there will be no CGT in UK only Tax on the profit from the date we get tax file number and if we sell it assuming the value has gone up in that time.

3.The reason for saying that we might not get a tax file number as soon as we get to oz, is that the house sale has fallen through and so we are going to move to OZ in Dec so the children can get settled in schools when they start the new term. The idea is that we rent a house for a while in the hope that the house might sell in that time.
Am I right in thinking that if we do not get a tax file number and live off our savings, and the house sells and hopfully the exchange rate goes up too, we would not be liable for tax on the profit part of the exchange rate.

4. Is there any way that linked to the above that I could start work, get a tax file number, therefore buy a small older house, which we have been told you can only do if you are a resident (new house if you are not) and then once the house in the Uk is sold sell the small house and move up, or would we be taxed to the hilt?


Sorry for so many questions, I hope some one can decipher what I am trying to ask and help us.

lots of replies please! any advice will be gratefully received


cheers David
kaydave is offline  
Old Oct 16th 2004, 2:14 am
  #2  
BE Forum Addict
 
Joined: Jan 2003
Location: Brisbane
Posts: 1,554
Kiwipaul is a splendid one to beholdKiwipaul is a splendid one to beholdKiwipaul is a splendid one to beholdKiwipaul is a splendid one to beholdKiwipaul is a splendid one to beholdKiwipaul is a splendid one to beholdKiwipaul is a splendid one to beholdKiwipaul is a splendid one to beholdKiwipaul is a splendid one to beholdKiwipaul is a splendid one to beholdKiwipaul is a splendid one to behold
Default Re: Rent, Buy or Cry ????

Originally Posted by kaydave
Hi,
Can some one confirm in regard to the valuation for CGT of our commercial property in the Uk,when we leave the UK that is.
We had a guide price in writing from a well known commercial estate agents and chartered surveyors back in March 2004 and will be tax residents in Australia about Dec, that is if we get our tax file number then that is.

The Questions are:

1. will this Guide price be exceptable to the ATO or will they require a full Valuation survey which cost about £500.00 . It does look quite professional, 5 pages on letter headed paper in a folder etc which reads I would recommend that the property is placed on the market with a Guide price of £175,000 on the basis that we would expect to receive offers based upon this figure.
When you sell your investment property in the UK the tax paid in Oz is self assessed and you don't have to produce any documentation, just declare what profit you made and is liable for tax. HOWEVER if they think you are lying they can audit you and then you would have to produce documentaion.
BUT a previous post asked how likely you were to be audited and nobody admited they had been. I haven't after 5 years here.
2.We will not be selling it for at least 2 years and will be remaining in OZ for hopefully our life time, so if I understand correctly there will be no CGT in UK only Tax on the profit from the date we get tax file number and if we sell it assuming the value has gone up in that time.
As I understand it it's from the time you become resident in Oz, nothing at all to do with when you get your TFN.
3.The reason for saying that we might not get a tax file number as soon as we get to oz, is that the house sale has fallen through and so we are going to move to OZ in Dec so the children can get settled in schools when they start the new term. The idea is that we rent a house for a while in the hope that the house might sell in that time.
Am I right in thinking that if we do not get a tax file number and live off our savings, and the house sells and hopfully the exchange rate goes up too, we would not be liable for tax on the profit part of the exchange rate.
If you don't have a TFN all Oz income will be taxed at 47% even bank interest. BUT you can still claim your UK property as your primary residence (I believe) if you just rent here initially and so free of Oz CGT. I baseing this on your ability to claim a property in Oz as your primary property (free of CGT) whilst working in a different part of Oz for up to 7 years. Don't see why it should be different if the property is abroard.
4. Is there any way that linked to the above that I could start work, get a tax file number, therefore buy a small older house, which we have been told you can only do if you are a resident (new house if you are not) and then once the house in the Uk is sold sell the small house and move up, or would we be taxed to the hilt?
Be warned buying and selling houses here is MORE expensive than in the UK but eaiser and rental property is widely available at very competative prices.

I'm no accountant or tax expert just a lot of experience.
Kiwipaul is offline  
Old Oct 16th 2004, 10:53 pm
  #3  
Forum Regular
Thread Starter
 
kaydave's Avatar
 
Joined: Mar 2004
Location: Samsonvale, Brisbane, QLD
Posts: 49
kaydave is an unknown quantity at this point
Default Re: Rent, Buy or Cry ????

Originally Posted by Kiwipaul
When you sell your investment property in the UK the tax paid in Oz is self assessed and you don't have to produce any documentation, just declare what profit you made and is liable for tax. HOWEVER if they think you are lying they can audit you and then you would have to produce documentaion.
BUT a previous post asked how likely you were to be audited and nobody admited they had been. I haven't after 5 years here.

As I understand it it's from the time you become resident in Oz, nothing at all to do with when you get your TFN.

If you don't have a TFN all Oz income will be taxed at 47% even bank interest. BUT you can still claim your UK property as your primary residence (I believe) if you just rent here initially and so free of Oz CGT. I baseing this on your ability to claim a property in Oz as your primary property (free of CGT) whilst working in a different part of Oz for up to 7 years. Don't see why it should be different if the property is abroard.

Be warned buying and selling houses here is MORE expensive than in the UK but eaiser and rental property is widely available at very competative prices.

I'm no accountant or tax expert just a lot of experience.


KiwiPaul,
Thank you for your reply it's much appreciated.
one more question you might be able to answer for us is:
At what point does someone become a resident in OZ?
Is it the date that you valdidate your Visa's?
We are thinking of going back to UK after validation, how would they know when you were going to stay for good, does it have some thing to do with the 5 years after validation?

Many thanks David and Kay
kaydave is offline  
Old Oct 17th 2004, 7:39 am
  #4  
BE Forum Addict
 
Joined: Jan 2003
Location: Brisbane
Posts: 1,554
Kiwipaul is a splendid one to beholdKiwipaul is a splendid one to beholdKiwipaul is a splendid one to beholdKiwipaul is a splendid one to beholdKiwipaul is a splendid one to beholdKiwipaul is a splendid one to beholdKiwipaul is a splendid one to beholdKiwipaul is a splendid one to beholdKiwipaul is a splendid one to beholdKiwipaul is a splendid one to beholdKiwipaul is a splendid one to behold
Default Re: Rent, Buy or Cry ????

Originally Posted by kaydave
KiwiPaul,
At what point does someone become a resident in OZ?
Is it the date that you valdidate your Visa's?

Many thanks David and Kay
I believe the ans is yes.
Kiwipaul is offline  
Old Oct 17th 2004, 8:09 am
  #5  
Don
Banned
 
Joined: Aug 2002
Posts: 7,613
Don is an unknown quantity at this point
Arrow Re: Rent, Buy or Cry ????

Originally Posted by Kiwipaul
I believe the ans is yes.
Don't think so. Someone popping over to Aus to validate the visa, scout around and return to the UK doesn't become an Aus resident. It's when you move over to live with the intention of staying or when you spend a certain number of days in Aus in the tax year, I'm pretty sure.
Don is offline  

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Contact Us Archive Advertising Cookie Policy Privacy Statement Terms of Service

Copyright © 2018 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.