TheCreature

Then this may be of interest.

http://www.telegraph.co.uk/expat/exp...oreigners.html

JAJ

The U.K. has up to now been an exception in exempting capital gains on locally situate property owned by non-residents.

Anyone subject to Australian capital gains tax (including citizens/PRs with tax residency) should normally be able to offset any U.K. tax against Australian tax - although it is possible that U.K. tax could exceed Australian.

An ongoing exposure to the U.K. tax system is part of the risk inherent in deciding to retain a property in the U.K.

paddyo

It does mention 'second homes'.....as we only own one home, in the UK but are selling after January to then buy our first home in Australia, it should not affect us...but still good to be aware!

Swerv-o

I wonder if we will see a flurry of ex-pat home sales before this legislation is enacted...


S

paddyo

nah.....they may be some stirring but I can't see a huge difference

JAJ

It might be worthwhile to compute what the hypothetical U.K. capital gains tax would be. A typical emigrant would likely be able to claim private residence relief for the time of residence + 3 years, and letting relief would cover much of the rest of the gain. Add in the capital gains exemption (which may still be available) and the personal allowance (which should be available, normally) and the actual U.K. tax payable may be minimal. Plus, whatever's left could then (normally) be credited against Australian tax.

louie

By second homes, they mean not your principal private residence. Presumably your UK (former) home is not one of your residences, so it could well apply to you. However, as JAJ says, there are likely to be a number of deductions from any gain so you'd need to do the sums to find out whether it is a problem for you. In any case, it's unlikely to be introduced until the next year starts on 6 April 2014. Although there have been mid-year changes in the past, it's very rare.

louie

You can't offset your (income tax) personal allowance against your capital gains.

Alfresco

That's why I have decided to not retain any property in the UK.

paddyo

Louie, it was our Principal Private Residence until we went PR but it is still our only owned home, we rented here as 457 Temp residents until we got PR last September and now will sell the UK house then use that to put as deposit here in Oz for our first permanent owned home. I think that for tax purposes we will be OK but I am taking nothing for granted.

Bermudashorts

It will be fine. Even if you are PR it is still your principal residence if you only own one house.

louie

Not if it is rented out, it isn't. And possibly not even if it is not depending on the nature of his tenancy/tenancies in Australia. As paddyo has been in Australia more than 3 years, it's entirely possible that there would be a liability in the UK should they change the rules. He'd have to do the sums.

The Cumbrian

Simple . Just dont tell them you are living abroad!

spouse of scouse

Not sure if that's a good idea. If the UK government is anything like Oz, the tax authorities will be linked with immigration - and every other damn govt. dept!

paddyo

Hi Louie.....for the period Apr 2008 - Sept 2012 the house in UK was our Principal Residence as we were on a 457 Temp Visa and we rented locally as such to provide necessary accommodation. As we are now PR we are going to change our Principle Residence to be our first home in Australia when we buy it. I did have a conversation with the ATO about 6 months ago to get the lye of the land and they assured me that selling your sole home for the purpose of buying another sole home would not incur any Capital Gains tax irregardless of the location.