Selling house in UK after 6 years in Oz
 

Hi, we currently have a house rented out in the UK and have been living in Australia for 6 years, waiting and waiting for the house prices to go up and exchange rate to improve. We have now got to the point that we just want to sell up and buy over here as nothing seems to be changing.

Can anyone tell me would we be liable to pay any tax etc on any equity we bring over because we have left it so long from moving over to selling. And also if we were to buy a piece of land before actually selling the UK property, would this cause complications once the property was sold. Is it best to wait until we have the equity in our hands before putting a deposit on any land.

Thanks in advance.

Re: Selling house in UK after 6 years in Oz
 

I think that you may be liable for Capital Gains in the UK as it hasn't been your main home for so long. Have you been filing tax returns for the last 6 years?

Re: Selling house in UK after 6 years in Oz
 

Yes we have been filling in the relevant tax forms, and we have never bought here so technically it is still our main home from our point of view.:)

Re: Selling house in UK after 6 years in Oz
 

I'm not an accountant or a tax specialist, but I thought that if you were renting out a house that used to be your main home, then you were allowed 3 years or something to sell without incurring CGT. Hopefully someone else will know. My only experience was selling a house I rented out when I moved within the UK and can't remember the exact info - just that I had to complete a CGT form but I rented for just over 6 years.

Re: Selling house in UK after 6 years in Oz
 

Get professional advice on this one. You will be liable to Australia tax but the period where capital gains tax covers is confusing. UK allows you a few years after living in it. If CTG applies then it may be your house hasn't gained much in value. You'll need a professional evaluation of value on moving to Oz and value now. Please keep me posted as I'm in a similar situation - although 95% sure I want to return to UK!

Re: Selling house in UK after 6 years in Oz
 

It's 6 years if you turn your PPOR into an IP, which seems to have been the case here. That's the case with Australian property anyway, I assume it is the same for overseas property.

BB

Re: Selling house in UK after 6 years in Oz
 

If they only own one property, which seems to be the case here, then it certainly is their main property. It has to be because there is no other. So no CGT implications. I wouldn't buy before you sell though.

Re: Selling house in UK after 6 years in Oz
 

I remember something about 6 years being a marker about selling the UK property. I do know that if you buy anything in Oz before selling the UK property then you will be liable for CGT, so if you intend selling it soon don't buy anything here!

Re: Selling house in UK after 6 years in Oz
 

Found this on claiming Private Residence Relief when you sell your house - http://www.hmrc.gov.uk/cgt/property/sell-own-home.htm which seems pretty easy to follow (I think this was what I used when I completed the form when I sold my house)

Re: Selling house in UK after 6 years in Oz
 

Actually there is no question of there being an UK CGT, it does not apply to non-residents (after 5 years of non residency). It is Australian CGT that is the question, but I don't think there is any.

Re: Selling house in UK after 6 years in Oz
 

Oh - okay. I assumed that because there was a UK income, they would be liable for UK CGT as well. Thanks BS :)

Re: Selling house in UK after 6 years in Oz
 

Thank you for your advice everyone. I will have a look at the info given. Unfortunately the houses were at their peak when we left the uk so the value now is a lot less than then and the rent we receive only covers the outgoings, so would hate to have to pay CG,s tax on something we have lost money on.

Re: Selling house in UK after 6 years in Oz
 

CG usually only applies when a gain is made, not a loss....

BB

Re: Selling house in UK after 6 years in Oz
 

Well then this is all a moot conversation anyway. :D

Re: Selling house in UK after 6 years in Oz
 

You won't be liable for CGT in Oz as you can rent your PPOR out for 6 years before it becomes an issue.
Remember the CGT if you were liable would be based on the value of the property when you arrived in Oz (worked out using the exchange rate on the date you arrived) in Oz$ and the difference in value of the property when you sold it in Oz$ on the date you sold it.
If this proves to be a loss you can keep the loss for use against any capital gain you make in the future.

Re: Selling house in UK after 6 years in Oz
 

I spoke to a UK accountant about this back in 2006 and he told me if you sell your Uk house from Australia ie your living in Australia then you won't pay any tax even if were liable for it as Uk resident.

Re: Selling house in UK after 6 years in Oz
 

Yes, I think we are clear on that (although it is only true after being a non UK resident for five years), it is Australian CGT that is an issue. Well actually no there isn't an issue at all as there is no profit. :D

Re: Selling house in UK after 6 years in Oz
 

Does this apply to stocks and share you hold in UK companies via a broker in the UK as well. Only intrested in the UK tax angle as I know the Oz rules.
Left UK in 92 and been carefull since to only sell shares to keep my CG below the UK allowance and so not done a UK tax return since I left.

Re: Selling house in UK after 6 years in Oz
 

Yes. You have no liability to UK capital gains tax if you are non-resident, unless you resume UK residence within five tax years of leaving, in which case gains in the interval may then become taxable.

Re: Selling house in UK after 6 years in Oz
 

Just out of interest what would happen if you were a non resident when you sold the house but then returned to the Uk? Would you be liable for anything upon your return?

Re: Selling house in UK after 6 years in Oz
 

Did you read my post above yours?

More info here.

Re: Selling house in UK after 6 years in Oz
 

Well we still have equity in the house, just that it is less than what it would have been when we left the UK in 2008. Therefore we have lost some of the profit but not all.

Re: Selling house in UK after 6 years in Oz
 

Gozzey - these are the relevant figures you need to calculate whether or not you have made a gain for this purpose. How much equity you have/had in the property is not relevant.

I don't know about the PPOR exemption in Australia. Kiwipaul - is it right that you can carry forward a capital loss even if any gain would have been exempt (which is how I am interpreting what you say above, but maybe I am reading it wrong)?

Re: Selling house in UK after 6 years in Oz
 

Equity and profit are two very different things.

Re: Selling house in UK after 6 years in Oz
 

You simply don't claim your UK house your PPOR you claim it is an investment property and that way you can carry forward the loss. The individual has the choice of how he declares his investments, and in this case they are not taking advantage of the PPOR rights.