Turkeytek

Hi guys - would appreciate any assistance in making my way through the tax red tape that is Australia.

I'm about to sell my house in the UK which I co-own with my sister. I've lived in Australia for 12 years now and have citizenship, therefore full resident status for tax purposes.

The easy bit is finding a transfer site/bank who can bring it over but the question I would like answering is, do I have to pay tax here in Australia?

Surely it's separate from my income tax and it's my only property ( I rent here but wish to buy ).

Hope someone can help and explain it to a non accountant/financial adviser like myself.

Kiwipaul

I would assume that you rented the property during your time in Oz and so you are liable for CGT on the increase in value of the property.
HOWEVER as you have rented in Oz you can claim the UK property as your Primary Place Of Residence for the first 6 years.
So you need to value the property in 2012 in Oz$ and then the value of the property in Oz$ when you sold it. 50% of this gain is tax free but the other 50% you add to your income for the year and you will be taxed accordingly.

spuddyo

If you have not been getting rent for the house and its not been a source of income, you pay no tax. You haven't received a penny have you !

Turkeytek

Thanks for the insight. Given I co-own the house with my sister and it's all in her name (i was just a silent investor) do I halve the increase in value from 2012 to 2018?

Say for example it increased in value by 100k, 50% is tax free which leaves 50k. Therefore do I just add half of that to my income for the year (i.e. 25k)?

Cheers

Turkeytek

To be honest I haven't received a lot, my sister has been living in it and starting her own business which isn't making much money. So apart from the occasional airbnb income it hasn't earned me much. Which is why I'm keen to sell it and bring the money over to Melbourne.

rammygirl

Turkeytek

Thank you for the advice. We had no formal agreement, which might seem reckless but she really is quite trustworthy!

Alan Collett

Did you lend your sister money, or are you a part owner of the property on the title documents - or both?

If you have an ownership interest you will need to prepare and lodge a Non Resident CGT return with HMRC, even if there is no CGT to pay.

Best regards.

Turkeytek

Thanks for your post Alan.

I lent her the half the money to purchase the property (plus she took out a mortgage for the shortfall) but my name was never on the title documents.

Alan Collett

Noted - thanks.

Best regards.

Kiwipaul

[QUOTE
Say for example it increased in value by 100k, 50% is tax free which leaves 50k. Therefore do I just add half of that to my income for the year (i.e. 25k)?
Cheers[/QUOTE]

That would be the situation if it was a normal rental situation but I'm not qualified to ans your more involved situation. Get professional advise.

Scotty1

If your name was not on the deeds and you simply lent your sister money to buy it that she is now repaying, then you did not own the property. She may have given you some money during her ownership for whatever reason, but if you were not on the deeds, its sale has nothing to do with you and does not trigger any CGT.
Whether an informal domestic loan arrangement with your sister that she is now repaying could possibly trigger some other tax liability I'm not sure, but given you are dealing with two tax rules, you may want to run it by someone like Alan to double check.