Tax on house sale money
Jan 2nd 2004, 8:45 am
#1
Just Joined
Thread Starter
Joined: Sep 2003
Location: Norwich, uk
Posts: 5
Tax on house sale money
Has anyone been in the same situation as us.We are about to sell our house , but considering leaving the majority of the money in a high Interest account, until we have settled in Melbourne, or we decide it's not for us and come back, but how are we affected tax wise.I have little bits and pieces on this subject, but am not sure i understand it correctly.
For example if we left £80,000 in the Uk, for say 2 years, I believe we get taxed on the Interest that money would make only not the actual £80,000. Please correct me if I am wrong.
Also is there a ruling which gives you a 6 month window to bring this money in tax free. and does capital gains effect us.
Any help woud be apreciated.
For example if we left £80,000 in the Uk, for say 2 years, I believe we get taxed on the Interest that money would make only not the actual £80,000. Please correct me if I am wrong.
Also is there a ruling which gives you a 6 month window to bring this money in tax free. and does capital gains effect us.
Any help woud be apreciated.
Jan 2nd 2004, 9:00 am
#2
Forum Regular
Joined: Nov 2002
Location: Ashford, Kent
Posts: 191
You will be liable for tax on the interest only.
There is no capital gains tax to worry about on this, although the exchange rate fluctuations cause some tax issues. At the date of entry your 80K will have a certain dollar value. If the exchange rate goes up you will be liable for the tax on the difference in value. The opposite also holds true, but you can't claim it in the same tax year.
I think the 6 month rule just applies to pensions...
There is no capital gains tax to worry about on this, although the exchange rate fluctuations cause some tax issues. At the date of entry your 80K will have a certain dollar value. If the exchange rate goes up you will be liable for the tax on the difference in value. The opposite also holds true, but you can't claim it in the same tax year.
I think the 6 month rule just applies to pensions...
Jan 2nd 2004, 9:18 am
#3
Joined: Aug 2003
Posts: 11,149
Look for posts by Alan Collett. He is qualified in Aussie and UK tax law.
Jan 4th 2004, 3:25 pm
#4
Forum Regular
Joined: Dec 2003
Posts: 94
Re: Tax on house sale money
Originally posted by tom&Jo
Has anyone been in the same situation as us.We are about to sell our house , but considering leaving the majority of the money in a high Interest account, until we have settled in Melbourne, or we decide it's not for us and come back, but how are we affected tax wise.I have little bits and pieces on this subject, but am not sure i understand it correctly.
For example if we left £80,000 in the Uk, for say 2 years, I believe we get taxed on the Interest that money would make only not the actual £80,000. Please correct me if I am wrong.
Also is there a ruling which gives you a 6 month window to bring this money in tax free. and does capital gains effect us.
Any help woud be apreciated.
Has anyone been in the same situation as us.We are about to sell our house , but considering leaving the majority of the money in a high Interest account, until we have settled in Melbourne, or we decide it's not for us and come back, but how are we affected tax wise.I have little bits and pieces on this subject, but am not sure i understand it correctly.
For example if we left £80,000 in the Uk, for say 2 years, I believe we get taxed on the Interest that money would make only not the actual £80,000. Please correct me if I am wrong.
Also is there a ruling which gives you a 6 month window to bring this money in tax free. and does capital gains effect us.
Any help woud be apreciated.
Depends on ownership and usage of house, etc. etc.
Your cash is an asset and its subject to CGT in Australia on assessment of exchange rate fluctuation.
Forex - election out of the 12 month rule is an issue
This election allows taxpayers to opt out of the special operation of the 12 month rule on short term disposals or acquisitions of certain assets.
http://ato.gov.au/distributor.asp?do...tent/34737.htm
Published: 15 Oct 2003
Passed into legislation
Also watch Austrac - "Australian Transaction and Analysis Centre"
Develop a pre-departure strategy and don't guess it - the moment you enter Australia - you are lumbered with values that you can't deny. In other words you cannot say you had money in X when it was in Y. The six months is on pensions
Kind Regards
Geraint
