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Tax return & CGT in Oz

Tax return & CGT in Oz

Old Sep 9th 2014, 2:55 am
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Default Tax return & CGT in Oz

Hi all, I'm hoping someone can help me with this.
1) I recently sold a property in the UK that had been used for rental for a number of years, it was sold on April 12th 2014. That makes it sold in the 2014-2015 UK tax year, but in 2013-2014 Aus tax year. If there's CGT to pay which year do the ATO need to see the CGT declared? ie for the UK I don't need to do the sums until after April 2015, but do I need to bring that forward to declare in Aus?
2) Does the CGT computation get done in the UK by a UK accountant according to UK tax rules and the CGT amount declared on my tax return in Aus, or do I give the computations to my Aus accountant to work it out?

We are Aus residents.
Hope that all makes sense. thanks :-)
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Old Sep 9th 2014, 9:22 pm
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Default Re: Tax return & CGT in Oz

If you are not UK resident, then you don't pay UK CGT on UK property sales, unless/until you return to the UK having been absent for fewer than 5 tax years. This is almost certainly changing from next tax year though. However, if you did, it would probably be in 2013/14 not 2014/15 as it is the date of exchange of contracts that is relevant, which I would guess was at least at week before completion.

The date of sale falls in the Australian 2013/14 year so you need to give your Australian accountants details with the rest of the information for that year and will pay tax in Australia without any UK tax credit, based on the difference between the A$ value of the property when you became resident and the A$ equivalent of the sale proceeds net of expenses.
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Old Sep 11th 2014, 7:18 pm
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Default Re: Tax return & CGT in Oz

Originally Posted by louie View Post
If you are not UK resident, then you don't pay UK CGT on UK property sales, unless/until you return to the UK having been absent for fewer than 5 tax years. This is almost certainly changing from next tax year though. However, if you did, it would probably be in 2013/14 not 2014/15 as it is the date of exchange of contracts that is relevant, which I would guess was at least at week before completion.

The date of sale falls in the Australian 2013/14 year so you need to give your Australian accountants details with the rest of the information for that year and will pay tax in Australia without any UK tax credit, based on the difference between the A$ value of the property when you became resident and the A$ equivalent of the sale proceeds net of expenses.
Doesn't that only apply if it is an investment property?
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Old Sep 11th 2014, 10:48 pm
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Default Re: Tax return & CGT in Oz

Originally Posted by paulry View Post
Doesn't that only apply if it is an investment property?
I should have expanded that to say to also give the accountants details of all your properties and when you lived in them. I'm not really up on Australian principal residence rules, but as it is now a rental property, there may be some tax to pay. Thanks for pointing that out, Paulry.
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Old Sep 11th 2014, 11:33 pm
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Default Re: Tax return & CGT in Oz

Originally Posted by louie View Post
I should have expanded that to say to also give the accountants details of all your properties and when you lived in them. I'm not really up on Australian principal residence rules, but as it is now a rental property, there may be some tax to pay. Thanks for pointing that out, Paulry.
You're welcome, and thanks to you and the OP for raising this discussion. Do you know for migrants what the Aus residence period needs to elapse before the UK former-residence-turned-rental-property ceases to be regarded as a principal residence?
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Old Sep 12th 2014, 12:05 am
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Default Re: Tax return & CGT in Oz

Originally Posted by paulry View Post
You're welcome, and thanks to you and the OP for raising this discussion. Do you know for migrants what the Aus residence period needs to elapse before the UK former-residence-turned-rental-property ceases to be regarded as a principal residence?
Providing that you have actually lived in the property you can claim it as your PPOR for 6 years after you move out, but you cannot claim any other property as your PPOR during this time. So it depends on whether you bought when you arrived in Oz or did you rent until this UK property was sold.

Not absolutely sure if the 6 years applies to, from when you moved out or when you arrived in Oz so I played it safe assuming it's from when you moved out.
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Old Sep 12th 2014, 5:04 am
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Default Re: Tax return & CGT in Oz

Originally Posted by Kiwipaul View Post
Providing that you have actually lived in the property you can claim it as your PPOR for 6 years after you move out, but you cannot claim any other property as your PPOR during this time. So it depends on whether you bought when you arrived in Oz or did you rent until this UK property was sold.

Not absolutely sure if the 6 years applies to, from when you moved out or when you arrived in Oz so I played it safe assuming it's from when you moved out.
Thanks Paul.
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Old Sep 12th 2014, 1:14 pm
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Default Re: Tax return & CGT in Oz

Thanks Paulry and Louie for all the info...let me put some dates on the property usage and residency stuff to see whether that changes things.

Husband bought the flat (the one in question above) in Jul 1999 and used as PPR.
We bought a house together in the UK August 2001 which then became his PPR, joint with me.
He kept the flat for visiting his children (from his first marriage) at the weekends, so in effect it was a second home.
Started renting flat out in March 2008 (ie became investment property)
We moved to Aus in Dec 2009, but only as temporary residents (but I guess tax resident from that date...)?
Transferred the flat into joint names with me April 2012 to minimise CGT (but it's never been my PPR).
Had temporary residency in Aus from Dec 2009 to Jul 2013 (lovely little CGT exempt holiday there in which we sold as many properties as we could...)
Got residency in Aus July 2013 - no plans to go back (I mean why would we???)
Exchanged contracts on the flat on 1 Apr 2014, completed on 15 Apr 2014.

So - points that this raises - I assume the flat was regarded as PPR from Jul 2009 to Aug 2001 - I guess the 6 year rule then transfers onto the house that we bought together and has no relevance to the flat?
Then Louie refers to the AUS$ value of the property when we became resident versus when we sold the flat. As we were temporary residents from Dec 2009 until Jul 2013 is it the date from when we arrived and became tax resident (2009) or the date we danced around with our grubby little fingers on the official document and got hopelessly drunk (2013)?
Is there anything else I'm missing?
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Old Sep 13th 2014, 8:04 am
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Default Re: Tax return & CGT in Oz

Whoa this is way beyond my knowledge you need a professional tax expert on both UK and Oz tax law and one that is recommend by a number of posters is Alan Collett of

Go Matilda - Your Gateway to Australia - Visa, Tax and Financial Planning for Australia

One thing that strikes me is if you transferred the flat into joint names and you were Tax resident in Oz at the time you could be up for CGT at this point but I'm no expert.
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