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Hi I'm British and currently living in the UK with my Australian girlfriend. We may look to move out to Australia at the end of 2019, depending on a few things. To make the decision easier I would appreciate any help to the following questions. 1) As I understand it the exchange rate on the date at which you become a resident for Australian tax purposes, will be used as a base for working out overseas capital gains in the future. If I move to Australia on a tourist visa and then apply for a de facto 820 visa in Australia, is the date i become resident for tax purposes the date I arrived in the country, the date I lodged my application for the de facto visa, or a later date when I have got my TFN and can officially work? 2) I have some money outside of investments and not gaining any interest in the UK - in various sports betting accounts and a sports betting syndicate specifically and I may choose to keep that money to bet with in the UK. If I did so and then transferred money across 2 years later for example at 1.9 dollars to the pound instead of 1.7 dollars to the pound, would i have to pay a capital gain on the increase in AUD worth, even though the funds are not actually invested in anything, so nothing is being sold and there isn't an actual real capital gain on the money? 3) Do you have to declare every single pound of investments and funds you have overseas when you become an Australian resident for tax purposes, or is this not the case? 4) Furthermore sports gambling is at the moment tax free in the UK and Aus. If I happen to make money after my date of Australian residence for tax purposes and then transferred across in a few years time at 1 pound to 2 dollars for example. Would I still be liable for a capital gain based on the initial 1.7 dollars to the pound rating, when I arrived, even though I made the money well after I became an Australian tax resident? Instead if i had lost for example £50k in sports gambling in the 2 years after I left in the UK, but the exchange rate had gone up to 2 dollars and I decide to send money over, would I still have to pay capital gains on the increase in AUD, despite me actually having lost money in the UK. 5) I also own a small flat in the UK, which we have lived in for the last year. If we were to move to Australia, and become a resident for tax purposes, but only rent in Australia, would I have to pay capital gains on my house in the UK (at 28%) if I was to sell it 3 years later, or would it still be classified as my home and therefore immune from capital gains tax, as I didn't yet own one in Australia? Obviously I may win or lose sports gambling going forward and i understand losses can't be used as a capital loss for tax purposes. I know this a niche area, but any help or advice to let me understand the situation better, is much appreciated. Thanks Mack
Alan Collett posted a topic in Money & FinanceLast week the UK Government released a summary of responses to the consultative exercise, and confirmed that the change is scheduled to come into effect from the start of the 2015/16 UK tax year – ie on the 6th of April, 2015. The summary confirms that: “The government believes that extending capital gains (CGT) tax to non-residents disposing of UK residential property is an important change that will improve the integrity of the tax system. This change will remove the current differences in treatment of UK and non-UK residents disposing of residential property, and will bring the UK into line with many other countries that charge CGT on the basis of the location of the property.” Draft legislation will be included in Finance Bill 2015 and is due to be published next week, on the 10th of December. The response document advises that it will still be possible to elect which property is the taxpayer’s Principle Private Residence (the PPR) for a particular year provided the taxpayer is either tax resident in the same country as the property, or is resident in the property for at least 90 midnights in that year. This rule will apply to non residents for their UK property, and to UK residents for a non UK property. Only gains arising after 5th of April 2015 will be liable for the new charge. The capital gain will be calculated by default using a rebased cost as at 05/04/2015, with an option to calculate the gain based on the original cost on a time apportionment basis. The change will only apply to residential property. The vendor of the property will have to notify HMRC of the sale within 30 days, and if the vendor is already within the UK tax system the tax will be collected via Self Assessment. A new system will be devised for non residents not already within the UK tax system, but they will need to make a tax payment along with the notification. The rate of tax for non resident individuals will be the same as the CGT rates for UK individuals, which are currently 18% or 28% depending on the taxpayer’s total UK income and chargeable gains for the tax year. Non resident individuals (ie most of those living in Australia) will have access to the annual exempt amount of taxable gains, in line with UK residents. Further details are awaited in the Finance Bill, but we are recommending that those with UK property plan on the basis that a future disposal of a UK property after the end of the current tax year when non-UK resident will be subject to UK CGT, computed with reference to the value of the property on the 5th of April, 2015. To the extent that the disposal is subject to capital gains tax in Australia we anticipate the CGT paid in the UK will be creditable against the CGT liability in Australia. Best regards.
Onmywayhome posted a topic in Money & FinanceHi All I'm moving to Australia soon and renting out my flat here. As I understand it, there will be no UK CGT payable if I sell it within 3 years. But I'm wondering, since I'll be an Australian resident at that point, will I have to pay Australian CGT on it? Any advice would be much appreciated!
Just arrived. We probably won't sell ur UK house for a few years. Capital gains on your primary residence in UK is easy to avoid (even if you let), but the Australian Tax man probably sees our capital gains in UK as fair game (fair enough really). As we bought in 1990 the paper capital gains are huge (but everything else has gone up just as much, including here in Oz), and it would a disaster to have to pay a large slice of it in tax. Any idea about the rules of the Aussie tax on capital gains on a residence abroad? Any idea how they are applied - can we still nominate our UK house as our primary residence and if so for how long? When I know the basics I will probably pay for tax advice (very cheap at the price, potentially) but I find that it is useful to get your head around a problem before the experts bamboozle you with detail and try to sell you a complicated scheme to solve a problem that you could do for free yourself. Cheers, and thanks, radbt