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Found 22 results

  1. Wanderer Returns

    Taxed at both ends?

    Hi, I'm a British/Australian citizen and I returned to Australia in January after 5 years in the UK. My house sale in the UK is proceeding, but I'm now an Australian resident for tax purposes. The house is my only property and principle residence. I bought it for £240,000 in May 2018 and I'm now selling it for £258,000. Will I be liable for any kind of CGT or income tax in either the UK or Australia? Many thanks in advance.
  2. Hello, We are currently going through a 482 visa application and trying to decide what to do with our UK property, and would like some advice. For the last two years we have travelled abroad and rented our UK home, we were still deemed UK tax residents during that period as we weren’t settled in one country and were not working. Now we are looking at a move to Oz, and just thought we’d keep our house and continue renting it, however the more I’ve looked into I’ve realised there might be some pretty big financial pitfalls. We purchased the house (jointly owned by my husband and I) in Dec 2013 for £300k, lived in it until Oct 2017, during that time we did some extensive building work - we basically took the existing house back to brick work to start again and added an extension that doubled the size. The total cost of work was probably in the region of £150k, maybe as much as £200k. The house is probably worth £650k now. We didn’t keep all the receipts for the work we had done but I guess bank statements and credit cards could be used to get a more accurate record? Our house is currently rented out, the monthly rent is £2000. Our mortgage is around £1600 (variable) with roughly half (£800) being interest. So my questions: 1) If we continued to rent the house then the UK income I believe would come under the tax free threshold - is this correct? Would we still be entitled to the threshold as non resident? 2) if we rented the property would we have to pay tax on it in Aus? How is that calculated? 3) if we sold the property I understand we’d have to pay CGT. In terms of proving what we spent on improving the property what would we need to provide - would credit card statements be enough or would we need receipts and invoices for everything? 4) how much CGT would we pay if we sold now (using Dec 2019 for ease of calculations) versus if we sold in say two years time? My understanding is: Dec 2019 Owned property for 6yrs (72mths), lived in property for 47mths, Rented it for 25mths. Gain on property (worst case) £200,000 £200k/72mths = £2777/mth 47 + 18 = 65 x £2777 = £180,500 so CGT liability = £19,500, which would be inside our annual threshold. Alternatively if we kept the property and sold in two years time - Dec 2021: Owned property for 8yrs (96mths), lived in property for 47mths, Rented it for 49mths. Gain on property (I guess this would probably be a bit higher, circa 4% over two years based on current rises = value of £626k) £226,000 £226k/96mths = £2354/mth 47 + 9 = 56 x £2354 = £132k so CGT liability = £94k. £24k threshold, so we’d pay tax on £70, at either 18% or 28%. (£12,600 / £19,600) 5) if we sell the house how do we work out if we are basic rate or higher rate tax payers? Our “normal” jobs would both be higher rate - but do they only look at UK income (ie. income from renting our property) or is is based on what we’d be earning in Aus? thanks in advance for any help and advice you can give!
  3. Since the start of the 2015/16 tax year the UK has required capital gains tax to be considered when a non UK resident individual sells a residential property in the UK. Before the 6th of April, 2015 no capital gains tax was payable. Key points are: In calculating the charge to UK CGT the tax computation has reference to the property’s market value as at the 6th of April, 2015. However, taxpayers are given the option to time apportion the gain since the property was acquired – ie over the whole period of ownership (pre-6th April, 2015, and post that date), or to calculate the gain (or loss) over the whole period of ownership of the property. Non UK resident individuals (and trustees) are given the same CGT Annual Exemption as is available to UK residents: for UK tax year 2017/18 this is £11,300 for individuals and £5,650 for trustees. Non UK resident individuals pay CGT at 18% or 28% upon the disposal of a residential property in the UK, depending on the level of their other income and the amount of the gain. Principal Private Residence (PPR) relief continues to be available. Under the new regime PPR relief is only available (determined on a year to year basis) if the individual making the disposal is tax resident in the same country as the property for that tax year, or the individual meets a “90 day rule”. To meet the “90 day rule”, the individual must have spent at least 90 midnights in the property in the tax year for which the PPR relief is claimed. This means that non UK resident individuals who spend 90 nights a year or more in the UK are able to sell their property free of UK CGT. However – and importantly – such individuals will need to be careful that they do not then become UK resident for general tax purposes. In particular, such individuals will need to have reference to the UK’s Statutory Residence Test, under which an individual’s UK tax residency status is considered based on the time spent in the UK as well as a “sufficient ties” test (one of which is a 90 day test). The new occupancy test does not apply for any year that a spouse or civil partner is UK resident. PRR applies for that year in the normal way in that relief is given to the extent that the property is the taxpayer’s only or main residence. Importantly, a non resident taxpayer selling a residential property in the UK is required to report the disposal of the property on a Non Resident CGT (NRCGT) return within 30 days of the day after the date the property sale is completed (i.e. the date when title is conveyed). Any CGT owing is also to be paid to HM Revenue within the same timeline, unless the taxpayer is already within the UK’s self assessment (SA) system. Most who are non UK resident and who are letting a UK property will already be lodging UK tax returns each year under the SA system. If the taxpayer is already within the UK’s SA system, s/he will still need to report the disposal on a NRCGT return within 30 days, with payment of tax arising then to be made as part of the normal end of year tax payment to HMRC. The NRCGT return is lodged online through the HM Revenue web site. Taxpayers who are already within the SA system report the disposal on the NRCGT return within 30 days of the conveyance and on the SA tax return for the tax year in which the property is sold. More specifically, the relevant SA tax return is for the year when the disposal took place, remembering that a disposal for CGT purposes takes place when the contract to sell the property is agreed. Thus, if unconditional contracts of sale are exchanged on the 31st of March, 2018 and the sale of the property completes on the 1st of May, 2018, the relevant SA return is for the tax year ended the 5th of April, 2018, not 2019. All disposals have to be reported to HMRC on a NRCGT return, whether or not there is a tax liability. The late lodgment of a NRCGT return can be expected to trigger a late filing penalty. We invite all who have sold – or are planning to sell – a residential property in the UK to contact Collett and Co Tax to discuss how we might help, including preparing capital gains tax computations under the tax rules of the UK and Australia to identify whether there is any capital gains tax payable in either or both countries. Any CGT payable in the UK should be creditable against the CGT payable in Australia on the same disposal. If you would like to discuss your situation and plans with a tax consultant who is familiar with tax in the UK and in Australia complete our enquiry form. We will be pleased to have a free initial discussion to explore your situation, and to explain how we might help.
  4. Hi, I am married but my wife will migrate to Australia and be tax resident there probably for 2 or 3 yrs before I will migrate myself. She will work and pay taxes in Australia and live in a house in Australia that we will buy. I will stay in the UK in our main residence where my wife and I have lived for 16 years. When I sell the family home in the UK (let's say in 2 years from now) what is the CGT situation? I'm pretty sure I would have no CGT liability as I'm resident in the house and a UK tax payer. The question is really about my wife's situation. Is there a CGT liability in both the UK AND in Australia? Are there any allowances for it being her "main" residence despite not having lived there for 2 years? I read somewhere that to get CGT relief in the UK she must live in the UK house for 90 days in the year. This may not be possible in her case. I've started thinking about taking her name off the deeds of the house as a solution but it seems a bit drastic!! Thanks in advance for your comments! Skippy
  5. HM Revenue has published FAQs to provide guidance on the new CGT charge that is being introduced on the disposal after the 5th of April 2015 of UK residential property by non-UK resident individuals: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/413988/capital-gains-tax-non-uk-res.pdf Best regards.
  6. Hi there, I have a bunch of shares in the UK which I may sell next year. I'm emigrating to Australia next month. What capital gains tax would I have to pay in Australia? Thanks for any help!
  7. https://www.gov.uk/government/consultations/implementing-a-capital-gains-tax-charge-on-non-residents Just released - I am digesting the contents. In due course I will post commentary on our tax blogs: http://www.gmtax.com.au/news/ http://www.gmexpattax.com/index.php/about-gm-expat-tax/blog/ and at our Twitter accounts: https://twitter.com/GMExpatTax https://twitter.com/GoMatildaTax Best regards.
  8. http://www.gmtax.com.au/2014/03/uk-budget-2014-issues-of-importance-to-non-uk-residents/ Nothing yet locked in, but the UK seems to be heading in the same general direction as Australia in the way it taxes non residents. See also Andrew Williams' posting on UK pension changes, which again are moving towards the Australian model in terms of accessing the fund at retirement age. Best regards.
  9. Hi everyone, I have been reading this forum for quite sometime with interest but never actually got around to posting - even though after 3.5 years of living in Brisbane I do have quite a few thoughts as replies to many posts and look forward to sharing my threepence worth in due course. My first post is rather prosaically about finance though I have read quite conflicting responses on this and other forums relating to my situation and would therefore like to get a definitive answer if possible and Im quite sure someone here will know, so please do share. We moved to Brisbane - the best place in Australia - oh dear, hope I haven't already spawned a whole raft of new postings in September 2009. At the time we were really not sure we would be staying here for the duration and so decided not to sell the house. In any case the GFC ensured falling value and limited selling potential; it just didn't seem sensible. I am now potentially regretting the decision! A simple calculation will show that I have been non resident for tax purposes from the Uk for over 3 years and during that time the house has been rented out whilst we have been in Brisbane on a 457 visa. Finally, and somewhat belatedly we decided to apply for PR, submitting the application in September 2012 - we expect a decision within the next few months; hopefully a positive one; fingers crossed! The bank have now imposed a new gratuitous 1.5% levy on the interest rates, declaring it a commercial buy to let mortgage. I know most do this now. Of course I make a tax return each year in the UK and declare all the rent, but we are always beneath the personal tax threshold. If we are staying here we would finally like to buy a house and that almost certainly means selling the UK one. Stupidly I never thought to check if there was a time limit after which CGT would apply. On this forum I have read that so long as you sell it within 6 years and it is your only UK house you are not liable for CGT, but elsewhere I have read the time limit is 3 years, which we are now just outside. Does any one actually know if we are liable and if so, is that for the entire difference between what we paid in 2004 and the sale value whenever that is? Thanks in advance to anyone providing answers and also for the enjoyable time reading other posts. I promise to reply to a few myself in future Chris
  10. Tarby777

    CGT on UK property

    Hi all, Does anyone have the fine detail on CGT (to HMRC or the ATO) when, as a British citizen in Australia as a permanent resident, you sell a UK property that you have received rental income from? The way I understood it was that as long as you kept the proceeds from the sale of the house in a UK account for two years, there was no CGT to worry about. However, some HMRC notes for my tax return allude to possible CGT on the sale of UK properties that you have received rental income from. I haven't sold the house yet but am certainly thinking about it. It was our family home for 10 years till we emigrated 2 years ago... does anyone know the formula / rules as they apply to me? TIA Tarby
  11. I have received an ATO demand for the Medicare levy - is it normal for most Australian taxpayers to pay this as a lump sum after submitting their tax return? I assumed it would be deducted from my pay via PAYE (though I work for a large bank so I assume our payroll know what they are doing). This is my first full tax year as a resident. No objection to paying it - but I don't want to be paying it twice over! Note this is about the levy, not the surcharge (which I don't have to pay as our income isn't high enough). Also we are thinking of selling our UK house, which I bought in 1999 and lived in it until Sept 2009, when I came to Aus. It is now let to tenants. I have had it confirmed by HMRC in the UK that there will by no UK capital gains liability if we sell it within 3 years of leaving OR have five full UK tax years after leaving the UK before selling. So if we sell before Sept 2012 we are OK - but what is the situation with the ATO concerning CGT? I assume any liability would only be on any increase in value since 2009 (which would be slight in any event...). Thanks Alex
  12. Guest

    CGT on Australian property

    I am hoping someone can help me out with the potential Australian and UK CGT liabilities on my properties. I moved to Australia in 1996 and bought a property there in 1998 and lived in it until I moved back to the UK in 2008. I also own a property in the UK which i bought in the 1970s and was my main residence prior to moving to Australia and is now my main residence again since i moved back to the UK in 2008. I still own both properties and have never rented either out. I am now resident and domiciled in the UK but visit Australia for holiday for 3 months each year. If I sell the Australian property now I am unsure whether I have any Australian CGT liability. I have read about the CGT exemption for main residence in Australia but it seems if you use this you cannot designate another property as your main residence. Does the fact that I am no longer resident in Australia and have a main residence in the UK affect the Australian CGT position ? I believe there may be some liability to UK CGT if I sell either property but I can mitigate a good proportion of this by using principal private residence relief for the periods of time that the respective properties were my main residence. Any thoughts on the above appreciated ! Thanks.
  13. supa

    CGT on UK property

    Not sure where to post this but I'll start here. Ref CGT implications, I know you have to prove the value of your UK house (permanent residence) when moving to Oz. Does anyone know what proof I need, ie a surveyors' report(s). If so, how many and who has to do it/them. Also meant to ask, is there a time limit to do the above before moving over? Is CGT payable from profit made between the purchase of your house (approx 14 years ago and considerably less than now!!) and present day? Cheers
  14. Guest

    CGT event in the UK

    I am a dual citizen UK/AUS and have some shares in the UK that I have now sold at a sizeable capital gain. Theses shares have all been held for ~8 years. I become a permanent resident in 2007 so many years of holding the shares were as a temp resident. Questions: 1. This is clearly a CGT event under the ATO definition. Is the CG calculation based on the purchase price or the price in 2007 when I became a PR (I know there are CGT differences for temp residents)? I'm aware I can 50% discount the CG as I've held them >12 months. 2. Does the CG have to be declared in UK or just my Aus return as I've done for all other UK interest in recent years? It always amazes me that tax I pay on a profit generating asset in the UK funds the Australia government rather than the UK government!
  15. I have been living in Oz since May 2007 and own a flat in London (my principal residence until I moved to Oz) and also a 1/2 share (with my sister) of a holiday home in Cornwall which is rented out most of the year. My main source of income during the time in Oz has been the rental income from my London property which I also want to sell to buy another (smaller) place in London. I am now back in the UK since April renovating and staying in my London flat to put it on the market. My sister and I have subdivided the land of the property in Cornwall and obtained planning permission for a property on the plot. We have now had an offer for the plot which she wants to take and use 1/2 the proceeds to buy me out of the existing house (which has been rented out for more than 300 days p/a). Obviously I will have to pay CGT on one of the properties but I am not sure whether I would be better off being a non-resident and thus exempt from a % of the CGT on the sale of my share the house in Cornwall, or a resident (in London) and exempt from the CGT on the London property. I am due to fly back to Oz on 11th July so have to make a decision fast and I think I may need to take professional advice - can anyone recommend someone based in London?
  16. Guest

    house selling CGT problem

    Hi, We would very much appreciate some advice about a CGT issue on our house sale. Money from this sale will hopefully fund our move to Oz - already have a job and visa lined up. 1. Live in rented property. 2. Bought (mortgage) house to renovate - still lived in rental property. 3. Made redundant - this delayed renovation which eventually took 9 years! 4. For the last 1 year have rented out house - we still live in the rented property. 5. Phoned HMRC and was told that because we have not lived in the house CGT is due upon sale. The renovated house is our only house, we are not rich, and the length of time it has taken to get back on our feet/do the renovation means the house price has risen and the CGT is large. CGT liability = selling price - purchase price - purchase costs - renovation costs. CGT payable = 28% of CGT liability. Mortgage during the renovation can not be included. Anyone have any ideas on how to reduce the CGT e.g can selling costs be included etc? Many thanks.
  17. Guest

    Do I have to pay UK CGT

    We bought our house in the UK in 1999 and lived there until we emigrated to Australia in 2001. We have lived in Aus permanently since then. We rented the UK property on and off until 2007 when we sold it (after having a nasty time with tenants). I need to complete my UK tax returns for the last couple of years and not sure if I need to pay UK CGT. Any comments would be appreciated. Cheers
  18. What are the tax implications for keeping savings in the UK and the tax implications for renting out a house? I had a sniff round the ATO website and found some interesting stuff, but it all gets a bit complex and they don’t exactly use layman’s English!! I read on the ATO website that there is a ‘6 year rule’, that if you move out of your main residence and rent it out, you can continue to claim an exemption from CGT for up to six years after you move out… So we could rent out our UK property and have an exemption for CGT for 6 years… See: Moving on? Remember the six year rule for CGT There are certain eligibility criteria, though what would be the situation if within the 6 year period you ALSO bought a property in Australia that you started to live in? Would that deny you the CGT exemption on the UK property? I can’t find the answer to this on the site. Any financial gurus please help! Cheers BB
  19. I'm looking at working on a 457 visa in australia for a few years. I have invested wrapped in an ISA in the UK. As I understand it I can keep them in the ISA after the move but cannot add to it. My plan is just to leave it while I am away. I need to clear up one point though. It's possible that one of the companies may be bought out forcing me to take a profit and thus making me liable to CGT. If I leave the cash in the ISA wrapper and, for instance, invest in another company within the wrapper would I be liable to CGT in Australia? If so does anyone know of a way I can defer the profit from a forced sale (through company takeover) until I am resident once more in the UK? Similarly dividend payments are tax free (well taxed 10% at source anyway) within an ISA but I assume these will be liable to Australian tax.
  20. nick1972

    CGT to pay on UK property??

    Hi, If we sold our property whilst living in Australia (in rented) , would the Australian tax authorities see our UK home as a second property and levy CGT against it? Or would they tax the difference in any forex (i.e move to aussie when $1.80, sell house at $2.00, aussie tax the $0.20) ?? Thanks in advance, Nick.
  21. Hi All, I have a two part question that I hope can be answered. We will be renting our property whilst we are down under (in case things go pear shaped) Will we be subject to tax on the rental income, about 2.5k per month before fees. If so, what would we be left with? If we sold our property whilst in Australia and we lived in rented , would the Australian tax authorities see our UK home as a second property and levy CGT against it? Thanks in advance. :cute: Nick.
  22. Guest

    CGT on Shares

    I have taken part in a company share scheme over the past 7 years. Funds from my UK pay-packet have been used to buy shares in US dollars. I am leaving the company at the month and emigrating to AU. If I sell these shares in the UK I don't believe I would pay CGT (Share schemes have special rules, however I don't have enough to go above the 9200 tax free amount anyway), however is this the case in Australia? I was hoping to sell the shares so that they were paid directly into my AU bank account after I arrive in the country, however if I am liable to pay a load of tax it probably makes more sense for me to sell them now whilst I am an employee in the UK and then transfer them over to AU at a later date. This would mean that I pay two sets of fees to transfer the money from US$ to GBP and then on to $US, however this may be a lot cheaper than getting whacked for CGT. Calculating Capital Gains may also be a logistical nightmare given the monthly payments over 7 years however I'm hoping the share provider would calculate that for me. Any comments or thoughts on the above would be most appreciated.
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