Bridgeman Posted June 18, 2013 Share Posted June 18, 2013 My sister and I took over the title of my father's house in 1998. This has been rented out for the past 2 years and we have now decided to sell. We are both in Oz, my sister is an Oz citizen and I am a permanent resident and we both pay taxes in Oz. I assume that we will have to pay CGT on the increase in the property value since 1998. Does anyone know how to get a valuation of what the property was worth in 1998? Also would we have to pay the CGT in the UK or in Australia? If the latter does anyone know what the rate is or can point me in the right direction? Neither of us has lived in the house since we left home, and I do not own another house as I am renting in Oz, although my sister has her own property here. Link to comment Share on other sites More sharing options...
cki2011 Posted June 18, 2013 Share Posted June 18, 2013 My sister and I took over the title of my father's house in 1998. This has been rented out for the past 2 years and we have now decided to sell. We are both in Oz, my sister is an Oz citizen and I am a permanent resident and we both pay taxes in Oz. I assume that we will have to pay CGT on the increase in the property value since 1998. Does anyone know how to get a valuation of what the property was worth in 1998? Also would we have to pay the CGT in the UK or in Australia? If the latter does anyone know what the rate is or can point me in the right direction? Neither of us has lived in the house since we left home, and I do not own another house as I am renting in Oz, although my sister has her own property here. I was told with my family home I grew up in which I bought and others too that if you have lived in it at any time more than 12 months you don't pay capital gains tax.... Not sure if this applied to you with being away so long but I would check it out.... Link to comment Share on other sites More sharing options...
Rupert Posted June 18, 2013 Share Posted June 18, 2013 I was told with my family home I grew up in which I bought and others too that if you have lived in it at any time more than 12 months you don't pay capital gains tax.... Not sure if this applied to you with being away so long but I would check it out.... What you were told is not correct. Unless it was your primary residence, the time you lived in it (as owner) versus rented out would be added up and the gain prorated. Being your childhood home is completely irrelevant. OP how long have you been outside the UK? Link to comment Share on other sites More sharing options...
cki2011 Posted June 18, 2013 Share Posted June 18, 2013 What you were told is not correct. Unless it was your primary residence, the time you lived in it (as owner) versus rented out would be added up and the gain prorated. Being your childhood home is completely irrelevant. OP how long have you been outside the UK? I lived there from a child moved out to work in London but always kept it as my base address so it was like I never left really.... Thus never paid any tax when I sold it years later.... Link to comment Share on other sites More sharing options...
Rupert Posted June 18, 2013 Share Posted June 18, 2013 I lived there from a child moved out to work in London but always kept it as my base address so it was like I never left really.... Thus never paid any tax when I sold it years later.... It is not relevant that you lived there as a child or whether you used it for correspondence. The only thing that matters is how you used it whilst you were *owner* and whether you had any other properties. If it was your only *owned* property, then it is entirely reasonable that you paid no CGT, in fact even if it wasnt your only property with allowances it is still feasible there is no CGT. But certainly you were not exempt from CGT for any of the reasons you have stated. Link to comment Share on other sites More sharing options...
cki2011 Posted June 18, 2013 Share Posted June 18, 2013 It is not relevant that you lived there as a child or whether you used it for correspondence. The only thing that matters is how you used it whilst you were *owner* and whether you had any other properties. If it was your only *owned* property, then it is entirely reasonable that you paid no CGT, in fact even if it wasnt your only property with allowances it is still feasible there is no CGT. But certainly you were not exempt from CGT for any of the reasons you have stated. We had 7 properties at one point but sold them around 2004 and made good money.... We also have a really good accountants who managed to sort things for us.... You are right it was our principle residence so we paid no tax.... Link to comment Share on other sites More sharing options...
srg73 Posted June 18, 2013 Share Posted June 18, 2013 From our experience, I understand that you will have to pay full capital gains tax as this is only discounted for 2 years in the uk. I would anticipate that you will pay on the money entering Aus based on uk valuations provided by uk estate agent who will calculate values for taxation. I would get independent advice. S Link to comment Share on other sites More sharing options...
Rupert Posted June 18, 2013 Share Posted June 18, 2013 From our experience, I understand that you will have to pay full capital gains tax as this is only discounted for 2 years in the uk. I would anticipate that you will pay on the money entering Aus based on uk valuations provided by uk estate agent who will calculate values for taxation. I would get independent advice. S No, don't think this is correct either. In fact as this is only property OP owns there is definitely no CGT but there could be for sister, it is very relevant to know how long she has been outside UK for this reason. Link to comment Share on other sites More sharing options...
cki2011 Posted June 18, 2013 Share Posted June 18, 2013 Sounds like a bit of a mine field I would seek professional help and go with that.... Link to comment Share on other sites More sharing options...
newjez Posted June 19, 2013 Share Posted June 19, 2013 Not sure how you got out of paying CGT on 7 properties. Just because the accountants say it is so - doesn't mean that the taxman will. But I guess unless you go bragging about it on an open forum where the taxman can trace your IP address you should be ok. Ooopppsss! Shhhhhhhh! We had 7 properties at one point but sold them around 2004 and made good money.... We also have a really good accountants who managed to sort things for us.... You are right it was our principle residence so we paid no tax.... Link to comment Share on other sites More sharing options...
Bridgeman Posted June 19, 2013 Author Share Posted June 19, 2013 What you were told is not c orrect. Unless it was your primary residence, the time you lived in it (as owner) versus rented out would be added up and the gain prorated. Being your childhood home is completely irrelevant. OP how long have you been outside the UK? We have now been in Australia for 2 years, apart from a 3 week visit home for dad's funeral. My sister, however has been here for around 16 years I think. We did have our own house in the UK before we came over to Oz which we sold, so this would probably be classed as our principal residence. It does sound a bit complicated so maybe we need advice from an accountant. We took over the title of the house under a Declaration of Trust agreement, ie dad signed over the house to us in exchange for a monthly income from us - just a thought - wondering if the money we paid out for several years could be offset against the CGT. Think we need to see an accountant. Link to comment Share on other sites More sharing options...
Alan Collett Posted June 19, 2013 Share Posted June 19, 2013 I assume that we will have to pay CGT on the increase in the property value since 1998. If you are a permanent resident and tax resident of Australia, and have not been (and will not be) resident in the UK at any time in the tax year in which you sell the property: * There is no UK CGT to consider. * Australian CGT is to be computed, with reference to the property's value date on which you became a permanent resident and tax resident of Australia. Remember also the CGT discount, and the need to convert the property's value into A$s at the date you became a permanent resident and tax resident of Australia. Best regards. Link to comment Share on other sites More sharing options...
Bridgeman Posted June 20, 2013 Author Share Posted June 20, 2013 I assume that we will have to pay CGT on the increase in the property value since 1998. If you are a permanent resident and tax resident of Australia, and have not been (and will not be) resident in the UK at any time in the tax year in which you sell the property: * There is no UK CGT to consider. * Australian CGT is to be computed, with reference to the property's value date on which you became a permanent resident and tax resident of Australia. Remember also the CGT discount, and the need to convert the property's value into A$s at the date you became a permanent resident and tax resident of Australia. Best regards. Many thanks, Alan, that's good news. I probably won't have much, if anything to pay then. Unfortunately this will hit my sister more than me as she was already in Australia when we took over the title. Link to comment Share on other sites More sharing options...
Alan Collett Posted June 20, 2013 Share Posted June 20, 2013 Remember that the £ cost base is translated into A$'s using the rate of exchange pertaining on commencement of tax residency - the gain might not be so bad measured in A$ terms. In case of need: http://www.gmtax.com.au/contact/ Best regards. Link to comment Share on other sites More sharing options...
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