Is CGT payable when tranferring house money from the UK?

[Bridgeman]

From what I have read on the ATO website, when you make a lump sum foreign exchange, if that amount has been held back in the UK and then transferred at a later date to take advantage of a better exchange rate, then I understand that the 'difference' is viewed as a capital gain and that tax is due in Oz on this amount. Fair enough.

 

However, what if this money is from the sale of your primary residence in the UK? Is it possible to make an exception if you can prove that the money was from your house sale and that it is intended to be used to buy a property here? We sold our house in 2011 and invested the money in the UK as at the prevailing exchange rate we would not really have been able to afford the kind of house we would like here, due to the inflated prices of houses in Oz and the interest was partly funding rental costs here. We have recently brought some of the money over to Oz, admittedly at a better exchange rate as we have started to look at buying. It seems vastly unfair that we then have to pay tax on the 'difference' when this money is intended to be used to buy our primary residence here.

 

Any advice appreciated.

[MARYROSE02]

Best to see an accountant, either here or in the UK. Their fees will be tax deductable.

[Marisawright]

Yes it does seem vastly unfair! I was totally unaware of this until I saw another thread about it the other day. Can you post a link to where on the ATO website it explains it?

[MARYROSE02]

There is a double taxation agreement between the two countries. I don't pay tax on the money I transfer from the UK from rent and pensions, although I think I have to declare the amount - much see my accountant, because the pension only started in April.

 

I finally, after five years, got around to writing to HMRC requesting I get my UK rent tax free as I'm overseas. I was getting it back each time I put my UK tax return in. Another thing i have to do is to amend last year's return because I forgot to claim the tax I paid. (The estate agent did leave that tax off my statement, though.)

[Dellboy]

Whilst unfair those are the rules I'm afraid. BUT there is something called a 'Limited Balance Election' that can help you in such situations. I'm no expert, but my understanding is that for small FX denominated accounts (up to a total of $250k I think), you can 'elect' (in writing) to disregard currency gains/losses on these accounts. If you search on the ATO website you can find further details.