matt1927 Posted January 16, 2015 Share Posted January 16, 2015 Hi all. Newbie here so go easy! Apologies if this gets posted a million times. I did have a look through some threads already so I understand a little bit on this topic but I want to be sure before I take any action. I've been in Aus for just over 2 years now on a 457 visa. Over the next few months I should move to a PR visa once Immigration get around to my application. I own a property in the UK that I purchased in 2007. The property is currently worth less than what I paid for it although the property has actually increased in value from the time I left for Australia to the current date (Nov 2012 to current). Am I right to say that as the property is worth less than what I have paid for it then I wouldn't be liable for any CGT in Australia? Or does CGT purely look at the gain in value from the time I moved to the current valuation? Regardless if the property is valued at an overall loss? Also, I didn't have the property valued when I left for Australia. Is this potentially a problem? Anything else I may need to be aware of? Thanks for reading. Link to comment Share on other sites More sharing options...
Alaska Posted January 16, 2015 Share Posted January 16, 2015 I believe it will be the value from when you obtain your PR in Australia so this is the time to get the valuation done. We have been through similar recently and this is the advice that we were given from a reputable source. Link to comment Share on other sites More sharing options...
matt1927 Posted January 16, 2015 Author Share Posted January 16, 2015 I believe it will be the value from when you obtain your PR in Australia so this is the time to get the valuation done.We have been through similar recently and this is the advice that we were given from a reputable source. Great. Cheers. I'll make sure I arrange this once my PR comes through then. Out of interest, would you know what the CGT rate is on the amount taxable? The website is just a complicated mess. Link to comment Share on other sites More sharing options...
Parley Posted January 16, 2015 Share Posted January 16, 2015 Any taxable gain would be added to your taxable income for that year so it will depend on what tax bracket you fall into. For assets held over 1 year now you only have to declare half the gain made, ie you get a 50% discount. But it would be best to speak to a tax accountant. Link to comment Share on other sites More sharing options...
matt1927 Posted January 16, 2015 Author Share Posted January 16, 2015 Any taxable gain would be added to your taxable income for that year so it will depend on what tax bracket you fall into. For assets held over 1 year now you only have to declare half the gain made, ie you get a 50% discount. But it would be best to speak to a tax accountant. Thanks mate. I did notice that bit about the 50% discount. So basically, it's in my interest to hold on to it for a year after I get my PR granted (to become applicable for the discount) but the more the value it increases (should it increase), the more CGT I am due to pay. Link to comment Share on other sites More sharing options...
Alaska Posted January 16, 2015 Share Posted January 16, 2015 We are using GM Tax for the tax for this next year as we disposed of 2 houses in the UK as well as getting our PR which changes the taxes so will use the experts for this one year! Link to comment Share on other sites More sharing options...
matt1927 Posted January 16, 2015 Author Share Posted January 16, 2015 We are using GM Tax for the tax for this next year as we disposed of 2 houses in the UK as well as getting our PR which changes the taxes so will use the experts for this one year! Thanks for that, I've saved their site for when I come to selling up my place. I need a better Aus accountant this year as I understand I can somehow claim on my mortgage short fall in the UK once I get PR. I'm currently sending money home to cover the difference between rental income and my mortgage cost. Link to comment Share on other sites More sharing options...
Parley Posted January 16, 2015 Share Posted January 16, 2015 Thanks mate. I did notice that bit about the 50% discount. So basically, it's in my interest to hold on to it for a year after I get my PR granted (to become applicable for the discount) but the more the value it increases (should it increase), the more CGT I am due to pay. Well yes of course, but it is obviously better to have the gain and pay tax on it, than not have the gain. Link to comment Share on other sites More sharing options...
hawthorne Posted January 16, 2015 Share Posted January 16, 2015 I've had advice that exchange rate changes have an impact too - the capital gain is the gain on the AUD-denominated value of the property... Link to comment Share on other sites More sharing options...
Alaska Posted January 16, 2015 Share Posted January 16, 2015 I was told that if you say sell when the exchange rate is 1.85 then bring the money over when it's 1.95 for example, then that will impact the tax too. Link to comment Share on other sites More sharing options...
Alaska Posted January 16, 2015 Share Posted January 16, 2015 I would really recommend talking to GM Tax. They have been very generous with advice in the past and I have no hesitancy using them now my situation is a bit more complicated. Link to comment Share on other sites More sharing options...
matt1927 Posted January 16, 2015 Author Share Posted January 16, 2015 I was told that if you say sell when the exchange rate is 1.85 then bring the money over when it's 1.95 for example, then that will impact the tax too. I see. So with the trend of the AUD weakening against Stirling its also worth taking this factor into account towards the gain. I'll be sure to note the exchange rate on the date I get PR as well then. As mentioned further up though, both the currency exchange rate moving in my favour and the house price increasing in my favour are both things I'd want to happen really. Although I end up paying more tax that way, it's only because I've ended up with more cash in my pocket as it were. It seems that there's always someone above you waiting for some of your money isn't there? Even though I'm losing money on this house, I still have to pay someone some of the proceeds i'll scrape together from it. Sorry, needed to vent there. Link to comment Share on other sites More sharing options...
Gbye grey sky Posted January 16, 2015 Share Posted January 16, 2015 I think you have up to 4 years to bring over money from the sales proceeds of your UK house before there is any tax charge for currency appreciation. We are planning on selling our house before moving but may leave the money for a while in the UK as we will rent to begin with anyway. OObviously that all depends on our best guess at the time on exchange rate movements in the next couple of years. Best check this point out with the accountant too. Link to comment Share on other sites More sharing options...
matt1927 Posted January 16, 2015 Author Share Posted January 16, 2015 Thanks for raising that. So the exchange factor only comes into play 4 years after the sale. Right, ill make sure I check this one as well. Link to comment Share on other sites More sharing options...
wolvesaussie Posted February 1, 2015 Share Posted February 1, 2015 Might try adding something to this before starting my own thread... How about this situation? it is pretty similar. My house is worth much less than I paid for it especially when you factor in what was spend on rewiring, new double glazing, new kitchen etc... Purchased for 87,000 pounds, spend maybe 15,000 on it so about 115,000 , now the estate agents are saying if want a quick sale need to sell for 80,000... So it is a pretty big loss.. having held the house for 8 years. So if I sell you would think there would be no capital gain to pay... However when I moved back to Australia (I am Australia so date of getting PR wont be a factor) the exchange rate was 1.5 now its 1.9.. Does that mean I may have to pay CGT on it? Or would I be fine? Does it make any difference other houses in the same street (so the same house as its the UK ) are on the market for 100,000 - 120000 (not that they are selling for that). What about when they change the law soon so Capital gains has to be paid in the UK, because there is NO capital gain, will I be free of it or will there be some kind of tax double dip where even tho the law says you are now assessed in the UK, the Australian Government can also dip into it and tax you for the same thing? Link to comment Share on other sites More sharing options...
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