UK investments (Inc ISA) but living in Oz

[jezmunky]

I have stocks and shares held in the UK including ISAs and I'm now in Sydney on a 417 transferring onto a 457 visa. What should I do with the UK shares? What is the most efficient thing to do tax-wise? Totally bemused?! Any ideas / advice welcome.

[Bungo]

I have stocks and shares held in the UK including ISAs and I'm now in Sydney on a 417 transferring onto a 457 visa. What should I do with the UK shares? What is the most efficient thing to do tax-wise? Totally bemused?! Any ideas / advice welcome.

 

Sorry didn't realise this was the sponsored forum when I posted..

[srh82]

Suggest you talk to John Collett at Go Matilda.

[Andrew from Vista Financial]

I have stocks and shares held in the UK including ISAs and I'm now in Sydney on a 417 transferring onto a 457 visa. What should I do with the UK shares? What is the most efficient thing to do tax-wise? Totally bemused?! Any ideas / advice welcome.

 

 

Hello

 

You may be in a unique situation from an Australian perspective as generally temporary residents are not required to declare worldwide income unlike permanent residents/citizens. However you should discuss further with your Accountant as although generally it is not a requirement there are some situations whereby it is a requirement (I believe an example of this is if the spouse is a citizen).

 

Regards

 

Andy

[Andrew from Vista Financial]

Just to clarify, the above comments are in relation to any income derived from these investments.

 

You may have to pay CGT in Australia on these investments when you eventually sell (depending on your visa status) however more importantly would be what your goals and objectives are for these investments?

 

Selling an investment just to avoid tax does not usually make sense as paying tax on a investment obviously means that a profit/gain is being made.

 

Regards

 

Andy

[Andrew from Vista Financial]

Suggest you talk to John Collett at Go Matilda.

 

Do you mean Alan Collett (http://www.pomsinoz.com/forum/members/8471.html)?

[jezmunky]

Just to clarify, the above comments are in relation to any income derived from these investments.

 

You may have to pay CGT in Australia on these investments when you eventually sell (depending on your visa status) however more importantly would be what your goals and objectives are for these investments?

 

Selling an investment just to avoid tax does not usually make sense as paying tax on a investment obviously means that a profit/gain is being made.

 

Regards

 

Andy

 

Thanks Andy,

 

I don't wish to sell an investment just to avoid paying tax on it, obviously the point of the investment is to make profit.... I guess the real question is "should i sell the shares, convert to cash, move to Australia and reinvest" so I can pay tax here on the profit and not in the UK and here... Interesting you say as a non-resident I wouldn't need to pay CGT, this obviously buys me some time to decide. I have yet to employ an accountant but am looking at $40,000 of profit on the shares.

[Andrew from Vista Financial]

No problem.

 

Just to clarify things as there are potentially two ways tax assessments can be made for shares/investment funds.

 

Firstly tax on income distributions and secondly tax on capital gains, there will then also be two tax regimes to contend with.

 

From a UK perspective:

 

Income/Distributions - (non ISA’s) will need to be declared however depending on your assessable UK income (personal allowance still applicable for British Citizens) tax may or may not be payable.

 

CGT – (non ISA’s) you may find if selling after a certain point there will not be UK CGT on disposal. I am not 100% on the time line as there seems to be two potential time periods I am finding.

 

These are that CGT does not apply to non-UK tax residents and the other is that CGT does not apply to non-UK residents after five full tax years.

 

http://www.gerrardsinternational.com/uk-capital-gains-tax-british-expats-non-uk-residents/

 

Page 44 of this PDF for those abroad permanently: https://www.gov.uk/government/publications/residence-domicile-and-remittance-basis-rules-uk-tax-liability

 

http://www.expertsforexpats.com/expat-tax/capital-gains-tax-for-british-expats/capital-gains-tax-for-non-uk-residents/

 

From an OZ perspective:

Income/Distributions – generally need to be declared in Oz however as already discussed above for certain temp residents there is an exemption.

 

CGT – Australia will start the cost base for investments at the date of arrival, therefore previous loss/gain is not considered.

 

The UK and Australia have a dual tax agreement (DTA) therefore tax would not be doubled up and if tax is paid to one of the countries (if applicable) generally a tax credit applies to the other (if applicable).

 

Therefore it would seem that selling in the UK with 40k profit (realising a UK CGT event) to purchase again in Australia to avoid tax in Australia is not a beneficial strategy.

 

I hope this gives you a more helpful answer, please note that I am not an Authorised Tax Adviser and so you should consult with a tax professional before making any decisions that you impact from a tax point of view.

[jezmunky]

No problem.

 

Just to clarify things as there are potentially two ways tax assessments can be made for shares/investment funds.

 

Firstly tax on income distributions and secondly tax on capital gains, there will then also be two tax regimes to contend with.

 

From a UK perspective:

 

Income/Distributions - (non ISA’s) will need to be declared however depending on your assessable UK income (personal allowance still applicable for British Citizens) tax may or may not be payable.

 

CGT – (non ISA’s) you may find if selling after a certain point there will not be UK CGT on disposal. I am not 100% on the time line as there seems to be two potential time periods I am finding.

 

These are that CGT does not apply to non-UK tax residents and the other is that CGT does not apply to non-UK residents after five full tax years.

 

http://www.gerrardsinternational.com/uk-capital-gains-tax-british-expats-non-uk-residents/

 

Page 44 of this PDF for those abroad permanently: https://www.gov.uk/government/publications/residence-domicile-and-remittance-basis-rules-uk-tax-liability

 

http://www.expertsforexpats.com/expat-tax/capital-gains-tax-for-british-expats/capital-gains-tax-for-non-uk-residents/

 

From an OZ perspective:

Income/Distributions – generally need to be declared in Oz however as already discussed above for certain temp residents there is an exemption.

 

CGT – Australia will start the cost base for investments at the date of arrival, therefore previous loss/gain is not considered.

 

The UK and Australia have a dual tax agreement (DTA) therefore tax would not be doubled up and if tax is paid to one of the countries (if applicable) generally a tax credit applies to the other (if applicable).

 

Therefore it would seem that selling in the UK with 40k profit (realising a UK CGT event) to purchase again in Australia to avoid tax in Australia is not a beneficial strategy.

 

I hope this gives you a more helpful answer, please note that I am not an Authorised Tax Adviser and so you should consult with a tax professional before making any decisions that you impact from a tax point of view.

 

Hi Andrew, thanks for all the info! please correct me if I've read that wrong but that would suggest to leave the assets in the UK, use up taxable allowance and all ISA wrappers, pay the tax in the UK and then just declare the tax paid when filling out my Australian tax return? does that sound about right?

[Andrew from Vista Financial]

It would seem given the situation that leaving assets in the UK would currently offer the most tax efficiency.

 

Regards paying tax in Oz on the income as mentioned above that may not be applicable given your visa status.

 

KR

 

Andy