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Will I get taxed for bringing in lump cash sum from sale of UK house?

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Hi all

 

we emigrated May 2014 and rented out our UK house. Now the tenant has given notice and we're wondering if it's time to sell, or best to hold on to it. I'm aware we'd have to pay CGT, however that would be negligible as the property value has slumped since I bought it in 2007. My question is, if I sold the house (which has some equity in it due to the large deposit I put down), and bought the money into Australia, would I pay tax on this? Is there a tax on equity as well as capital gains?!

 

all advice much appreciated, many thanks.

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No tax on the lump sum itself. It's your money - it's not income.

 

You could be liable for tax on any interest earned by the lump sum whilst waiting to bring it over to Australia.

 

Plus, I believe there's a bit of a grey area regarding tax on any forex gains (difference in exchange rates between selling property and bringing money over).

You'd need to consult an accountant for details.

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Hi all

 

we emigrated May 2014 and rented out our UK house. Now the tenant has given notice and we're wondering if it's time to sell, or best to hold on to it. I'm aware we'd have to pay CGT, however that would be negligible as the property value has slumped since I bought it in 2007. My question is, if I sold the house (which has some equity in it due to the large deposit I put down), and bought the money into Australia, would I pay tax on this? Is there a tax on equity as well as capital gains?!

 

all advice much appreciated, many thanks.

 

If you're permanent residents then you'd be liable for Australian CGT (you could offset any UK CGT paid but if you're selling now there won't be any UK CGT on a residential property) based on the gain between the value of the property when you became Australian Residents (for property you owned before hand) and what you sold it for (less selling cost e.g. Agents Fees and legal charges).

 

There is only a tax on income (which includes capital gains) there are no taxes on moving your money from one bank account of yours to another bank account of yours even when one is in the UK.


Chartered Accountant (England & Wales); Registered Tax Agent & Fellow of The Tax Institute (Australia)

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If you're permanent residents then you'd be liable for Australian CGT (you could offset any UK CGT paid but if you're selling now there won't be any UK CGT on a residential property) based on the gain between the value of the property when you became Australian Residents (for property you owned before hand) and what you sold it for (less selling cost e.g. Agents Fees and legal charges).

 

 

Just note the the change in value for CGT purposes is in Australian Dollars. The rate in May 2014 was around 55p to the dollar now around 48p this would increase the gain over and above the UK pound rise in value. However I believe you may be able to claim the 6 year rule if the property was your main residence where no CGT is due. This will depend on your circumstances. You can only have 1 home that is exempt at any time but this can be by electing which one you want to be exempt. The rules need to be investigated and professional advice can help.

Getting valuations at the time of immigration are a must for anyone coming to Australia. Also the UK changed the CGT exemption from 3years (effectively no tax as long as you were away from the UK longer than 5 years) to 18 months on a former home for UK non residents in April 2015 based on the value at April 2015.


:confused:

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Thanks all so much, it's all so complicated! Sounds like there may be some small taxes to pay but nothing major. We've got some thinking to do...

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Just note the the change in value for CGT purposes is in Australian Dollars. The rate in May 2014 was around 55p to the dollar now around 48p this would increase the gain over and above the UK pound rise in value. However I believe you may be able to claim the 6 year rule if the property was your main residence where no CGT is due. This will depend on your circumstances. You can only have 1 home that is exempt at any time but this can be by electing which one you want to be exempt. The rules need to be investigated and professional advice can help.

Getting valuations at the time of immigration are a must for anyone coming to Australia. Also the UK changed the CGT exemption from 3years (effectively no tax as long as you were away from the UK longer than 5 years) to 18 months on a former home for UK non residents in April 2015 based on the value at April 2015.

 

Thank Winter1 - yes I should have mentioned the primary residence exemption as it is very relevant and a no-brainer to claim it if selling the property before buying in Australia or for any period you were resident in Australia before buying a property. Needs more thought once you do own a property in Australia and so need to choose whether to use the exemption on the property you're selling or keep it for the property you are living in - but you don't need to make the choice until filing the tax return for the year the first sale took place.


Chartered Accountant (England & Wales); Registered Tax Agent & Fellow of The Tax Institute (Australia)

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