Guest Guest41869 Posted May 15, 2016 Share Posted May 15, 2016 Hi Sorry if this has been ased a million times, we have just sold our house in uk after renting it out for 5 years. I am ok with tax rules here in Australia but i believe i may be liable to pay capital gains in the UK on the profit from the sale. Does anyone have and knowledge or recent experience of roughly how much i will need to pay?? Im a bit reluctant to buy in Oz if a big tax bill may bite us on the bum down the track. Thanks in advance Link to comment Share on other sites More sharing options...
stephensteve Posted May 15, 2016 Share Posted May 15, 2016 I have sold a flat in U.K in past 12 months, I gave the details to a UK tax adviser to do the right thing... after claiming my allowance of 11,100 pounds ( poss more for u if in joint names ) I paid 18% ( more if you're a higher rate tax payer, of course, ) on the profit...difference between purchase and sale..... also remember you have a tax free threshold in your favour in Uk.....!! I would recomend a tax adviser to make sure you get it right...What is your profit..??? Good luck Link to comment Share on other sites More sharing options...
Bungo Posted May 15, 2016 Share Posted May 15, 2016 HiSorry if this has been ased a million times, we have just sold our house in uk after renting it out for 5 years. I am ok with tax rules here in Australia but i believe i may be liable to pay capital gains in the UK on the profit from the sale. Does anyone have and knowledge or recent experience of roughly how much i will need to pay?? Im a bit reluctant to buy in Oz if a big tax bill may bite us on the bum down the track. Thanks in advance There is no may about it, you definitely need to consider UK tax and you need to do that before the Australian tax, UK taxman gets first bite of the cherry on a UK property. A tax bill will not bite you in the bum down the track either, it needs to be dealt with very quickly, within 30 days of sale. It is impossible for anyone to guesstimate see if your bill because you have not mentioned any figures. What did you buy for? Sell for? How long did you own the house? Is it jointly owned? I would guess that it won't be as bad as you think though. Link to comment Share on other sites More sharing options...
Guest Guest41869 Posted May 15, 2016 Share Posted May 15, 2016 I have sold a flat in U.K in past 12 months, I gave the details to a UK tax adviser to do the right thing... after claiming my allowance of 11,100 pounds ( poss more for u if in joint names ) I paid 18% ( more if you're a higher rate tax payer, of course, ) on the profit...difference between purchase and sale..... also remember you have a tax free threshold in your favour in Uk.....!! I would recomend a tax adviser to make sure you get it right...What is your profit..??? Good luck I have been reading on HMRC about claiming Private Residence Relief and the rules of selling before 6th October 2016. This is my only residence and i havev a UK personal tax threshold of £10,000 none of which will have been used in this financial year as the house has been empty since March. Our profit is going to be £89,000. How did you find a tax advisor? Link to comment Share on other sites More sharing options...
Guest Guest41869 Posted May 15, 2016 Share Posted May 15, 2016 There is no may about it, you definitely need to consider UK tax and you need to do that before the Australian tax, UK taxman gets first bite of the cherry on a UK property. A tax bill will not bite you in the bum down the track either, it needs to be dealt with very quickly, within 30 days of sale. It is impossible for anyone to guesstimate see if your bill because you have not mentioned any figures. What did you buy for? Sell for? How long did you own the house? Is it jointly owned? I would guess that it won't be as bad as you think though. Hi, its a very confusing mine field!! I have spoken to my accountant here who has reassured me because i have been here only 5 years and it is my only gome i will not be hanmered for tax here. The HMRC says the following Link to comment Share on other sites More sharing options...
Bungo Posted May 15, 2016 Share Posted May 15, 2016 ... Link to comment Share on other sites More sharing options...
stephensteve Posted May 15, 2016 Share Posted May 15, 2016 Tax Advisers are plentiful, have a google for one in your area........good luck Keep us posted Link to comment Share on other sites More sharing options...
stephensteve Posted May 15, 2016 Share Posted May 15, 2016 I have been reading on HMRC about claiming Private Residence Relief and the rules of selling before 6th October 2016.This is my only residence and i havev a UK personal tax threshold of £10,000 none of which will have been used in this financial year as the house has been empty since March. Our profit is going to be £89,000. How did you find a tax advisor? You already stated that you rented it out for 5 years..Haha Link to comment Share on other sites More sharing options...
Guest Guest41869 Posted May 15, 2016 Share Posted May 15, 2016 You already stated that you rented it out for 5 years..Haha Not sure what is funny? For tax purposes if you only own 1 property regardless of whether you rent it out it is considered your primary residence, given that it was a lived in family home and not bought as a buy to let Link to comment Share on other sites More sharing options...
Peach Posted May 15, 2016 Share Posted May 15, 2016 Not sure what is funny? For tax purposes if you only own 1 property regardless of whether you rent it out it is considered your primary residence, given that it was a lived in family home and not bought as a buy to let If you've been treating it as a primary residence, I presume that you haven't been offsetting the costs associated with renting it out on your Aussie tax return? Link to comment Share on other sites More sharing options...
Guest Guest41869 Posted May 15, 2016 Share Posted May 15, 2016 Yes i have declared the rent to both uk and australian tax offices. As the rent is low it comes in under my personal tax allowance in the uk and i pay tax on the rent here as it comes under my total income (including foreign income) Link to comment Share on other sites More sharing options...
Mel Lofts Posted May 15, 2016 Share Posted May 15, 2016 The rules changed for UK expats last year. It used to be zero capital gains tax for UK expats on the sale of private residential property as long as you had been out if the UK for 5 years or not expected to return within 5 years. As of 6th April 2015 capital gains tax is due - but only on the gain in value between the 6th April 2015 and the value at the sale. I think this is then taxed at 28% so you will need to get someone to value what it should have been worth on 6th April 2015. Maybe a surveyor. Link to comment Share on other sites More sharing options...
Peach Posted May 15, 2016 Share Posted May 15, 2016 Yes i have declared the rent to both uk and australian tax offices. As the rent is low it comes in under my personal tax allowance in the uk and i pay tax on the rent here as it comes under my total income (including foreign income) I don't get how you can get the benefit of making deductions against it as rental, but get the benefit of it being a primary residence when you sell? I'm not an expert but would assume the the Aussie Tax man would want a bite of the cherry too. (I'm in the same boat in that my UK home is split between my and the other half, so comes under the UK tax threshold). But I always get stung come tax time. Link to comment Share on other sites More sharing options...
Guest Guest41869 Posted May 15, 2016 Share Posted May 15, 2016 Thanks, i have just become acqintainted with the new tax laws today, nearly had a heart attack but my very sensible and money savy brother in law has calmed me down and explained how to calculate capital gains per month etc and it all seems less confronting and scary!!! Link to comment Share on other sites More sharing options...
Guest Guest41869 Posted May 15, 2016 Share Posted May 15, 2016 If you've been treating it as a primary residence, I presume that you haven't been offsetting the costs associated with renting it out on your Aussie tax return? Don't ask me! i have just been open and honest with the UK and Australian tax authorities and paid the tax I've been asked to, ive never attempted to fiddle or try and get out of what i owe. Link to comment Share on other sites More sharing options...
Bungo Posted May 15, 2016 Share Posted May 15, 2016 Not sure what is funny? For tax purposes if you only own 1 property regardless of whether you rent it out it is considered your primary residence, given that it was a lived in family home and not bought as a buy to let No it isn't. If your house has been rented out it is IMPOSSIBLE* under UK tax law to claim it is your primary residence for that period *other than for a very specific 18 months situation which I will go into below. But generally no, that is a contradiction of terms, if somebody else is living in your house then it could not possibly have been your primary residence for those five years. The reason you do not have a CGT issue, is a different one. It is because you lived in the house at one point, you are allowed to treat the last 18 months of ownership as if you did live in it and as if it were your primary residence. And as a non resident, you are only liable for tax since April 2015. But because you can treat the last 18 months of ownership as if it were your primary residence, it means that you have no tax. Link to comment Share on other sites More sharing options...
Bungo Posted May 15, 2016 Share Posted May 15, 2016 I don't get how you can get the benefit of making deductions against it as rental, but get the benefit of it being a primary residence when you sell? I'm not an expert but would assume the the Aussie Tax man would want a bite of the cherry too. (I'm in the same boat in that my UK home is split between my and the other half, so comes under the UK tax threshold). But I always get stung come tax time. The Australian tax man would want a bite of the cherry if they also own a home in Australia. If this is the only property, then the Australian tax man is kind and lets people rent their property out for five (or could be six) years before there are any CGT implications. Link to comment Share on other sites More sharing options...
Parley Posted May 15, 2016 Share Posted May 15, 2016 The Australian tax man would want a bite of the cherry if they also own a home in Australia. If this is the only property, then the Australian tax man is kind and lets people rent their property out for five (or could be six) years before there are any CGT implications. It is six years. Link to comment Share on other sites More sharing options...
stephensteve Posted May 16, 2016 Share Posted May 16, 2016 Not sure what is funny? For tax purposes if you only own 1 property regardless of whether you rent it out it is considered your primary residence, given that it was a lived in family home and not bought as a buy to let No offence meant...just found it funny that it gets more confusing, my point being that if you let it out then it is not your residence, I think you need a tax adviser to make sure you get the best deal..good luck Link to comment Share on other sites More sharing options...
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