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Skippy2017

UK house Sale CGT for Oz migrant

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Hi,

I am married but my wife will migrate to Australia and be tax resident there probably for 2 or 3 yrs before I will migrate myself.  She will work and pay taxes in Australia and live in a house in Australia that we will buy.

I will stay in the UK in our main residence where my wife and I have lived for 16 years.

When I sell the family home in the UK (let's say in 2 years from now) what is the CGT situation?

I'm pretty sure I would have no CGT liability as I'm resident in the house and a UK tax payer.

The question is really about my wife's situation.

Is there a CGT liability in both the UK AND in Australia?

Are there any allowances for it being her "main" residence despite not having lived there for 2 years?

I read somewhere that to get CGT relief in the UK she must live in the UK house for 90 days in the year.   This may not be possible in her case.

I've started thinking about taking her name off the deeds of the house as a solution but it seems a bit drastic!!

Thanks in advance for your comments!

Skippy

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 The first question is the house owned in joint names or are you the only one as the registered owner or is your wife the registered owner. It will also depend on the type of Visa you have PR(possibly liable in Australia) or 457( no liability on assets owned outside Australia).

If it is in your name only then there is no liability anywhere if you remain till you sell.

My understanding is that if you purchase another house in Australia you then lose the ability to claim main residence allowance which is available for six years in Australia if you are renting another property.

The UK liability only gives 18 months CGT residence allowance if you do not buy another property(this is the rule since April 2015). As the property is in the UK the HMRC will have first call then any tax paid in the UK can be offset against any Australian Tax due.

You will have a  UK CGT tax allowance each this is around £11,100 the Australian side will depend on your Taxable income.

https://www.gov.uk/capital-gains-tax/rates-6-april-2016

https://www.ato.gov.au/General/Capital-gains-tax/

Check this with an accountant.

 


:confused:

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