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mrsozb

CGT UK to Australia

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Hello everyone and thank you in advance for any tips/advice. 

 

I have lived over in the UK since 2012 - 2 years on a work visa and nearly 5 years in ancestry with plans to get British citizenship via ILR. 

 

I have been married since 2014 and have one child.  My husband is from the UK. 

 

We are thinking of coming to live in Australia and starting this process within the next 12 months but of course lots to think about!! 

 

Ive been trying to read about CGT but it’s giving me a headache and caused some rather heated debates at the kitchen table!! 

My husband bought a flat in 2008 and I moved in with him in 2013.  

 

From what I have read if we sell before we move to the UK -which we will need to do for financial reasons  - we will be hit with CGT  

 

i will be getting advice professionally but would appreciate any tips as the more I try to figure it out the more i get stressed!! 

 

I guess what I’m asking for is an ‘idiots simple guide’ to what we’re looking at in terms of potential money to the Aust govt and the best way to start planning

Thank you! 

 

 

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Hi,

 

I think you do not have to pay CGT if this was primary home. Please refer to below link however there is info related to Australia.

https://www.ato.gov.au/General/Capital-gains-tax/Your-home-and-other-real-estate/Your-main-residence

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Skills Assessment 05/01/2015; Approved 04/03/2015, IELTS (Overall 7) 14/03/2015; EOI 27/03/2015; Invitation 10/04/2015; Visa applied 15/04/2015; PCC 27/04/2015; Medicals 24/04/2015; Visa Grant 06/07/2015 :ssign7:Visa validation trip February 2016.

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Hi @mrsozb lol sounds like us, tax and gst always cause arguments in our family. 

‘Hopefully @Alan Collett Or @Ken will be along soon as they are the best two I can think of when it comes to CGT.

Ps let me know if you win the argument ??


If you are depressed you are living in the past. If you are anxious you are living in the future. If you are at peace you are living in the present.

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I'm assuming "if we sell before we move to the UK" is a typo as everything else in your post says that you're already in the UK and you meant to say "if we sell before we move from the UK"?  You appear to be saying that your husband has lived in the property ever since he bought it in 2008? If so you'll automatically get a tax relief called "Private Residence Relief" so you'll have no CGT to pay. 

It's different if part of the property is used for a business (but you haven't mentioned anything to suggest that's the case), part of it has been rented out (to more than one lodger) or if you have more than an acre of land - but that would be very unusual for a flat!

It's also different if you sell after ceasing to be UK resident - although even then Private Residence Relief applies to the gain made while you were living there and for 18 months afterwards.

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

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Thank you everyone. 

Yes @Ken apologies for the typo.  We are moving FROM Uk.  

I thought the private resident relief had all changed recently in Australian Parliament?  

Has it not changed regarding residency status? 

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2 hours ago, mrsozb said:

Thank you everyone. 

Yes @Ken apologies for the typo.  We are moving FROM Uk.  

I thought the private resident relief had all changed recently in Australian Parliament?  

Has it not changed regarding residency status? 

There has never been a thing called Private Resident Relief in Australia.  Ken is referring to the British tax rules that will affect you.  If you sell while you're still resident in the UK, British tax rules will apply.  


Scot by birth, emigrated 1985 | Aussie husband applied UK spouse visa Jan 2015, granted March 2015, moved to UK May 2015 | Returned to Oz June 2016

"The stranger who comes home does not make himself at home but makes home itself strange." -- Rainer Maria Rilke

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+1 to what Ken said!

Best regards.

 


Managing Director, Go Matilda Visas - www.gomatilda.com

Registered Migration Agent Number 0102534; Registered Tax Agent (Australia)

Chartered Accountant (UK, and Australia)

T - 023 81 66 11 55 (UK) or 03 9935 2929 (Australia)

E - alan.collett@gomatilda.com

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Thank you.  For some reason I thought that we would be taxed (CGT) on the sale of our flat when we transferred that money to Australia. 

So any monies made from sale of UK flat would go onto our first Australian tax return? 

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1 hour ago, mrsozb said:

Thank you.  For some reason I thought that we would be taxed (CGT) on the sale of our flat when we transferred that money to Australia. 

So any monies made from sale of UK flat would go onto our first Australian tax return? 

Why would it?   You made that transaction and received the proceeds before you became a resident of Australia, so it's none of Australia's business.

The money in the bank is your savings.


Scot by birth, emigrated 1985 | Aussie husband applied UK spouse visa Jan 2015, granted March 2015, moved to UK May 2015 | Returned to Oz June 2016

"The stranger who comes home does not make himself at home but makes home itself strange." -- Rainer Maria Rilke

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4 hours ago, mrsozb said:

Thank you.  For some reason I thought that we would be taxed (CGT) on the sale of our flat when we transferred that money to Australia. 

So any monies made from sale of UK flat would go onto our first Australian tax return? 

No, if your husband sells the flat before he becomes an Australian tax resident then it wouldn't impact his first Australian tax return which would only run from the date he becomes tax resident (which is the date of actually moving to Australia not the date of getting a visa - residency has a different meaning for tax than for immigration purposes).

I believe you may be getting mixed up with the recent changes to the CGT rules which prevent foreign residents from claiming the main residence exemption on their home in Australia. It doesn't affect you.

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

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7 hours ago, Ken said:

 residency has a different meaning for tax than for immigration purposes).

 

Aha!  I hadn't thought about that possibly causing confusion.  

To clarify for @mrsozb - your right to live in a country and your residency for tax purposes are two different things. 

Although you've got a visa for permanent residency in Australia, you're not regarded as a resident for tax purposes until you're actually residing in Australia. 

And after you leave the UK, even though you're British, the Inland Revenue will treat you like a foreigner for tax purposes (with one or two exceptions).  


Scot by birth, emigrated 1985 | Aussie husband applied UK spouse visa Jan 2015, granted March 2015, moved to UK May 2015 | Returned to Oz June 2016

"The stranger who comes home does not make himself at home but makes home itself strange." -- Rainer Maria Rilke

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I’m Australian by birth and will also have a UK passport by the time we move. 

My husband is British and will have a partner visa for Australia. 

 

So I guess like you said it will depend on residency for tax purposes. 

 

Thsbk you.  It’s all just a bit confusing so working through it all bit by bit. 

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6 hours ago, mrsozb said:

I’m Australian by birth and will also have a UK passport by the time we move. 

My husband is British and will have a partner visa for Australia. 

So I guess like you said it will depend on residency for tax purposes. 

Yes, it has absolutely nothing to do with what passports, citizenship or residency rights you hold. What matters is where you're domiciled (i.e. where your home is).


Scot by birth, emigrated 1985 | Aussie husband applied UK spouse visa Jan 2015, granted March 2015, moved to UK May 2015 | Returned to Oz June 2016

"The stranger who comes home does not make himself at home but makes home itself strange." -- Rainer Maria Rilke

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Yes.  Looking to find an accountant who knows both Aus and UK requirements. 

 Not quite sure where to start.  Any tips to find someone suitable?

 

Many thanks 

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6 minutes ago, Marisawright said:

Yes, it has absolutely nothing to do with what passports, citizenship or residency rights you hold. What matters is where you're domiciled (i.e. where your home is).

No, your liability to capital gains tax is primarily a function of your tax residency.

Domicile is an issue affecting your residency, but being domiciled in a place does not necessarily mean you are a tax resident.

For example, you can be domiciled in Australia, but if you have a permanent place of above outside Australia you are not a resident - see Ruling IT2650.

Similarly you can be a resident of the UK and not domiciled there.

Yes, it's complicated!

Best regards.


Managing Director, Go Matilda Visas - www.gomatilda.com

Registered Migration Agent Number 0102534; Registered Tax Agent (Australia)

Chartered Accountant (UK, and Australia)

T - 023 81 66 11 55 (UK) or 03 9935 2929 (Australia)

E - alan.collett@gomatilda.com

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