Moving to UK

[karen williams]

I sold my house in Melbourne last year, I have had the money on term deposit up until recently. I am currently living in a unit that was previously in my Husbands name, he passed away the title is now in my name.it was previously rented out for approx. 20 years. I am in full time employment so for tax purposes  I think it may be better to rent it out for a while when I leave and sell it in the next financial year. I am confused re the safest way to transfer money to UK, I have been looking at property and if I buy a home how do I transfer the funds? I visited England in September and opened a bank account. 

[Amber Snowball]

6 hours ago, karen williams said:

I sold my house in Melbourne last year, I have had the money on term deposit up until recently. I am currently living in a unit that was previously in my Husbands name, he passed away the title is now in my name.it was previously rented out for approx. 20 years. I am in full time employment so for tax purposes  I think it may be better to rent it out for a while when I leave and sell it in the next financial year. I am confused re the safest way to transfer money to UK, I have been looking at property and if I buy a home how do I transfer the funds? I visited England in September and opened a bank account. 

Can’t answer the tax question but I used Moneycorp to transfer my house funds. You can open an account via the link on this forum so you don’t pay fees. There are other companies as well if you google. Don’t use a bank. They have high fees and poor exchange rates as a rule.

[Marisawright]

While you're an Australian resident, you get a tax concession for capital gains tax. 

Once you leave the country, you lose that concession.

The result is that you'll pay DOUBLE the amount if you wait and sell after you leave.

[Alan Collett]

I think you may need the following capital gains tax computations prepared:

If sold while you are in Australia

>   Australia, as a tax resident of Australia

If sold when living in the UK/non resident in Australia

>  Australia, as a non resident of Australia

>   UK, as a resident of the UK

.

Best regards.

[karen williams]

18 hours ago, Amber Snowball said:

Can’t answer the tax question but I used Moneycorp to transfer my house funds. You can open an account via the link on this forum so you don’t pay fees. There are other companies as well if you google. Don’t use a bank. They have high fees and poor exchange rates as a rule.

Thank you that's very helpful, sounds like it can be a bit of a minefield.

 

[Marisawright]

8 hours ago, karen williams said:

Thank you that's very helpful, sounds like it can be a bit of a minefield.

 

The main thing is to be sure you understand the tax implications of selling the unit.  It would be worth contacting Alan Collett and paying him to do the calculations he mentions - he knows his stuff.  

Everyone's circumstances are different, but as a for instance:  when we were thinking of going back to the UK, I had an investment unit.   If I sold it while we were still resident in Australia, the tax was about $30,000.   If I'd waited till I'd arrived in the UK, the tax would've been $60,000.  And that's only the Australian tax office - once I was living in the UK, the Inland Revenue might have wanted a slice as well, but I never looked into that - the Australian tax was bad enough!

As for transferring the money - it's not as bad as it sounds. I used Moneycorp.  i confess, i did get into a tangle trying to use their online service, but that was just me being dumb.  What I liked was being able to ring them up and talk to a real person who actually does the job, not just a call centre operator.  They had me sorted out in no time and I've used them for transfers ever since.  

Edited October 5, 2018 by Marisawright

[karen williams]

I have a Financial adviser in Melbourne, he does my tax return etc he also seems to know about Capital Gains Tax, not sure if he would be much good where moving overseas is concerned, someone has suggested I contact the Tax Office and ask them, bit wary of doing that. It's good news that I could ring someone at Money Corp, I think this is one of the times I would not be comfortable with doing everything on line. Regards  Karen

 

[Marisawright]

2 hours ago, karen williams said:

I have a Financial adviser in Melbourne, he does my tax return etc he also seems to know about Capital Gains Tax, not sure if he would be much good where moving overseas is concerned, someone has suggested I contact the Tax Office and ask them, bit wary of doing that. It's good news that I could ring someone at Money Corp, I think this is one of the times I would not be comfortable with doing everything on line. Regards  Karen

 

He would know about Capital Gains Tax in Australia but it's very unlikely he'll be knowledgeable about UK tax.  Once you're resident in the UK, the British tax office might want to take a chunk too.

We've had people on these forums who relied on their existing advisers on tax, and it all ended in disaster.  There's really no substitute for using someone who knows both systems thoroughly.  Like I said, if I'd got it wrong, it would've cost me an extra $30,000 in tax and it's not worth that risk.  I'd suggest contacting Alan Collett and getting him to do the calculation he suggests. Then you know exactly where you stand.

[Alan Collett]

In my experience financial advisors are great at tax in the context of investment planning - which often includes capital gains tax on the disposal of investments.

The cessation of tax residency in Australia brings with it consequences that many have not encountered - eg the deemed disposal of investment assets at their market value (see CGT Event I1).

There can then be provisions in Tax Treaties that mitigate this.

Best regards.