Foreign Resident tax on sale of UK property?

[Susan from Moneycorp]

Hopefully a simple question:
If a UK-only citizen (not dual-citizen) working short-term in Australia (457), sells their sole property in the UK for a profit (say, £20,000) does the UK Citizen have to pay CGT ?
The client doesn't own any other property here or UK and files an Australian tax return annually.

Thanks
 

[Guest The Pom Queen]

On 27/10/2020 at 17:10, Susan from Moneycorp said:

Hopefully a simple question:
If a UK-only citizen (not dual-citizen) working short-term in Australia (457), sells their sole property in the UK for a profit (say, £20,000) does the UK Citizen have to pay CGT ?
The client doesn't own any other property here or UK and files an Australian tax return annually.

Thanks
 

@Alan Collett may be able to help with that.

[Marisawright]

If the person is an Australian resident for tax purposes, CGT rules apply as if the property is in Australia, as far as I know.

Edited November 4, 2020 by Marisawright

[Ken]

On 27/10/2020 at 18:10, Susan from Moneycorp said:

Hopefully a simple question:
If a UK-only citizen (not dual-citizen) working short-term in Australia (457), sells their sole property in the UK for a profit (say, £20,000) does the UK Citizen have to pay CGT ?
The client doesn't own any other property here or UK and files an Australian tax return annually.

Thanks
 

Temporary residents (which includes 457 visa holders) are exempt from tax on foreign income so would not need to declare or pay any tax in Australia on a capital gain in the UK.

If you are an Australian resident for tax purposes and meet the requirements to be a temporary resident, the temporary resident rules mean:

• Most of your foreign income is not taxed in Australia except income earned from employment or services performed overseas while you are a temporary resident. This income is subject to income tax and would still be declared in your return for the year in which you earned it. If you paid tax in a foreign country, you may be entitled to claim a foreign income tax offset when you lodge and declare that income in your Australian tax return.
• If a capital gains tax event occurs while you are a temporary resident, you are not liable to capital gains tax (nor treated as having made a capital loss) unless the asset is 'taxable Australian property'.
• Special rules apply to capital gains on shares and rights acquired under employee share schemes, for more information, see ESS – Foreign income exemption for Australian residents and temporary residents.
• Interest you pay to foreign residents (for example, foreign lenders) is not subject to withholding tax.
• Controlled foreign company record keeping obligations are partly removed.

Foreign income exemption for temporary residents – introduction | Australian Taxation Office (ato.gov.au)