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Transferring House Sale funds (GBP) to Australia


Plentymech

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  • 1 month later...

Well my UK house was finally sold and I got the money via Wise in 24 hours. Surprisingly, neither Wise nor any of the Australian banks involved asked for any documentation - and it was a 6 figure amount. This was the first time I had used my Wise account too (opened years ago in anticipation of sending money to Aus) which makes it even more surprising.

They did charge several thousand quid but in the end it just works out as being a slightly worse exchange rate.

 

I would have used Atlantic Money as a backup if Wise failed for some reason, but given their constraints, it would have needed to be done in 10 or more transactions and/or 3 transactions in person in the UK. Wise could do it in a single transaction and there was no need to interact with anybody at all.

 

I have used the money to purchase a property here in Aus, and even more surprisingly my conveyancer did not care about the source of funds one bit. I did ask and he just told me a funny story of a dodgy client who sent the funds from 50 accounts in different names... unlike my UK solicitor, who when buying our UK house spent more time grilling us over the provenance of every pound than on the actual conveyancing (but to be fair it was fairly simple)

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Philip

Did you have to delcare the cash here in Australia and get taxed at all or simply transfer from UK and use for purchase of house here? In similar situation and weary of getting hit with a unexpected tax bill further down the line.

 

Thanks

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4 hours ago, GerryM said:

Did you have to delcare the cash here in Australia and get taxed at all or simply transfer from UK and use for purchase of house here? In similar situation and weary of getting hit with a unexpected tax bill further down the line.

Did you sell your own home, that you were living in before you moved, or was it rented out?

If it was your own home, then there are no Australian tax liabilities.  If you rented it out, even for a short time, then it's an investment property and you should've been declaring the rental income already.   I'd advise using a tax agent to work out what your liability for tax would be, but bottom line is that it doesn't matter because how or when you transfer the money won't make any difference to the tax liability. 

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3 hours ago, Marisawright said:

Did you sell your own home, that you were living in before you moved, or was it rented out?

If it was your own home, then there are no Australian tax liabilities.  If you rented it out, even for a short time, then it's an investment property and you should've been declaring the rental income already.   I'd advise using a tax agent to work out what your liability for tax would be, but bottom line is that it doesn't matter because how or when you transfer the money won't make any difference to the tax liability. 

If it was the only property he owned (he said he used the money to buy a property in Australia so I'm assuming he didn't already have one) then provided he lived there within the last 6 years, it was still his main residence and so CGT exempt regardless of being rented out.

Edited by Ken
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45 minutes ago, Ken said:

If it was the only property he owned (he said he used the money to buy a property in Australia so I'm assuming he didn't already have one) then provided he lived there within the last 6 years, it was still his main residence and so CGT exempt regardless of being rented out.

I know about the exemption, was just trying to keep it simple.  Anyway, I thought that if he bought another property and has been living in it, the UK house can't be claimed as his main residence any more?

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21 hours ago, Marisawright said:

Did you sell your own home, that you were living in before you moved, or was it rented out?

If it was your own home, then there are no Australian tax liabilities.  If you rented it out, even for a short time, then it's an investment property and you should've been declaring the rental income already.   I'd advise using a tax agent to work out what your liability for tax would be, but bottom line is that it doesn't matter because how or when you transfer the money won't make any difference to the tax liability. 

This is incorrect regarding the "primary residence" rules around CGT when sold.

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On 09/04/2024 at 16:08, Philip said:

I did ask and he just told me a funny story of a dodgy client who sent the funds from 50 accounts in different names... 

Its called "cuckoo smurfing" - its a real thing and commonly used to evade detection/paying tax

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On 14/04/2024 at 19:23, Marisawright said:

I know about the exemption, was just trying to keep it simple.  Anyway, I thought that if he bought another property and has been living in it, the UK house can't be claimed as his main residence any more?

No. You can only have one property as your main residence at a time (other than for a short overlap period) but just because you are living in a house doesn't mean you have to choose that one to be your main residence at the time.

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On 09/04/2024 at 16:08, Philip said:

..and even more surprisingly my conveyancer did not care about the source of funds one bit...

Very different to a UK property purchase we just made in my partner's name...

Needed to send £3 to do a legal search, their card got blocked so to keep things moving I paid with mine.

Cue a request from the solicitor for a full due diligence and KYC on me as well. Pointed out that I was nothing to do with the transaction, but that was not enough and so many pages of carp later they could buy a property I had no interest in. Go figure!

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