Capital Gains Tax for Australians selling UK property

[imarcq]

2 hours ago, MARYROSE02 said:

I think you may still need to open a CGT account on line via the HMRC website and report the sale regardless of whether you are liable for UK tax or not. You may have to file a UK tax return too.

I have a online account for self assessment with HMRC because I have UK income from pensions and until recently rent on my UK home. Since I've sold my UK home I've opened a CGT account but I've not completed it yet.

You can phone HMRC on 001144 135 535 9022 for CGT enquiries.

Possibly 001144 161 931 9070 for self assessment enquiries.

I have a copy of my Govt Gateway letter from 2011 with various phone numbers and other information scribbled on it 

Google  "HMRC capital gains tax account" and "self assessment" and you'll probably find your way there.

I've only just created my own CGT account. You need various forms of ID to do it, ditto the Self Assessment account.

I have an idea of how much CGT I will pay based on the difference between 2015 value of my house or similar and today. I need to do the self assessment for 21 / 22 too then probably have some tax to pay the ATO too when I do that return. I've not lived in the UK since 2008.

Thanks, I'll investigate this. Mark.

[imarcq]

36 minutes ago, DIG85 said:

If the property was still your main home between the grant of probate at the end of 2020 and the exchange of contracts in March 2022 then principal private residence relief should eliminate any gain arising in that period. I didn't make that clear in my OP. The only potential issue is that if it was always your intention to sell the property once probate had been granted, HMRC could argue that the property was held as trading stock and any profit realised on its its sale should be regarded as trading income subject to income tax (as opposed to being a capital asset subject to CGT). This is a very long bow and it would have to be a pretty grumpy inspector who took the point.

Assuming it was a CGT asset, the fact you lived in the property between 2015 and 2020 is irrelevant because you did not own the property during that period.

Thanks again. No it wasn't always my intention to sell the house. I only really decided to come back to Australia in the last year. So it looks as if I wont have to declare any gain in UK. Thank you. 

[Ausvisitor]

9 hours ago, imarcq said:

Thanks again. No it wasn't always my intention to sell the house. I only really decided to come back to Australia in the last year. So it looks as if I wont have to declare any gain in UK. Thank you. 

Slight change to your wording, you will have to declare the gain in the UK, but it is likely the gain will be zero 

[imarcq]

19 minutes ago, Ausvisitor said:

Slight change to your wording, you will have to declare the gain in the UK, but it is likely the gain will be zero 

Oh Ok. I guess as the tax year ended in April I can wait until next April to do this? Thanks.

[DIG85]

21 minutes ago, Ausvisitor said:

Slight change to your wording, you will have to declare the gain in the UK, but it is likely the gain will be zero 

If the gain is wholly covered by principal private residence relief, there is no need to declare the gain in the UK. 

 

Edited May 19, 2022 by DIG85

[imarcq]

4 minutes ago, DIG85 said:

If the gain is wholly covered by principal private residence relief, there is no need to declare the gain in the UK. 

 

I'm getting a few different answers, but the one you have suggested does tally with what the solicitor had said on completion. Thanks again.

[Alan Collett]

https://www.gov.uk/guidance/capital-gains-tax-for-non-residents-uk-residential-property

If you were not resident in the UK when the property was sold there's a need to report the disposal to HMRC, whether or not there is tax to pay.

If you need formal assistance please feel able to contact me at bdhtax.com

Best regards.

[Ken]

On 20/05/2022 at 08:59, Alan Collett said:

https://www.gov.uk/guidance/capital-gains-tax-for-non-residents-uk-residential-property

If you were not resident in the UK when the property was sold there's a need to report the disposal to HMRC, whether or not there is tax to pay.

If you need formal assistance please feel able to contact me at bdhtax.com

Best regards.

According to his original post he didn't return to Australia until May (several years after moving to the UK) with the sale having completed in April. There doesn't appear to be any reason to believe he was non-resident in the UK when the property was sold. Nor does there appear to be any reason to believe he was resident in Australia so Australian CGT does not come in to play.

[imarcq]

26 minutes ago, Ken said:

According to his original post he didn't return to Australia until May (several years after moving to the UK) with the sale having completed in April. There doesn't appear to be any reason to believe he was non-resident in the UK when the property was sold. Nor does there appear to be any reason to believe he was resident in Australia so Australian CGT does not come in to play.

Hi. Thanks for your reply. I was not a non-resident in UK for the 7 years I was there looking after my Dad. I was a resident for tax purposes, subject to UK tax and national insurance rules, and received a carers allowance for caring for my Dad for the last 5 of those years. I had filed a final Australian tax return in 2015, before leaving. I had not planned to return to Australia. I sold the house on April 7. As I am now residing back in Australia from May 6, I assume I'll have to file a basic return here in July. Although I'm not expecting to start working until after that date. I'm almost 60, semi-retired, and draw two small pensions in UK.

Edited May 21, 2022 by imarcq

[imarcq]

On 20/05/2022 at 08:59, Alan Collett said:

https://www.gov.uk/guidance/capital-gains-tax-for-non-residents-uk-residential-property

If you were not resident in the UK when the property was sold there's a need to report the disposal to HMRC, whether or not there is tax to pay.

If you need formal assistance please feel able to contact me at bdhtax.com

Best regards.

Hi, thanks for your reply. I was fully resident in the UK for 7 years, and was still resident for tax purposes when the property was sold. I haven't yet fully informed HMRC that I've permanently left, just changed my address when I called them to sort out my tax codes on two small pensions. I was given a link by a HMRC "Tax Technician" to do this, but he said there was no immediate rush. Thanks again. Mark.

Edited May 21, 2022 by imarcq

[imarcq]

15 minutes ago, imarcq said:

Hi. Thanks for your reply. I was not a non-resident in UK for the 7 years I was there looking after my Dad. I was a resident for tax purposes, subject to UK tax and national insurance rules, and received a carers allowance for caring for my Dad for the last 5 of those years. I had filed a final Australian tax return in 2015, before leaving. I had not planned to return to Australia. I sold the house on April 7. As I am now residing back in Australia from May 6, I assume I'll have to file a basic return here in July. Although I'm not expecting to start working until after that date. I'm almost 60, semi-retired, and draw two small pensions in UK.

 

8 minutes ago, imarcq said:

Hi, thanks for your reply. I was fully resident in the UK for 7 years, and was still resident for tax purposes when the property was sold. I haven't yet fully informed HMRC that I've permanently left, just changed my address when I called them to sort out my tax codes on two small pensions. I was given a link by a HMRC "Tax Technician" to do this, but he said there was no immediate rush. Thanks again. Mark.

I just did the calculator on the HMRC website and it appears that I don't need to declare the sale for CGT as it was my only home for several years. I was a UK resident and I did not leave for the whole time. I also paid the council tax!

[MARYROSE02]

1 hour ago, imarcq said:

Hi. Thanks for your reply. I was not a non-resident in UK for the 7 years I was there looking after my Dad. I was a resident for tax purposes, subject to UK tax and national insurance rules, and received a carers allowance for caring for my Dad for the last 5 of those years. I had filed a final Australian tax return in 2015, before leaving. I had not planned to return to Australia. I sold the house on April 7. As I am now residing back in Australia from May 6, I assume I'll have to file a basic return here in July. Although I'm not expecting to start working until after that date. I'm almost 60, semi-retired, and draw two small pensions in UK.

I had similarities with you though I always had to file both UK and Australian Tax returns because I had incomes in both countries all regardless of where I was living. (Aussie pension, rental income, stocks and a job in the UK, then back in OZ, UK pensions and UK rental income.)

Those two UK pensions may require you to do UK tax returns.

I still have to complete my CGT return which I started last week. It's late but I could not log in for some reason.

[Alan Collett]

2 hours ago, Ken said:

According to his original post he didn't return to Australia until May (several years after moving to the UK) with the sale having completed in April. There doesn't appear to be any reason to believe he was non-resident in the UK when the property was sold. Nor does there appear to be any reason to believe he was resident in Australia so Australian CGT does not come in to play.

Noted - thanks for clarifying, Ken.

Best regards.

[Alan Collett]

On 21/05/2022 at 15:10, imarcq said:

Hi, thanks for your reply. I was fully resident in the UK for 7 years, and was still resident for tax purposes when the property was sold. I haven't yet fully informed HMRC that I've permanently left, just changed my address when I called them to sort out my tax codes on two small pensions. I was given a link by a HMRC "Tax Technician" to do this, but he said there was no immediate rush. Thanks again. Mark.

UK pensions are solely taxable in Australia if received when you are tax resident in Australia, as per Article 17 of the UK-Australia Tax Treaty.

So make sure no tax has been/is being withheld from the UK pensions from the time you became tax resident in Australia again.

A NT (No Tax) PAYE Coding should be in issue in respect of the 2 x UK pensions.

Best regards.

 

[imarcq]

15 hours ago, Alan Collett said:

UK pensions are solely taxable in Australia if received when you are tax resident in Australia, as per Article 17 of the UK-Australia Tax Treaty.

So make sure no tax has been/is being withheld from the UK pensions from the time you became tax resident in Australia again.

A NT (No Tax) PAYE Coding should be in issue in respect of the 2 x UK pensions.

Best regards.

 

Thanks Alan, I've made a note of this. Currently the pensions are so small they don't attract any income tax in UK at all. I'm hoping the same will apply here.