Capital gains tax

[Paulined]

Hi has anyone who lives in Oz but sold a house in UK. I Paid small amount of tax in UK, bringing money to Australia do I then pay capital gains tax in Australia? Citizen of Australia ex UK . Getting mixed answers

[Marisawright]

Was it an investment property?  If so, you treat it exactly like you would treat an investment property in Australia.  So you'll have to declare it on your tax return.   I hope you've been declaring the rental income while it was rented out, too!   

It can be a complicated process to work out what CGT has to be paid so you'd be best to get a tax agent to help you.  

[Paulined]

Thank you yes we have declared the rental income. I do have an accountant but to be honest he did not seem to be confident what he was telling me. Cheers

 

[Marisawright]

20 minutes ago, Paulined said:

Thank you yes we have declared the rental income. I do have an accountant but to be honest he did not seem to be confident what he was telling me.

If the accountant's usual clients are only in the UK or only in Australia, it's very unlikely they're familiar with both tax systems. 

As it's an investment property, you'll just declare it exactly as you would declare the sale of an Australian investment property, but you'll also declare the tax you paid in the UK.  

https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax/calculating-your-cgt

[Peach]

UK taxman get's first bite of the cherry, needs to be assessed under the UK rules for CGT first. I believe that anything you pay the UK taxman will be deducted from any resulting amount the ATO decide they would like (to avoid being double taxed).

you have quite a short window to tell HMRC about the disposal: https://www.gov.uk/report-and-pay-your-capital-gains-tax/if-you-sold-a-property-in-the-uk-on-or-after-6-april-2020

[Paulined]

Thank you 

 

[Alan Collett]

17 hours ago, Peach said:

UK taxman get's first bite of the cherry, needs to be assessed under the UK rules for CGT first. I believe that anything you pay the UK taxman will be deducted from any resulting amount the ATO decide they would like (to avoid being double taxed).

you have quite a short window to tell HMRC about the disposal: https://www.gov.uk/report-and-pay-your-capital-gains-tax/if-you-sold-a-property-in-the-uk-on-or-after-6-april-2020

CGT discount of up to 50% available when computing the capital gain in Australia.

If you claim the 50% CGT discount you can only claim 50% of the UK tax paid as a Foreign Income Tax Offset on your Aus tax return.

Best regards.

[Ken]

On 08/04/2024 at 15:02, Paulined said:

Thank you yes we have declared the rental income. I do have an accountant but to be honest he did not seem to be confident what he was telling me. Cheers

 

Did you live in the property at any point? You can still claim the main residence exemption for up to 6 years after you ceased to live there. You can only claim the main residence on one property at a time though, so it depends upon what other properties you own.