Guest Nom&Nat Posted January 17, 2007 Share Posted January 17, 2007 Hello folks Please can you help us as we are possibly planning on selling our rental property to fund a new home in Oz and as its not our main domicile I think we may be hammered by the dreaded tax man? Does anyone know the exact figure on this? Or would it be better to hang on to the place and keep renting out for a few years.......? I hate decisions.......arrgghhhhhh Sometimes I think we should just sell the lot and go for it...... Many thanks Nom n Nat Link to comment Share on other sites More sharing options...
Guest nev_n_angie Posted January 17, 2007 Share Posted January 17, 2007 Hi Do you have another property that you live in? Are you selling this too?? Capital Gains is based on the amount you sell minus the amount you paid for it. It is also based on individual tax allowances in UK. If you're working, then you will pay 40% tax on this difference if it was not your primary residence in the last 3 years. You will only pay 40% tax if you are already earning above the threasholds in you own PAYE. I hope this makes sense?? Angie Link to comment Share on other sites More sharing options...
Guest Nom&Nat Posted January 17, 2007 Share Posted January 17, 2007 Thanks for the quick reply guys! Yes I live in another property. A small flat. I just hate the idea of giving back a big chunk of my profits for the last few years investment! Could I avoid this by living in it for a few years? If yes - do you know how long? I see you have a relation in Brisbane....does he enjoy it there and how long has he lived in Oz? I bet you are looking forward to your move, eh?# Thanks again Nom n Nat Link to comment Share on other sites More sharing options...
Guest gail.crease Posted January 18, 2007 Share Posted January 18, 2007 Hi Nom and Nat You both will get a capital gains allowance of £8,800 each so offset £17,600 from your profit before you calculate the tax. The rates you'll pay depending on how much you earn is on this link from inland revenue: http://www.hmrc.gov.uk/rates/cgt.htm If you end up having to pay a lot of tax then wait until the start of the next financial year (after 5 April) after you leave for Oz to sell it and rent over there for a while. This way you can offset your personal allowance against the profit and pay lower tax rates. Of course once you're resident in Australia you will be subject to capital gains tax on your worldwide income and will have to pay tax there. However I don't know of any way that they will find out if you don't. Their tax system is similar to ours and it's up to you to declare it on your self assessment. At the moment inland revenue do not let you include capital gains on your online self assessments so request a paper form from them before you leave to complete when you're in Oz. Hope this helps. My fee in the post Good luck Gail Link to comment Share on other sites More sharing options...
immy21 Posted January 23, 2007 Share Posted January 23, 2007 I have 3 rented flats that my accountant tells me if I hold onto for two years after entering oz I will then not pay ANY capital gains tax on their sale. Speak to an accountant or buy a tax guide Link to comment Share on other sites More sharing options...
Guest mikandjoolz Posted January 25, 2007 Share Posted January 25, 2007 Best advice - get a good accountant. It may cost a few hundred but they can save you thousands. CGT is a very complex issue as I found when I sold a second house recently. I thought I would be paying tens of thousands in CGT but ended up thanks to my accountants knowledge paying just a few thousand. Link to comment Share on other sites More sharing options...
Alan Collett Posted January 29, 2007 Share Posted January 29, 2007 If you are no longer resident or ordinarily resident in the UK you are not subject to capital gains tax on the disposal of an asset, so long as the disposal occurs in a UK tax year in which you are NEVER resident or o/r in the UK, and so long as you do not return to the UK within 5 complete tax years of your departure. HM Revenue booklet IR20 confirms this (search at http://www.hmrc.gov.uk). If you are tax resident in Australia at the time of the disposal you then need to consider your liability to CGT in Australia ... If you are interested there are also some free tax factsheets here: http://www.collettandco.com/factsheet.cfm Best regards. Link to comment Share on other sites More sharing options...
Guest BullCreek_Bob Posted January 30, 2007 Share Posted January 30, 2007 I have 3 rented flats that my accountant tells me if I hold onto for two years after entering oz I will then not pay ANY capital gains tax on their sale.Speak to an accountant or buy a tax guide G'day As Alan said, you can do it in such a way that you wont pay UK Capital Gains Tax, however if you are living in Aust on permanent residence or citizenship, then the capital gain is taxed here. The tax will be determined by the sale price, less the purchase price, plus or minus any currency gains/losses as a result of changes in the exchange rates in that time then divided by two and tax assesses at your marginal rate (probably 45%) on that. So as a general guide expect to pay tax of about a quarter of the gain from when you arrived in Aust to the time of sale. Don't forget, that while you're here the rent from the UK properties is considered to be part of your taxable income here but you can also claim as a tax deduction any interest you pay on your mortgages in the UK. Link to comment Share on other sites More sharing options...
Alan Collett Posted January 30, 2007 Share Posted January 30, 2007 A quick note to clarify Bob's posting: Australian CGT on the disposal of assets owned at the time of becoming a tax resident of Australia is computed with reference to the market value of the asset on the date you become a tax resident. not the original cost of the asset. This means that capital gains (and losses) arising before you commence Australian tax residency are disregarded by the Australian Tax Office. All this is assuming the enquirer/s is/are not "temporary tax residents" of Australia, as that can remove the charge to CGT in Australia as well ... Best regards. Link to comment Share on other sites More sharing options...
Guest BullCreek_Bob Posted February 1, 2007 Share Posted February 1, 2007 G'day Thanks Alan, I must have been half asleep at the time of posting because you're right my post was not the clearest . However I did say if you are living in Aust on permanent residence or citizenship, then the capital gain is taxed here. and then So as a general guide expect to pay tax of about a quarter of the gain from when you arrived in Aust to the time of sale. Am I forgiven Link to comment Share on other sites More sharing options...
Alan Collett Posted February 1, 2007 Share Posted February 1, 2007 Of course you are Bob! :lol: :lol: Link to comment Share on other sites More sharing options...
andromeda9 Posted July 13, 2014 Share Posted July 13, 2014 Been reading about capital gains seems forever. Then poms appeared with Alan Now going to chill out need a break be back tomorrow looking for advise. Whoo hooooo Link to comment Share on other sites More sharing options...
noworriesmate Posted July 13, 2014 Share Posted July 13, 2014 This thread is seven years old, you may need to check that information is still correct,in the meantime I'm going to close this thread. NWM Link to comment Share on other sites More sharing options...
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