Alan Collett Posted February 9, 2011 Share Posted February 9, 2011 Foreign exchange (forex): foreign currency denominated bank accounts Plus a Private Ruling to be going on with: Private Ruling Number 66456 Best regards. Quote Link to comment Share on other sites More sharing options...
KandM Posted February 9, 2011 Share Posted February 9, 2011 Hi K&M In 2 years of reading PiO and BEP and any other site with links to Oz tax law this is the first time I have read that a private individual will pay tax on a currency gain, (apart from lots of 'I believe/think' you pay tax type posts). Was your paid for guidance in the UK or a Tax official from Oz? Time and time again I have asked for anyone to give an example of a Pom who has paid tax on a currency gain (or claimed a tax loss) and have not had one taker. I would love to see the evidence of the tax in question, maybe your guide gave you a link that we could examine? Hi Les, Yes it was UK Accountants that clarified the tax position to me, and they certainly charged enough for the privilege. It is my understanding that the currency Gain/Loss is part of the capital Gain or Loss that you make when you convert it to the A$ as shown in my example of the money in savings (£450K) in the UK which you are required to report annually to the ATO for your Australian tax return, and this is declared in A$ not pounds thus you will always have a currency variation of some sort. Steve (SANDCH) made the following comment which is also my understanding: I believe the currency gain would be an element of the capital gain on realisation and thus form part of assessable income in Australia. The cost base would be the value at the time you became resident I think, converted at the then exchange rate. The ATO is probably not interested in anything other than the Australian Dollar result of a capital gain event - thus currency movements form part of the gain or loss. There are allowances in the form of discounts available for captal gains tax in Oz. Alan Collett's from Go Maltilda references are as far as I understand it are also confirming the same thing. Of course if you bring out all your assets when you move to Australia or within a defined period it will not apply. Of course the next subject on finances that needs to be discussed is the dreaded QROPS. The moving of your UK SIPPS fund to a HMRC approved Australian Qualifying Pension Fund. I have done some research but this could turn out to be an expensive process if you are not careful. Quote Link to comment Share on other sites More sharing options...
Les Avalook Posted February 9, 2011 Share Posted February 9, 2011 Foreign exchange (forex): foreign currency denominated bank accounts Plus a Private Ruling to be going on with: Private Ruling Number 66456 Best regards. First I would like to say thank you Alan for your help on all the threads you post on, you appear to have the patience of a saint. Your first link is headed under 'Businesses' and most of us will be transferring as individuals. On your second link I do not see how that fits the case of a UK resident selling their main residence, for say £250,000 then banking that money in the UK, declaring any interest to Oz (where they have become resident) and then at later date bringing that money over to Oz. They have not speculated on the exchange rate, they have just done a (possible) single transfer. I just ask the question, where is an example of a individual Pom being charged tax on the currency difference? There must be some CPVs who have done this and been resident in Oz for a few Oz tax years now, what happened???? Regards Les (non tax expert) Quote Link to comment Share on other sites More sharing options...
Alan Collett Posted February 9, 2011 Share Posted February 9, 2011 http://www.pomsinoz.com/forum/985469-post1365.html Just a quick refresher to an earlier post ... Best regards. Quote Link to comment Share on other sites More sharing options...
fiz Posted February 9, 2011 Share Posted February 9, 2011 First I would like to say thank you Alan for your help on all the threads you post on, you appear to have the patience of a saint. Your first link is headed under 'Businesses' and most of us will be transferring as individuals. On your second link I do not see how that fits the case of a UK resident selling their main residence, for say £250,000 then banking that money in the UK, declaring any interest to Oz (where they have become resident) and then at later date bringing that money over to Oz. They have not speculated on the exchange rate, they have just done a (possible) single transfer. I just ask the question, where is an example of a individual Pom being charged tax on the currency difference? There must be some CPVs who have done this and been resident in Oz for a few Oz tax years now, what happened???? Regards Les (non tax expert) So does Alan's last reply mean that as we are "private or domestic" that we are exempt from this capital gains tax? Too many long words...... Quote Link to comment Share on other sites More sharing options...
PhoebeW Posted February 9, 2011 Share Posted February 9, 2011 So does Alan's last reply mean that as we are "private or domestic" that we are exempt from this capital gains tax? Too many long words...... For me too. I understand money/figures etc but when it comes to this 'tax thingy' :swoon: Phoebe Quote Link to comment Share on other sites More sharing options...
Guest Posted February 9, 2011 Share Posted February 9, 2011 Hi all, so this is where you've all been hiding, it's so nice to see all the familiar names again, I've really missed the comparisions on m... ite & v............ ite By the way I have a case officer after just 15 months, soooooooooo excited Katie Quote Link to comment Share on other sites More sharing options...
sandch Posted February 9, 2011 Share Posted February 9, 2011 So does Alan's last reply mean that as we are "private or domestic" that we are exempt from this capital gains tax? Too many long words...... Ah taxation. Don't you just love it? It really refers to the asset (in the context of these posts, your main residence). Other assets such as shares, do not carry the same exemption unfortunately. Quote Link to comment Share on other sites More sharing options...
sandch Posted February 9, 2011 Share Posted February 9, 2011 Hi all, so this is where you've all been hiding, it's so nice to see all the familiar names again, I've really missed the comparisions on m... ite & v............ ite By the way I have a case officer after just 15 months, soooooooooo excited Katie Hello and welcome! I think the convention would be v****ite; to reflect its quality whereas "Marmite" is perfectly acceptable. Well done with the CO. Bets wishes Steve Quote Link to comment Share on other sites More sharing options...
sandch Posted February 9, 2011 Share Posted February 9, 2011 Hi K&M In 2 years of reading PiO and BEP and any other site with links to Oz tax law this is the first time I have read that a private individual will pay tax on a currency gain, (apart from lots of 'I believe/think' you pay tax type posts). Was your paid for guidance in the UK or a Tax official from Oz? Time and time again I have asked for anyone to give an example of a Pom who has paid tax on a currency gain (or claimed a tax loss) and have not had one taker. I would love to see the evidence of the tax in question, maybe your guide gave you a link that we could examine? Hi Les It's not much of a population to draw from this, a small number of people who have not quite got visas and then a very much smaller number who stick around afterwards for long enough and who have had any experience of that particular issue. So it's best to be aware of the tax law, but also of the possibilities of private rulings which seem to remove areas of doubt - and possibly unfairness - for the taxpayer and the ATO. Also, we've only really been discussing the "main residence" for which there is a specific exemption in the legislation. Some people will have other assets for which no such exemption exists, and these face different challenges. I do agree that the type of currency gain that we are discussing (that is, we did not acquire the asset with the intention of making a A$ currency gain, and any "gain" is really entirely fictitious when based on a completely random date of becoming tax resident) should not be a tax event. But as it is enshrined in law, we start off on the back foot. All of course, my humble opinion. Cheers Steve Quote Link to comment Share on other sites More sharing options...
PhoebeW Posted February 9, 2011 Share Posted February 9, 2011 Hi all, so this is where you've all been hiding, it's so nice to see all the familiar names again, I've really missed the comparisions on m... ite & v............ ite By the way I have a case officer after just 15 months, soooooooooo excited Katie WOW......well done :biggrin: Phoebe Quote Link to comment Share on other sites More sharing options...
PhoebeW Posted February 9, 2011 Share Posted February 9, 2011 Hi Les It's not much of a population to draw from this, a small number of people who have not quite got visas and then a very much smaller number who stick around afterwards for long enough and who have had any experience of that particular issue. So it's best to be aware of the tax law, but also of the possibilities of private rulings which seem to remove areas of doubt - and possibly unfairness - for the taxpayer and the ATO. Also, we've only really been discussing the "main residence" for which there is a specific exemption in the legislation. Some people will have other assets for which no such exemption exists, and these face different challenges. I do agree that the type of currency gain that we are discussing (that is, we did not acquire the asset with the intention of making a A$ currency gain, and any "gain" is really entirely fictitious when based on a completely random date of becoming tax resident) should not be a tax event. But as it is enshrined in law, we start off on the back foot. All of course, my humble opinion. Cheers Steve Am I understanding this right....... If/when we sell our house & the Ozzie government has had their share it dosent leave us a great deal :swoon: We intend to rent for 6-12 months to give us time to have a good look around before we settle so can we can put that into a 'pot' for when we feel we can buy the right place without the nasty tax man getting his hands on it :wideeyed: and do we keep it in a UK bank or an Oz bank :wacko: Phoebe Quote Link to comment Share on other sites More sharing options...
sandch Posted February 9, 2011 Share Posted February 9, 2011 Am I understanding this right....... If/when we sell our house & the Ozzie government has had their share it dosent leave us a great deal :swoon: We intend to rent for 6-12 months to give us time to have a good look around before we settle so can we can put that into a 'pot' for when we feel we can buy the right place without the nasty tax man getting his hands on it :wideeyed: and do we keep it in a UK bank or an Oz bank :wacko: Phoebe You need to review Alan's posts Phoebe dealing with the issue of the main residence. No-one can recommend where you deposit your money because it's based on your personal circumstances. Without the crystal ball, we're all in the same position of having to guess where exchange rates are headed, and make a judgement accordingly. I bring over just what I need at the moment, because I expect the rate to improve - but it's only an educated guess; it could go the other way if the UK economy doesn't get going quickly. If you are resident in Australia, do bear in mind that you are taxed on your worldwide income, so interest paid by banks in the UK will be included (not that it is much) including ISAs. You should get a credit however for any tax charged by HMRC under the double taxation agreement. And remember, apart from Alan, we're not tax professionals - they cost money for good reason, the studying and exams are sheer torture. Best wishes Steve Quote Link to comment Share on other sites More sharing options...
panman Posted February 10, 2011 Share Posted February 10, 2011 Blimey!!! not been on here for a while but the tax issue is a massive mine field!!! We at the moment are sat waiting for our 103 to reach the top of the LONG list. Been on the list since Sep 07 only 6000+ to go Hmm. But we are living over in OZ for 7/8 months of there summer and going back to UK for UK summer. I have a bank account, car and my own cabin on the southern peninsular, so we have somewhere we can call home in OZ. But horrified that I might be taxed on any money I make when I sell my house in UK and who decides how much you have made???? Very confusing. Quote Link to comment Share on other sites More sharing options...
Guest sirmatt101 Posted February 10, 2011 Share Posted February 10, 2011 Hi all, so this is where you've all been hiding, it's so nice to see all the familiar names again, I've really missed the comparisions on m... ite & v............ ite By the way I have a case officer after just 15 months, soooooooooo excited Katie Hi Katie, wonderful news not long to go now. All the best Matt Quote Link to comment Share on other sites More sharing options...
Guest mombie58@hotmail.com Posted February 10, 2011 Share Posted February 10, 2011 Hi all, so this is where you've all been hiding, it's so nice to see all the familiar names again, I've really missed the comparisions on m... ite & v............ ite By the way I have a case officer after just 15 months, soooooooooo excited Katie Hi Katie and congrats on getting a CO - all the best to you. audie Quote Link to comment Share on other sites More sharing options...
Alan Collett Posted February 10, 2011 Share Posted February 10, 2011 Blimey!!! not been on here for a while but the tax issue is a massive mine field!!! <snip> But horrified that I might be taxed on any money I make when I sell my house in UK and who decides how much you have made???? Very confusing. That's why tax accountants are in business ... :-)) Best regards. Quote Link to comment Share on other sites More sharing options...
Les Avalook Posted February 10, 2011 Share Posted February 10, 2011 That's why tax accountants are in business ... :-)) Best regards. :hug: Quote Link to comment Share on other sites More sharing options...
Linday Posted February 10, 2011 Share Posted February 10, 2011 Thanks everyone for their input on the tax thingy. I seem to have started a lively discussion with my question. I think the answer is - nothing is simple and there is so much to think about re the move over to Oz! Quote Link to comment Share on other sites More sharing options...
PhoebeW Posted February 10, 2011 Share Posted February 10, 2011 Thanks everyone for their input on the tax thingy. I seem to have started a lively discussion with my question. I think the answer is - nothing is simple and there is so much to think about re the move over to Oz! You certainly opened a can of worms :jiggy: Phoebe Quote Link to comment Share on other sites More sharing options...
Guest Posted February 12, 2011 Share Posted February 12, 2011 There is an Emigrate Show at Lord's Cricket Ground on Sat/Sun next. Is there any point in us going or is this just for young people looking for jobs/sponsorship etc. Would there be finance advice/removals etc. Can anyone advise..thank you Maxine Quote Link to comment Share on other sites More sharing options...
Guest Posted February 12, 2011 Share Posted February 12, 2011 Another point..and I am sorry if this is an old one.....I have heard that when you get your English pension the exchange rate at that time is set for all time. So if you are unlucky enough to get your pension when the exchange rate is very low then it stays at that rate regardless if the rate goes up....Is that true? Quote Link to comment Share on other sites More sharing options...
Les Avalook Posted February 12, 2011 Share Posted February 12, 2011 There is an Emigrate Show at Lord's Cricket Ground on Sat/Sun next. Is there any point in us going or is this just for young people looking for jobs/sponsorship etc. Would there be finance advice/removals etc. Can anyone advise..thank you Maxine One of these types of shows in London helped our son and d-i-l make up their mind to give Oz a try, we went with them, but they did not really find out anything they did not already know, just lots of leaflets and business cards (and spam). I would suggest save your money (unless the show is free and on your doorstep) and spend the time looking at threads of interest on the web, but then I am a tight sod. :wink: Quote Link to comment Share on other sites More sharing options...
Les Avalook Posted February 12, 2011 Share Posted February 12, 2011 Another point..and I am sorry if this is an old one.....I have heard that when you get your English pension the exchange rate at that time is set for all time. So if you are unlucky enough to get your pension when the exchange rate is very low then it stays at that rate regardless if the rate goes up....Is that true? Not true. Just scroll back a few pages and you will find details there. :biggrin: Quote Link to comment Share on other sites More sharing options...
PhoebeW Posted February 12, 2011 Share Posted February 12, 2011 Not true.Just scroll back a few pages and you will find details there. :biggrin: Hubby said that to me yesterday, why do I get the feeling the 'box' has been at work again :chatterbox: As I understand it it's the amount you get on the UK that freezes at that amount and that's bed enough when we have worked all our lives :swoon: Phoebe Quote Link to comment Share on other sites More sharing options...
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