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lyndalelodge

UK Capital Gains Taxable in Oz

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I wonder if anyone can help with a fairly technical tax query:

 

I'm likely to be leaving the UK before 6th April 2011 and possibly arriving in Australia sometime in June after touring around Europe, etc.

 

After leaving the UK, I may decide to sell some assets and realise some capital gains and will do this before arriving in Australia. Assuming I remain non-resident in the UK for the next 5 years, then broadly speaking these gains will be non-taxable in the UK.

 

However, if I arrive in Oz before 30th June 2011, I believe I will resident for tax purposes for 10/11 and as such, I wonder if my capital gains will then become taxable in Oz, which wouldn't be particularly clever!!:confused:

 

Any comments and advice would be much appreciated.

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I wonder if anyone can help with a fairly technical tax query:

 

I'm likely to be leaving the UK before 6th April 2011 and possibly arriving in Australia sometime in June after touring around Europe, etc.

 

After leaving the UK, I may decide to sell some assets and realise some capital gains and will do this before arriving in Australia. Assuming I remain non-resident in the UK for the next 5 years, then broadly speaking these gains will be non-taxable in the UK.

 

However, if I arrive in Oz before 30th June 2011, I believe I will resident for tax purposes for 10/11 and as such, I wonder if my capital gains will then become taxable in Oz, which wouldn't be particularly clever!!:confused:

 

Any comments and advice would be much appreciated.

 

 

Hi Lynda

 

Although I'm a chartered accountant, its a long time since I studied tax, not my strong point, but....

 

Really hard to answer questions like this as everyone's circumstances are different! However, as a rule of thumb, you will be liable for tax on income and capital gains in Australia under Aus tax rules on income and gains from anywhere in the world. With certain countries you get a credit for any tax you pay in that country. Luckily the UK is one of those countries.

 

I'm not sure that you will avoid CGT in the UK just because you leave. In your 11/12 UK tax return, would you not have to declare the gains?? At that point you won;t have been away from the UK for 5 years so how is the tax man going to know that you intend to be away for that period??

 

OK, now I'm confused! I think you need to see an expert in UK and Aus tax - generally the bigger firms have such people (Grant Thornton, PKF, etc). Depending on how much your gain would be, it may be worth paying a couple of hundred pounds for some (proper) advice!!

 

Cheers

 

Ken

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Thanks Ken, I might do that.

 

I'm hoping not to do an 11/12 tax return on the basis that I'll have left the UK by 5th April 2011 and therefore be non-resident for 11/12.

 

If we don't leave until after 5th April 2011, then agreed, I'll be resident for the whole of 11/12 and the gains will be taxable in the UK.

 

Cheers.

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