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Taxation Uk to Aus

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Do you get taxed when transferring large sums of money from Oz to UK?

 

It hadn't occurred to me but then I heard that you did.

 

Please, any info greatly appreciated.

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Guest gchapmanswfc

I am doing exactly that entering as an investor, and I am pretty sure you dont. We will get stung enough with the crappy exchange rates never mind an additional tax. You would think a country would want an inflow of new cash, so taxation would be a massive stumbling block to new investment (makes sense to me anyway)

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I would have thought it a fantastic rate if transferring large sums from OZ to UK.

 

Generally speaking if it is personal domestic money it should not be taxable. Eg the proceeds of your home.


I want it all, and I want it now.

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Guest gchapmanswfc
I would have thought it a fantastic rate if transferring large sums from OZ to UK.

 

Generally speaking if it is personal domestic money it should not be taxable. Eg the proceeds of your home.

 

Dont get me wrong, would get a good rate if you transfer a large sum but I was subliminally comparing it to when we first started this process, the rates are now 20% less, hell of a difference when you are sending over big money. Its even dropped 5% since we last visited at the turn of the year..... frightening

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Dont get me wrong, would get a good rate if you transfer a large sum but I was subliminally comparing it to when we first started this process, the rates are now 20% less, hell of a difference when you are sending over big money. Its even dropped 5% since we last visited at the turn of the year..... frightening

 

Are you sure you're not talking about transfering from UK to Oz? Those figures really don't stack up if you're talking about transfering from Oz to UK as per the original post.


Chartered Accountant (England & Wales); Registered Tax Agent & Fellow of The Tax Institute (Australia)

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Guest gchapmanswfc
Are you sure you're not talking about transfering from UK to Oz? Those figures really don't stack up if you're talking about transfering from Oz to UK as per the original post.

 

You are right! UK to Oz! we move over in January!

derrrrrr

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I would have thought it a fantastic rate if transferring large sums from OZ to UK.

 

Generally speaking if it is personal domestic money it should not be taxable. Eg the proceeds of your home.

 

cool :biggrin:

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Do you get taxed when transferring large sums of money from Oz to UK?

 

It hadn't occurred to me but then I heard that you did.

 

Please, any info greatly appreciated.

 

Sorry I don't have any information on transfers from Oz to UK as I've never looked into that. HMRC's view of it would probably depend on how long you had been out of the UK before returning (if that's what is happening).

 

If you are transfering from UK to Oz when emigrating (the one situation I have looked into) then there is no tax to pay on the transfer. You only have to pay tax on income made after you have become tax resident. That could include gains made on house prices (either due to rising house prices or improved FX rates) between the time you became tax resident and the time you brought the money in, but any gains you made before you became tax resident are outside the scope of Australian tax.

 

Of course if you've been resident in Australia for years and then suddenly bring in a lot of money the ATO may think this is money that you've earned and haven't declared while residing in Australia. That would get you a tax bill unless you could prove otherwise.


Chartered Accountant (England & Wales); Registered Tax Agent & Fellow of The Tax Institute (Australia)

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Sorry I don't have any information on transfers from Oz to UK as I've never looked into that. HMRC's view of it would probably depend on how long you had been out of the UK before returning (if that's what is happening).

 

If you are transfering from UK to Oz when emigrating (the one situation I have looked into) then there is no tax to pay on the transfer. You only have to pay tax on income made after you have become tax resident. That could include gains made on house prices (either due to rising house prices or improved FX rates) between the time you became tax resident and the time you brought the money in, but any gains you made before you became tax resident are outside the scope of Australian tax.

 

Of course if you've been resident in Australia for years and then suddenly bring in a lot of money the ATO may think this is money that you've earned and haven't declared while residing in Australia. That would get you a tax bill unless you could prove otherwise.

 

aw jeez it's confusing:err:

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aw jeez it's confusing:err:

 

And I haven't even mentioned the distinction between those on temporary visas (who are only taxed on their Australian income) and those with PR (who are taxed on their worldwide income)......


Chartered Accountant (England & Wales); Registered Tax Agent & Fellow of The Tax Institute (Australia)

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Guest GeorgeD
IGenerally speaking if it is personal domestic money it should not be taxable. Eg the proceeds of your home.

 

 

You don't get taxed on transferring money into Oz (or bringing notes stuffed in a bag either!) You can bring in as much as you want without any tax or fee. That said, once you become an Australian Tax payer, you pay tax on any income made anywhere in the world. Depending on what you do in Oz when you get there, what you do with your house in the UK, and when you sell it, there are some circumstances where you may create a Capital Gains Tax liability in Oz. So you may actually have to pay tax on the proceeds of your home...and believe it or not, it doesn't matter if you never actually bring the money into Australia, you still have to declare it in your Oz tax return!

 

To summarise, you pay Australian tax on money you earn anywhere in the world (salary, interest, investment, capital gain, etc.) You don't pay any Australian tax for moving money around the world either electronically or in cash.

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To summarise, you pay Australian tax on money you earn anywhere in the world (salary, interest, investment, capital gain, etc.)

 

Money you earn includes realised foreign exchange gains too. Something many people (who with FX rates as they are at the moment are leaving their money in the UK) need to be reminded of.


Chartered Accountant (England & Wales); Registered Tax Agent & Fellow of The Tax Institute (Australia)

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That said, once you become an Australian Tax payer, you pay tax on any income made anywhere in the world. Depending on what you do in Oz when you get there, what you do with your house in the UK, and when you sell it, there are some circumstances where you may create a Capital Gains Tax liability in Oz. So you may actually have to pay tax on the proceeds of your home...

 

So it's not a good idea for fist-time permanent residents to enter Oz while the house is on the market abroad? :realmad:

What can I do to not pay Oz taxes on the house sale if I'm already in Oz (working and with a Tax File Number)?

 

What about double taxation treaties between Australia and other countries?

 

I've googled a bit and found this on capital gains tax: "A 'departing resident' provision is also included to give taxpayers the option to pay capital gains tax on certain assets only in their new country of residence."

 

http://www.ato.gov.au/businesses/content.aspx?doc=/content/55425.htm

 

Can anyone explain further?

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So it's not a good idea for fist-time permanent residents to enter Oz while the house is on the market abroad? :realmad:

What can I do to not pay Oz taxes on the house sale if I'm already in Oz (working and with a Tax File Number)?

 

What about double taxation treaties between Australia and other countries?

 

I've googled a bit and found this on capital gains tax: "A 'departing resident' provision is also included to give taxpayers the option to pay capital gains tax on certain assets only in their new country of residence."

 

http://www.ato.gov.au/businesses/content.aspx?doc=/content/55425.htm

 

Can anyone explain further?

 

You'll only be liable for Australian Tax on the gain between becoming an Austalian Tax Resident and selling the house (plus the FX gain/loss) any gains before that date are outside the scope of Australian Tax (unless you've elected to have them taxed in Australia using a measure similar to the Australian departing resident provision).

 

Make sure you have your property professionally valued before leaving the UK and record the FX rate so there can be no later arguments about what the gain (or loss) was. (Sorry just re read you post and realised you're already tax resident so you'll have to find some other way to establish you tax base for CGT).

 

The double taxation treaty means you can offset the tax paid on this gain in the UK against your Australian Tax bill. Obviously you won't have paid any UK tax on the FX gain and if the property was your principal private residence you won't have paid any tax on the gain in house value either so quite possibly you won't have any tax to offset. Remember that double taxation treaties exist to stop you from having to paying tax twice. They don't stop you from having to pay tax once!


Chartered Accountant (England & Wales); Registered Tax Agent & Fellow of The Tax Institute (Australia)

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Make sure you have your property professionally valued before leaving the UK and record the FX rate so there can be no later arguments about what the gain (or loss) was. (Sorry just re read you post and realised you're already tax resident so you'll have to find some other way to establish you tax base for CGT).

 

The double taxation treaty means you can offset the tax paid on this gain in the UK against your Australian Tax bill. Obviously you won't have paid any UK tax on the FX gain and if the property was your principal private residence you won't have paid any tax on the gain in house value either so quite possibly you won't have any tax to offset. Remember that double taxation treaties exist to stop you from having to paying tax twice. They don't stop you from having to pay tax once!

 

Ken your input is much helpful, Australian tax law is kind of a misty subject for me right now.

 

I've not entered Oz as a resident yet, but will do so early next year and I expect the house will not be sold before then ( hence my phrasing). I received the PR grant letter as an offshore applicant recently, does that make me a tax resident already, or do I become one after I get a TFN?

 

Also I found the link below, which wishfully thinking rises my hope, as it states that if the value of the asset is less than A$50,000 one must jump to the following question!

http://www.ato.gov.au/individuals/content.aspx?doc=/content/00217564.htm&pc=001/002/068/002/001&mnu=&mfp=&st=&cy=1

 

My house is probably valued a little less than that figure, btw I'm mexican and the house is quite small :). Does this mean I'm off the hook?

 

Thanks for educating me!

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Ken your input is much helpful, Australian tax law is kind of a misty subject for me right now.

 

I've not entered Oz as a resident yet, but will do so early next year and I expect the house will not be sold before then ( hence my phrasing). I received the PR grant letter as an offshore applicant recently, does that make me a tax resident already, or do I become one after I get a TFN?

 

Also I found the link below, which wishfully thinking rises my hope, as it states that if the value of the asset is less than A$50,000 one must jump to the following question!

http://www.ato.gov.au/individuals/content.aspx?doc=/content/00217564.htm&pc=001/002/068/002/001&mnu=&mfp=&st=&cy=1

 

My house is probably valued a little less than that figure, btw I'm mexican and the house is quite small :). Does this mean I'm off the hook?

 

Thanks for educating me!

 

Having PR doesn't make you a tax resident. It's when you actually move to Australia (which is when you should get your TFN) that you become a resident for tax purposes.

 

I had a quick look at that link. It does appear that if house is worth less than A$50,000 (and remains below that value) then you don't need to do anything - however I haven't moved to Australia yet myself so I can only really be called an expert on the UK tax system not the Australian one.

 

I still think you should consider getting your house properly valued before you leave as it may well be worth more than A$50,000 by the time you come to sell it (could be several years away) and you won't want to then have to pay tax on the entire value. Here in the UK we'd get a written valuation from a Surveyor but I can't tell you how to obtain a valuation in Mexico.


Chartered Accountant (England & Wales); Registered Tax Agent & Fellow of The Tax Institute (Australia)

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Guest GeorgeD
So it's not a good idea for fist-time permanent residents to enter Oz while the house is on the market abroad? :realmad:

 

 

Not necessarily...I'm no expert mind, but if you enter Australia and haven't bought a house in Australia, and aren't earning any rental income in the UK from your house on the market in the UK, then there is no Capital Gains liability (I think!)

 

If you owned a house in the UK, moved to Oz, bought a house, rented out your UK house, then finally sold it, then you may find the situation a littel different. The time it takes you to do these may also change your CGT liability as I believe there is a short overlap period allowed.

 

There are some scenarios where there is no CGT due and some where it is.

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If you are a resident for tax persons which you are, even on a 457, and you transfer money from uk to oz then you are taxed on any interest accrued-is this correct. Do you pay capital gains on any increase in value on home from the day you became tax resident?what about rental income ?

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Guest GeorgeD
If you are a resident for tax persons which you are, even on a 457, and you transfer money from uk to oz then you are taxed on any interest accrued-is this correct.

 

Actually, you need to declare interest earned overseas even if you never bring it into Australia. You are taxed on earnings worldwide. It is earning money which creates a tax liability, not moving it into Australia. The UK and Aus have a reciprocal tax agreement, so you shouldn't be taxed twice on the same earnings, but you do need to declare it.

 

As for Capital Gains tax...I'm not sure. What I do know is that you need to sell your house to be liable for capital gains, just having one which is increasing in value doesn't incur any tax. Having said that...if you owned more than one (One Aus, one UK for example), then that is a different story. When you sell one or other also matters, I think.

 

Rental income needs to be declared as it is income...again, it doesn't matter if it is ever brought into Australia, it needs to be declared...but you shouldn't pay tax on it twice.

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Actually, you need to declare interest earned overseas even if you never bring it into Australia. You are taxed on earnings worldwide. It is earning money which creates a tax liability, not moving it into Australia. The UK and Aus have a reciprocal tax agreement, so you shouldn't be taxed twice on the same earnings, but you do need to declare it.

 

As for Capital Gains tax...I'm not sure. What I do know is that you need to sell your house to be liable for capital gains, just having one which is increasing in value doesn't incur any tax. Having said that...if you owned more than one (One Aus, one UK for example), then that is a different story. When you sell one or other also matters, I think.

 

Rental income needs to be declared as it is income...again, it doesn't matter if it is ever brought into Australia, it needs to be declared...but you shouldn't pay tax on it twice.

 

You're oversimplyfying the meaning of the reciprocal tax agreement by saying you shouldn't be taxed twice on the same earnings. If the tax you would have to pay in Australia is higher than the tax you would have to pay in the UK then you still have to pay the difference in Australia. So if for example you need to pay 30% tax in Australia but have only paid 20% in the UK (I'm oversimplying too) you would still need to pay 10% in Australia you wouldn't be exempt just because you'd already paid some tax.


Chartered Accountant (England & Wales); Registered Tax Agent & Fellow of The Tax Institute (Australia)

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Guest GeorgeD
You're oversimplyfying the meaning of the reciprocal tax agreement by saying you shouldn't be taxed twice on the same earnings. If the tax you would have to pay in Australia is higher than the tax you would have to pay in the UK then you still have to pay the difference in Australia. So if for example you need to pay 30% tax in Australia but have only paid 20% in the UK (I'm oversimplying too) you would still need to pay 10% in Australia you wouldn't be exempt just because you'd already paid some tax.

 

Indeed, that's what I was trying to say, your explanation does help clarify...what I meant was you wouldn't end up paying the 20% and the 30% (total of 50%), but yes, paying a small amount in the UK doesn't mean you avoid a large amount in Australia.

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I still think you should consider getting your house properly valued before you leave as it may well be worth more than A$50,000 by the time you come to sell it (could be several years away) and you won't want to then have to pay tax on the entire value. Here in the UK we'd get a written valuation from a Surveyor but I can't tell you how to obtain a valuation in Mexico.

 

Thanks Ken! I have a professional valuation from a year ago, I'll follow your advice and get a fresh one before I depart. Government registered appraisers can write proper valuations here, btw :biggrin:.

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Hi All, this is a very informative post.

 

I'm currently a PR, and just made my first visit last September, and already gotten TFN ready. But now back to Malaysia to settle my business. And will only be moving to Canberra next year February.

 

We had just gotten 50% business shares sold, and we will be transferring the cash to Oz. Will this amount be taxed?

 

Please enlighten me .. thanks a lot.


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If your resident elsewhere and earned it there then you wont be taxed on it - however residency i believe can be questioned. Make sure your out of the UK a full tax year - April - April no matter when you left to go out to live in Oz

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Guest racemic

Hi, just few questions pls?

I plan to migrate to Oz.

1. Does a UK citizen who emigrates to Oz (for good) need to pay tax in Uk and Oz? If not, is there a time period before I can start working as a full (oz) tax paying resident?

2. If i subsequently buy a property in Oz, will I have to pay worldwide tax on that?

 

currently, bit poor...I have no property, no business, no family in UK...just work and a few thousand in savings. Not started applying for move yet just putting the feelers out.

 

thank you.

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