desreb Posted November 28, 2011 Share Posted November 28, 2011 Thanks James. We're actually heading back for Christmas and have arranged to meet the tenants, so that would be perfect timing. Quote Link to comment Share on other sites More sharing options...
Alan Collett Posted November 28, 2011 Share Posted November 28, 2011 yes CGT will be due as this is no longer your main residence.......you need to get RCIS surveyor to do valuation...as he/she will do comparisions on similar properties...as you are a PR in auz, soon would be adviseable, as HMRC will class it as now any way, so proof its better than they say one figure less than yours and you have the hassle of trying to counter guess them. don't forget to keep all receipts, so they can reduce your gain, all fee's etc. Err ... not necessarily (I think - I can't follow allow of your comments). Deemed periods of exemption from CGT may mean no chargeable gain arises. And not being resident or ordinarily resident in the UK takes the property outside the UK CGT net - subject to the UK's anti avoidance provisions. See the FAQ tax factsheet here: http://www.gmtax.com.au Best regards. Quote Link to comment Share on other sites More sharing options...
mark28 Posted December 11, 2011 Share Posted December 11, 2011 Hi, We have been here for three years now and have been through all of this, we started off renting our primary residence back in the UK and the bought after a year of being here. A few things to note :- Any rental income in the UK should be declared here, many people don't but the ATO are not the inland revenue they probably will catch you at some point ! If you previously had any rental properties etc in the UK and had any carried forward tax losses these will be lost in Australia as they do not accept them even if they were clearly shown in a UK tax return, the ATO is only interested in your tax affairs from the day you arrive as a permanent resident in Australia. In the UK your main residence will not be liable for any CGT for three years and after 5 the UK disregard it and treat you as non resident however Australia technically value the property from the day you become resident. When you buy a property here that starts the CGT clock on your UK property, if you held any buy to lets etc they would have started to be liable to Aussie CGT from day one. If you did or do have any buy to lets if the property falls in value (as was our case unfortunately) from when you become resident to when you sell you can also then claim a CGT loss on your Australian return which you can then use to offset any future gains here. One final thing when doing any transfers of money etc don't use the banks use a currency broker like HIFX or similar as they have much better rates and dealing with them is pretty straight forward. Hope this helps. Quote Link to comment Share on other sites More sharing options...
Danny&Em Posted December 12, 2011 Author Share Posted December 12, 2011 Mark.. Thanks for some more guidance on this.. It helps for sure!! Id say `thanks` but the button has gone... so i `like` it!! Just need to suss out the Landlord part of things now. I`ll have to rent as the market is not moving. I know folk say it worth what someone is willing to pay for it.,., but it kinda doesnt work like that if you cant sell it. And i`m not panic selling just to swap what ever is lef t for a measly rate. Cheers. Quote Link to comment Share on other sites More sharing options...
nicolaj Posted December 12, 2011 Share Posted December 12, 2011 Hi I haven't read all the comments are far too many! We tried to sell our house before moving out but the UK market is just stupid and people just took the P1ss out of us with stupid offers, such as £25k below the asking price!:realmad: Might look stupid but I'm not! We are on 457 visa, hubby transferred with his company to Sydney, so on a good salary and LAFHA as well, so a different situation, so in theory we could well be going back home in 4 years. Our house has now been rented, we managed to get our mortgage on an interest only which halved the repayments. (Yes I know we still have to ensure we can pay the capital off.) We are in the lucky situation as well we own about 50% of our house as well. So the rental covers our mortgage and insurance as well as the agents management fee of 10%. If you do rent you need to contact the HMRC and complete the HMRC non-residents landlord scheme, which means once approved the letting agents don't need to retain the 20% tax (http://www.hmrc.gov.uk/cnr/nr_landlords.htm). If you aren't going to earn enough out of the rent you may not attract the tax in the UK. I have heard on hearsay that if you sell you property in the UK and move the money to Aus, you maybe charged capital gains tax on it, but this will be on the value of the property when you entered Aus? If you have a current mortgage value based on the current values it might work in your favour. Really and truly you need to seek advice from an accountant both here and in Aus. I know we need to see an accountant just to make sure we don't fall foul of any tax out here. Don't know if I have added anything to the other advice, but just sharing my small experience! Quote Link to comment Share on other sites More sharing options...
Alan Collett Posted December 12, 2011 Share Posted December 12, 2011 http://www.gmtax.com.au/2011/12/significant-changes-to-living-away-from-home-allowance/ Unfortunately LAFHA in its present guise is likely to cease to be available from 01/07/2012. Feel able to contact me via a PM or email if you'd like to explore the tax situation. Best regards. Quote Link to comment Share on other sites More sharing options...
nicolaj Posted December 12, 2011 Share Posted December 12, 2011 Thanks Alan, I had spotted this in the news. Only been here a month, but I have been nagging OH to sort out an accountant! If these proposals take place he will need to have a chat to his employers about this point! Quote Link to comment Share on other sites More sharing options...
desreb Posted December 18, 2011 Share Posted December 18, 2011 Mark, I'd also click "like" or "thanks", but iphone Tapatalk provides neither. I'll have to log on via a web browser sometime :-) One expansion on this: can I offset future year capital gains against any loss on the house (eg. Sell house for loss in 2015, make an ASX share profit in 2017, and offset the ATO CGT?). What's the time window? Also.... To anyone; for the purposes of the ATO (not HMRC), did we conclude that a surveyor was advisable, or is an agent valuation sufficient? Thanks!!!! Damian Quote Link to comment Share on other sites More sharing options...
mark28 Posted December 19, 2011 Share Posted December 19, 2011 Hi, Yes you can carry forward the loss indefinately on your aussie return until you have gains to offset. In terms of valuation we just had an agent valuation and a copy of this was given as part of my return which seems to have been accepted no problem. REgards Mark Mark, I'd also click "like" or "thanks", but iphone Tapatalk provides neither. I'll have to log on via a web browser sometime :-) One expansion on this: can I offset future year capital gains against any loss on the house (eg. Sell house for loss in 2015, make an ASX share profit in 2017, and offset the ATO CGT?). What's the time window? Also.... To anyone; for the purposes of the ATO (not HMRC), did we conclude that a surveyor was advisable, or is an agent valuation sufficient? Thanks!!!! Damian Quote Link to comment Share on other sites More sharing options...
desreb Posted December 19, 2011 Share Posted December 19, 2011 Excellent - thanks Mark! Quote Link to comment Share on other sites More sharing options...
desreb Posted December 29, 2011 Share Posted December 29, 2011 Interestingly, I'm just doing some mortgage calculations, and found that even with buy-to-let mortgages, the differences in interest rates are large enough that we could actually increase our UK mortgage, bring the money to Oz with associated fees, put it in a high-interest bank account, and make a net profit. (I actually floated this in another thread to which Andy replied; need to reply in full over there, but thought I'd add the observation here) Quote Link to comment Share on other sites More sharing options...
Alan Collett Posted December 29, 2011 Share Posted December 29, 2011 Hi desreb. Remember that: * A move in exchange rates - ie a strengthening of £ against the A$ - could raise the cost of servicing a UK mortgage in A$ terms, and increase the A$ equivalent of the capital sum borrowed * The interest earned on a savings account will probably be taxable (subject to your personal circumstances) Best regards. Quote Link to comment Share on other sites More sharing options...
desreb Posted January 1, 2012 Share Posted January 1, 2012 Thanks Alan! I did account for the second, but not the first. However, the Herald surveyed 20 economists for a 'What to expect in 2012' piece, and there was a consensus of AU interest rates dropping and possibly the dollar weakening, both of which would scupper this approach, so I'm tending back to the 'pay off the (UK) mortgage' plan! Quote Link to comment Share on other sites More sharing options...
Cam Posted January 1, 2012 Share Posted January 1, 2012 Hi, I haven't read all of the replies, I imagine there's alot of really good advice. We are moving to Oz in February. We are renting our house out as we don't think it's worth selling at the moment, so we're happy to rent and will have a management agent. We did this a couple of years ago for 8 months. We reckon that we should hopefully match the mortgage payments so will at least be paying off our mortgage and therefore increasing our assets. We have just sent in our application to HMRC to register as overseas landlords. Last time we had to complete and australian tax return and a Uk tax return due to the different tax years and when we were resident in each country,it meant that I paid money to australia in September but then had my Uk tax payment decreased the following January. The Australian tax return was way more complicated than the Uk one. From our point of view it makes sense, if we end up selling in a few years hopefully the price will have recovered and also the exchange rate, but also if we decide that Sydney isn't for us for the longterm or the prices remain too high in Sydney at least we're still on the housing ladder. It's a hard decision & njo doubt if you're really clever and financially savvy there are various options, but I just try to keep things simple. We have some friends who have done exactly the same thing, but because property prices are too high in Sydney they have bought an investment property for rental there whilst they continue to rent a property for themselves, hoping they'll make some money on it and at some point will be able to afford a family home for themselves in Sydney. Good luck!! Quote Link to comment Share on other sites More sharing options...
Alaska Posted January 1, 2012 Share Posted January 1, 2012 Wow, there is more to all this than I realised. I haven't heard about registering as "overseas landlords". We have talked to our Mortgage company and Consent to Let should be fine to sort out. We are going on a 457 so I don't know how this affects taxes and the like in Australia. I assume we are no longer regarded as residents in the UK so lose all our tax-free allowance? Quote Link to comment Share on other sites More sharing options...
Cam Posted January 1, 2012 Share Posted January 1, 2012 This is the link: http://www.hmrc.gov.uk/international/nr-landlords.htm If you don't apply for this and have a letting agent (which I would do, as somebody needs to keep an eye on the property, tenants, etc.) then tax will automatically be deducted from your income which is a pain as you would want to be deducting as much as you can as expenses before the tax man takes his chunk. They were really slow at processing ours last time, we submitted it over a month before we left the country and then had to chase them up in Oz, fingers crossed they'll be a bit better this time, but again we've sent it in a month before we're due to leave: 1 month from today!! I think you do get some tax free amount from income as a commonwealth resident, but if you're resident in Oz then it'll be their tax system. You have to tick various things on the form you submit. Give us a shout if it doesn't make any sense. Quote Link to comment Share on other sites More sharing options...
flag of convenience Posted January 2, 2012 Share Posted January 2, 2012 I did not know about the CGT if you end up selling once settled in Oz!? Also interesting to find out the there are tax liabilities on the profit from rent in both UK and Oz. We decided early on (2.5 years ago) that we would be better off selling our house, we have very little savings and i do not like the idea of renting it out when we are so far away, even with the help of a letting agent/family, too much of a headache. We have recently just accepted an offer, after 2.5 years of waiting, from a cash buyer and hopefully in 4-6 weeks we will be out. We don't have our visa yet but hopefully that will come some time in 2012. It is really frustrating how the exchange rate is right now, but i don't see things getting any better in the next 2-3 years. I think the UK housing market is not going to recover for 2-3 years and neither will the exchange rate. Houses in Australia will continue to grow in value and the Australian economy is not going to weaken, so if the UK housing did recover i doubt you will be any better off than you would be selling now. It's a real shame when you look back 10 years and people who emigrated to Oz were a lot better off from selling their UK homes and Australian housing being so much cheaper! Anyway all the best to anyone renting their property, i don't think it is an easy decision either way. It is becoming more the school of thought that Aussie housing will not continue its ever spiral upwards. Days when houses here doubled under a decade are gone. At best inflation covered growth if not a major correction in what is essentially a very over priced market. Aussie dollar due for a correction as well. Question unknown at the moment is at what rate will it settle against the GBP? Could be worth waiting to bring money over in order to benefit from a correction or at least see how it unfolds over coming months. Foreign income will be taxed here in Oz. You are asked to declare houses etc to Tax authorities and there is a treaty between the countries giving information on undisclosed revenue. Quote Link to comment Share on other sites More sharing options...
Alaska Posted January 2, 2012 Share Posted January 2, 2012 So do you pay tax twice on a rental or just in one country? Quote Link to comment Share on other sites More sharing options...
alandeej Posted January 2, 2012 Share Posted January 2, 2012 Thank heavens I never sold our family home in the UK, we were unable to sell due to downturn in the market etc; The house is currently let through a letting agent on a long term let. Now as things are not working out in Oz we are returning to the UK in a few months and looking forward to going home although at the time of leaving I was convinced I would not return to Blighty! Quote Link to comment Share on other sites More sharing options...
flag of convenience Posted January 2, 2012 Share Posted January 2, 2012 So do you pay tax twice on a rental or just in one country? You must declare all foreign imcome to the Australian Tax Office. It all depends on income earned in Australia and tax paid in UK. You will be required to pay the gap. A tax accountant will sort through it easily as it is a very common thing. Quote Link to comment Share on other sites More sharing options...
Alan Collett Posted January 2, 2012 Share Posted January 2, 2012 You must declare all foreign imcome to the Australian Tax Office. It all depends on income earned in Australia and tax paid in UK. You will be required to pay the gap.A tax accountant will sort through it easily as it is a very common thing. Alaska will be living in Australia as the holder of a subclass 457 - ie a temporary residency - visa. This fundamentally changes the tax position in respect of UK source income: http://www.ato.gov.au/individuals/content.aspx?doc=/content/76537.htm See also: http://www.gmtax.com.au/faqs/ Does the type of visa I hold affect my tax position? Temporary resident tax measures were introduced in Australia with effect from 1 July 2006. Individuals who qualify as “temporary residents” are exempt from Australian tax on certain foreign source income and capital gains. If you are a temporary visaholder you should discuss your situation with an experienced tax advisor, as many tax practitioners are not familiar with the various types of Australian visa. Please exercise care when giving advice on tax ... Best regards. Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.