CGT and emigrating to Oz

macmomo

Sudden panic, we're a bit naive.

Our house is on the market, we are moving to Australia. My husband becomes an Australian tax payer on 12 Novemer 2013 which is the day we fly to Sydney; I will be living in Australia but must remain a UK citizen and paid by the UK govt until 1 June 2014 (I am using various saved up leave entitlements). We are not liable to CGT on the sale on our house in the UK if we are here.

But - if we sell after leaving the UK when at least one of us is an Australian tax payer then what happens about the CGT?

Any advice welcome, we've had an offer on the house but (and it's a silly offer). We need to know how much we will lose in tax if we reject this offer and sell after leaving, presumably with a higher sale price.

Thanks!

agrinnall

I'm not aware of anything that would change CGT liability whether you are resident in the UK or not, unless the sale takes several years to go through. I think as long as the house was your main residence then you have up to 3 years before CGT starts to come into play.

macmomo

ok - so then I need to understand whether the australian govt will want to tax it as overseas earnings I suppose?

Savvy_Sue

macmomo wrote: »

ok - so then I need to understand whether the australian govt will want to tax it as overseas earnings I suppose?

Which is not something we're very well placed to advise on, look for an Australian expat site to begin with, or find their equivalent of HMRC and ask them. You may find it worth paying for expert advice.

JasonPr

macmomo wrote: »

ok - so then I need to understand whether the australian govt will want to tax it as overseas earnings I suppose?

I definitely agree that you should look at expat forums.

However, it seems unlikely to me that you'll have to pay tax in Australia.

The tax situation depends on your visa. If you have a temporary work visa for Australia, foreign income will not be taxed (with some exceptions, such as foreign employment income).

If you move to Australia on a permanent visa, the value of your house on the date you became a permanent resident will be used to calculate Australian capital gains. If you sell soon after moving there, there shouldn't be any/many gains.

At least this is my understanding but I'm not an expert with Australian taxation.