Australian Tax on Forex gains and Migrating to Oz

meatandtwoveg

Hi,

If you intended to migrate to Australia, and you had a substantial lump sum to exchange from British pounds to Australian dollars, so you would want the best exchange rate?

How does forex gains work with regards to moving to Australia, but waiting for the exchange rate to improve while you are a permanent tax resident in Australia. So you leave your cash in a UK savings account, while waiting for the exchange rate to improve. You are paying tax on the interest earned to the Australian tax man, as you have submitted a R105 form in the UK and recieve interest gross in the UK without tax deducted.

The scenario, how much truth is in this passage below?

If you transferred the money before you arrived in Oz or on the day you arrived in Oz (to stay permanently), then there are no tax implications in Oz.

If you transferred the money after arrival then the following example applies? Or does it?

If you had £100,000 and it was worth $240,000 on the day you arrived, then if it was worth $250,000 on the day you trasferred it at a later date, you will be liable to pay tax on $10,000 at your marginal rate to the Australian tax man.


Also, why will only some institutions accept the form R105, and pay your tax at the Gross rate without tax deducted in the UK. Even though you are no longer a tax resident? If they will not accept the form R105 what should you do, as you will have to pay tax in the country where you are a tax resident on income earned from savings.


Thank you for any help!


The reason why i ask is, if you did intend to move to Oz, you sold your house in the UK, and was living in the UK in rented accommodation and for arguments sake, you had a nice round figure of a quarter of a million pounds sterling in the bank.

You could leave this in the bank in the UK when you moved to Oz, earn the interest gross (Form R105), withdraw the interest in Oz, and pay tax to the Oz authorities on the earnt interest as it is income when you had moved to Oz. So this income could cover your rent in Oz, also then when the exchange rate improved in your favour you could then change it from pounds to the Oz dollar?

But how does this OZ TAX FOREX GAIN LAW implicate you or does it?

Cook_County

You are asking an Australian tax question. This is a UK website so you would do better to ask in the other country.

The UK would charge such gains to CGT. I do not know what Australia would do, but I expect that these would be chargeable there.

tony4563

You would be better off asking OzForex their advice. I'm hoping to emigrate to Brisbane next year but still waiting for visa confirmation. Good Luck All The Same

meatandtwoveg

tony4563 wrote: »

You would be better off asking OzForex their advice. I'm hoping to emigrate to Brisbane next year but still waiting for visa confirmation. Good Luck All The Same

From what i can gather the rules/laws are open to interpretation, i mean, say your cash was tied up in a house or a fixed investment bond, or you was unable to exchange at time of gaining permanent residence for a number of reasons?

Been trying to find documentation on this law, very difficult!

viking30

Overseas income is or was, classed as tax free from an income tax point. I used to live in Aus but work overseas as well as in Aus. I was never taxed on overseas income including savings interest.
Best thing would be to contact an Aus tax agent and see what they have to say. I used to use H & R Block. http://www.hrblock.com.au/
Maybe a mail to them will answer your question as its been a while since i was there.