Dear all,
I am currently living in London and am thinking about buying an investment property here. Can anyone explain the CGT rules (briefly) on overseas property sales, when and if, it happens? that is , after I move back to Australia.Thanks[
]Hi Diana,
What do you mean by “overseas property sales”? Are you talking about your property in the UK, or are you talking about a property you might buy in Australia?
Cheers
MI meant if you are in Australia and sell the property overseas ie England!
I suspect that if you are an Australian tax resident when you sell your UK property, you may indeed be up for some tax.
I’m not too sure about how it all works, unfortunately. Perhaps someone else on this forum would know.
At the end of the day, if you’re talking about a lot of money in potential CGT, you should probably consult a good Australian tax accountant. It’ll be worth the several hundred dollars or thousand plus bucks that you have to pay, if it means the difference between you having to pay tens of thousands of dollars in CGT or not.
I don’t know if there’s any CGT equivalent in the UK – you should also check that out with a UK accountant.
I think the simple answer is that if there’s no UK CGT, then you should sell your UK property before you become an Australian tax resident. It seems to boil down to a question of timing everything perfectly. As to exactly when you become an Australian tax resident, whether any of my assumptions above are correct, or how you need to time each step in the whole process, you should spend the money on the 2 accountants, because I’m not one.
I’ve got a good accountant whom I use in Perth – if you want his details, just send me an e-mail.
Cheers
MHi. You might like to have a look at http://www.inlandrevenue.gov.uk and follow the links to Capital Gains. Unless the property is used as your only home, you will most likely incur capital gains in the UK payable to the UK authorities. The website is quite helpful as a starting point but the laws are quite complex, as different scales of relief are available. I remember having to study loads of rules as part of my UK accountancy qualification, made for a lot of late night cramming!
Not sure what happens when you return to Australia, but many countries have negotiated tax treaties between themselves. This means if you incur CGT in one country, you don’t then get fully taxed in the second country on the taxed monies repatriated from the first. Suggest you seek specialist Tax/Accountancy advice in the UK.[
] Good luck.Vicki
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