Hello,
I would love some advice and guidance about my situation:I am originally from the UK and purchased my home there in October 1997 for 82,950k pounds. This was my only property and PPOR until 2007 when I moved to Brisbane to work for a year.
I had planned to sell the home, had it valued at 285k pounds, and marketed it, and had a buyer. Unfortunately, they pulled out late in the day, leaving me little time to repeat the process and so decided to rent the house instead.
Tenants moved in in December 2007, and the house has been let from that date until June 2015.
After being in Australia for a year and loving it here, we decided to stay on (457 visa) and then applied for permanent residency which was granted on 30 July 2010 (subclass 856 employer nomination scheme).
From December 2007 until January 2011 we rented a unit, then purchased our home here, where we have resided ever since.
The UK property has been empty since June 2015, and marketed for sale. It has just been sold (subject to contract) for 282,500K pounds.
My query is as follows:
As the property was valued prior to being let, and the sale price achieved is less than this valuation, this appears to be a capital loss, not a gain. My assumption then, is that no disclosure is required to the ATO on my tax return. Is that correct?Thankyou in advance.
Hi Geraldine,
I had left this question alone, since it involves overseas property – but, in the absence of any other answers, I thought I’d let you know that I believe you are correct (based on the evidence you provided). Certainly, that is how it would work in Australia – if you make no gain, then there is nothing to add to your Income Tax to be Taxed on.
But, it could go deeper than that, so I do hope someone on here who really KNOWS can step in and help….
What I am thinking is that, a loss is able to offset any future Gains – and your loss would likely be way more than $2,500 – as Selling costs, solicitor’s cost, etc all come into play. So, it could be that you have a loss more like $20k that can do some good for you in offsetting some other gains.
It needs an adviser (accountant?) to affirm just how all of this works – I am not sure of the mechanics of such,
Benny
Thankyou Benny – great to hear your opinion. I agree – I think I need to seek expert accounting advice from a specialist, but if somebody with a similar situation to mine happens to read this on here, it would be great to hear your experience.
It’s never fun to lose money in an investment, but declaring a capital loss on your tax return can be an effective consolation prize in many cases
yugabharathi
http://www.grandpremedia.com/
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