Hi
I've recently sent off my stage 2 assesment to IEA and am going for a ASCO 3125-11 visa with my brother who's lived in oz for 16years as my sponsor and have been receiving some great help from Lorraine and Shaun.
I just wondered if anyone could please give me some advice, i have a property here in the UK that ive had rented out every since i did my years working visa in oz 2.5yrs ago, all's going well with my tennants and i see it now as an investment for my pension fund for when i retire, i feel i'm young enough at 28 to get a mortgage in oz when my visa gets granted and still keep my house in the UK. But do you reckon this will cause any problems later in life? Has anybody thats emigrated kept their UK property? All advise welcome.
Thanks

I guess the two draw backs will be you will be taxed in the UK on any income you generate on the property, you might have to complete a tax return every year and if you do sell it you will be hit for capital gains tax as you aren't selling it as a home. I think the capital gains is calculated from the value of the house when you last lived in it against the value when you eventually sell.....that could be quite a large amount of money ...Im sure others know more...

Matt

If your UK profit income from your investment is less than the personal allowance then you won't pay tax in the UK. If it is more then you will have to pay in the UK. However ALSO you have to declare all WORLD WIDE income in Australia. Dependent on your income you may well end up paying more tax in Oz, although you you will be given a tax credit in Oz for any tax you pay in the UK.

Hypothetically you might end up paying NO tax in the UK (ie profit less than 5000 pounds) but have to delcare an income of $12,500 in Oz. Dependent on your Oz income then you might end up paying 47% tax on that money as it might be the income that pushes you into that tax band !! Guess you need to do your sums and decide if it is worth it !!

We are selling our house in the UK as it is too much hassle chasing agents, paying for repairs & declaring tax in Oz. Also if we do it not we can keep the profit and not have to pay CGT.

The property you own in the UK will have to be valued on the day you arrive in Australia. As you are deemed to have "purchased" this property on date of arrival. When you decide to sell that property, you will be subject to Capital Gains Tax (CGT) in Australia (as an Australian resident you are taxed on your worldwide income). You will be taxed on the increase in value from when you arrived in Aus to the value when you sold. How much tax you pay will depend on how much your other earnings are in Aus.

Depending on how many properties you own you could get an excemption from the CGT due in Aus. This would need more formal advice.

The rental income will have to be declared on both a UK tax return and an Austrlian tax return.

Do you own more than one property in the UK? If so you could be looking at UK CGT also.

Please send me a PM if you want more info on this.

Thanks

Shell

There's no CGT payable in the UK if you are not resident or ordinarily resident in the UK at any point in the tax year in which the property is sold - so long as you don't return to the UK within 5 complete tax years of departure.

Inheritance Tax in the UK is also a factor.

Best regards.

quote:

Originally posted by Neil & Shell:
The property you own in the UK will have to be valued on the day you arrive in Australia. As you are deemed to have "purchased" this property on date of arrival. When you decide to sell that property, you will be subject to Capital Gains Tax (CGT) in Australia (as an Australian resident you are taxed on your worldwide income). You will be taxed on the increase in value from when you arrived in Aus to the value when you sold. How much tax you pay will depend on how much your other earnings are in Aus.

Depending on how many properties you own you could get an excemption from the CGT due in Aus. This would need more formal advice.

The rental income will have to be declared on both a UK tax return and an Austrlian tax return.

Do you own more than one property in the UK? If so you could be looking at UK CGT also.

Please send me a PM if you want more info on this.

Thanks

Shell

See also the free factsheets at the Collett & Co website.

Best regards.

The thing that would bother me is the maintenance of the property. Lets say the tenant phones your agent and says a tap washer needs replacing. If I was living in the area, I would do it myself for fifty pence. Otherwise, the agent phones a plumber who charges a hundred quid just to turn up and the agent adds on 20% etc. There's not much you can do about it and that's only a minor issue. Looking at the property market in WA, i would think that the capital growth prospects are just as good as in the UK at the moment, so why not invest in a second property there, or maybe two given the price difference. At least then you could keep an eye on things and not have the double tax issues to worry about. If you had to sell the Uk property while you were in OZ, you would be putting your trust in someone else to do the right thing. I did just that (the other way round) about 25 years ago and I still wonder if i was stitched up.

Thanks to everyone for their advice on this matter, looks like when my visa gets granted then i'll be selling the house in the UK and buying one over there.
hey would i still qualify for the 1st time buyers grant over in oz as it would be the 1st time i buy a house there? or does the grant just apply to the 1st property you've purchased worldwide.
sorry shell im new to this so have no idea how to send a PM.
thanks again.

The First Home Owner's Grant is available to you when you buy your first home in Australia - see here:
http://www.firsthome.gov.au/

Note also that there may be a FHOG available from the State or Territory Government as well as the Federal Government version.

Best regards.