My wife and I have been married for twenty years. Throughout that period we have always owned our home, six in total, never more than one at a time, each one directly preceding the other. Never had any investment property.

Last summer we sold our house in Falkirk and bought another in Edinburgh. During this period, I was offered a four year contract in Sydney. I was sponsored by a company and applied for a 457 Long-term Temporary Business Visa. I believe these visas are designed help Australian employer’s gain access to skilled foreign workers, on a temporary residence basis. My wife and I left for Australia in order that I could take up the contract on 10 June 2005. Our house sale and subsequent purchase took place on 15 July 2005, after we had left the UK. Our new home in Edinburgh became our principal UK residence our sixth home over a twenty year period; we had every intention of returning to this house in 2009.

However things change, in December last year, an opportunity to become Australian permanent residents arose and we grasp it and were granted permanent residence (through my wife) on 5 June 2006, having completed almost a year as a temporary resident.

The Australian Tax Office will not apply their capital gains criteria to the eventual sale of our home (we must sell it within six years) in Edinburgh as long as it was our principal UK residence. However because our sale/purchase took place after we had left for Australia, albeit we were only temporary foreign workers at the time, there is some dubiety as to whether or not the ATO would accept that our Edinburgh home as our principal residence. If they don’t, then the value of the property on the day it was purchased becomes the base price and whenever we sell the Edinburgh house the ATO will claim 47cents in the dollar on whatever profit we make.

Surely this cannot be fair?

Does anyone have any experience of such a set of circumstances?

Comments and thoughts as follows:

- There's no point considering "fairness" in taxation. What's unfair to you might be more than reasonable to someone else.

- Your circumstances are fairly unusual, so I suggest you should be taking some professional advice for which a fee would be payable.

- I would only say here that for Australia's 6 year exemption to be available my understanding is that the residence in question must have been occupied prior to it being income generating, but need not be reoccupied prior to it being sold.

- If there is a material amount of tax at stake I recommend that you don't base the completion of Tax Returns and the making of decisions on comments appearing on discussion forums.

Best regards.

Alan,

Can you recommend some who can give me that professional advice (and how much it may cost me) from both the UK Inland Revenue and AU Tax Office perspective?
My UK home is my only real asset, I worked hard to own it, the prospect of sharing any profit with either Govt. does not appeal!

Can do - can you send me an email so I can send you details of how I might advise?

Best regards.

Can I call you? Kenny

I'm in Melbourne most of the time - it may be best if you can mail me your telephone number and I'll call you.

Best regards.

if i sell my home in the uk and take the money with me when i migrate to oz am i liable for tax then in oz it is my only house and would be using the money from the sale to set up home in oz

Andy