I have been looking at the two tax systems. Advice seems to be to transfer UK funds to Oz. But I cannot see any real long-term advantage assuming equal fund performance and constant exchange rate. They would be taxed equally and any eventual capital gain would be caught (annually if left in UK and on sale if in Oz).

Am I correct in this? Does anybody know?

PS I know that pension funds are the exception.

Alan will correct me but I think the sting in the tail - apart from the sheer complexity of dealing with two tax regimes and paying the highest of each - is the exchange rate.
Australia will actually tax you on the notional gain of an investment because of the exchange rate fluctuations.
If the perceived value of a UK investment goes up because the exchange rate moves against the £ you have made a taxable Aussie gain, and are taxed on it.
The theory is that next year you might make a notional loss, I suppose, but............

Rog Williams

Surely a nil gain at source in GBP would not be taxed?

I think you'll find it is, as the gain must be measured with reference to the A$ equivalent on the date you arrive in Australia (if owned on that date) and the A$ equivalent on the date the investment is sold/transferred/etc.

This from the relevant legislation:

"160K(5) [Amount expressed in foreign currency]

Where an amount of money, or the value of any property, that is to be taken into account for the purposes of this Part as, or as part of:

(a) the cost base to a taxpayer in respect of an asset; or

(b) the consideration in respect of the disposal of an asset;

would, but for this subsection, be an amount in the currency of a foreign country, the amount to be so taken into account is the equivalent amount in Australian currency at the time when the costs were incurred or the time of disposal of the asset, as the case may be."

So, if you own (say) shares in a UK company that are worth £10,000 on the date you arrive in Australia when the exchange rate is £1 = A$2.30, and you sell the shares 2 years later for £10,000 when the exchange rate is 2.50, you would have a gain (before allowing for the 50% discount that would be available) of A$2,000.

Best regards.

quote:

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Originally posted by jim:
Surely a nil gain at source in GBP would not be taxed?

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Alan Collett
alan-at-gomatilda-dot-com
Registered Migration Agent Number 0102534
and a Fellow of the Institute of Chartered Accountants in England and Wales
http://www.gomatilda.com and
http://www.collettandco.co.uk
Offices in Southampton, England; Perth, Australia; and Melbourne, Australia