We have a 495 visa and until yesterday were gearing up to emigrate to Adelaide in 4 weeks time but my buyers house sale has fallen through, so we are now looking at alternatives to make the move happen. My questions are;

1.If I move before my house is sold will the money from that sale become liable to taxation in Australia? would it be seen a earnings from abroad?

2.If I rent my house in the UK and after i have deducted running costs, my profit is above the personal income threshold, what % of tax am I liable for in Australia.

3.When I choose to sell that house is the profit taxable (UK or Aus)?

4.Pension transfer - if I move to Adelaide and delay the decision a year on transfering my pension funds does this increase my tax liability. for some reason i think there is a tome restriction / implication on transfer of funds?

Any help would be welcome but particularly Q1

thanks

Andrew

Hi there:-

Q1 - No it won't

Q2 - If you pay tax on your rental income in the UK then you will be entitled to a tax credit here in OZ. The complication is that the tax credit will only cover the amount which u paid tax - ie the bit in excess of the personal allowance. The personal allowance you will pay tax on here in Oz as you will have to declare all of your 'profit' from your rental. The rate at which you are taxed depends on how much you earn from employment here in Oz. For example if your earnings here were just below a particular tax threshold, and your UK rental earnings took you over that threshold then you would pay tax on your rental earnings at the higher rate. Another thing to consider would be that if your profit in the UK was less than your personal allowance then you would not pay tax in the UK - however you would in Oz as you would have to declare it. Is the property in dual ownership with a wife or partner ?? If so then I think you could split any profit across both tax returns in both countries and pay less tx maybe/

Q3 - No it isn't provided u sell it within 6 years - up to that point it is still considered as a private residence.

Q4 - Yes there is. You have to pay tax on the growth of the super fund between the time you left the UK and the time u transfer it to Oz.

The subclass 495 visa is technically a temporary residency visa, which changes your tax position somewhat once you have moved to Australia.

Have a read here for starters:
http://www.ato.gov.au/individuals/content.asp?doc=/content/76537.htm

Then maybe consider taking some professional advice.

Best regards.