Hi all

When someone migrates to Australia, I believe there is a set time by which they must import capital if they wish to take it to Oz free of tax.

I've read 6 months, 12 months and 24 months. I don't know which it might be.

My elderly Mum is about to migrate. We have realised that trying to sell her house in the UK and rearranging her financial affairs straightaway is proving too much for her emotionally. She needs to go back to Oz and get used to her new status as a welcomed Permanent Resident instead of a not-quite-pukka "tourist." She is not yet ready to make the break from the home she shared with my late father, whom she adored.

Ideally, therefore, we want to defer doing anything about her capital (principally her house) until mid-2007.

Would we fall into an almighty tax-trap if we do what is best for Mum emotionally?

Thanks

Gill

G'day Gill

There is no time limit as such. Importing capital is NOT taxed.

What is taxed is any interest earned on capital or any capital gains. This income or capital gain is taxable once your mother becomes a resident of Australia for tax purposes. This "usually" happens once people arrive here as a permanent resident or on some working visas.

Having assets or capital in other countries (like the UK) is not against the rules, indeed I still have assets in the UK. But when doing annual tax returns here, remember to include any income earned (rent on a house?). One area that some people often overlook is the capital gain (or loss) as a result of currency fluctuations. These normally only need to be determined when a CGT event (such as selling) occurs.

If you want to no more, just drop me a PM or give me a call next week when I will be back in the UK - I'll send you my mobile no if you want.

Take care

Bob Johnson
Mortgage Broker

Hi Bob

Very many thanks for your help. I'm having a bit of a problem imagining capital gains on currency exchanges. Since the rate varies every day, how can you determine where the base-line is for calculating a capital gain or loss? I suspect there is something about currency exchange that I don't know about here.

Apart from this though, I understand the rest of your advice, thanks very much.

At the moment, Mum's visa is expected any day now. The Bond has been lodged and the 2nd VAC paid to DIMA. The CO says that she will grant the visa as soon as she gets the official OK from Centrelink about the AoS.

For the moment, we want to focus on getting the visa, getting it evidenced and then deciding with Mum when she would like to travel to Australia. She's in the middle of a Grand Tour of the Rellies at present and is not champing at the bit to return to Oz, so it might be that she won't want to fly to Perth till November sometime.

I want to get Mum settled into her new life/status in Perth, now that we know (thanks to you) that we can safely defer selling her house. I'll give you a shout in the New Year if I may, since I'm planning a visit to Perth in Feb/March, to discover the best way to invest the proceeds of sale of Mum's UK house once the money has been moved to Australia. Since my sister lives in Jandakot, it should be reasonably easy to arrange a meeting with you then, if this would be OK with you?

Meanwhile, enjoy your trip to the UK.

Cheers and thanks

Gill