Living in the UK
Disposal of Australian Property as non-resident
As a non-resident of Australia for tax purposes, you will be subject to tax in Australia on your Australian sourced income only or capital gains on an arising basis subject to any overriding provisions of the double taxation agreement.
When you sell your Australian property you must report the disposal on your Australian Tax Return in the financial year in which the disposal took place.
The disposal is also reportable on your UK Tax Return, if you are a UK resident, in the tax year in which the disposal took place.
Foreign resident capital gains withholding
Foreign resident capital gains tax withholding applies to disposals of Australian real property with a contract price of AUD $750,000 or more. Where you, the seller, are deemed a non-resident of Australia, the buyer must pay 12.5% of the purchase price to the ATO as a foreign resident capital gains withholding payment. Unless you make a variation claim to the ATO. You can then claim a credit for the foreign resident capital gains withholding payment on your Australian tax return in the financial year of disposal.
We at GM Tax provide fixed fee quotes for all tax returns and advisory work.
If you are leaving Australia or already living in the UK or have recently arrived in the UK – and would like a fixed fee proposal from a firm of UK & Australian tax advisors that understands the issues affecting new arrivals to the UK and individuals leaving and arriving the UK please complete our online enquiry via our home page or by calling a GM Tax office close to you.
Once again tax residency is fundamental to determine who has taxing rights over the Australian business profits.
For Sole Traders and Directors a person’s individual residency can affect the residency of the business.
If you are looking to do business in Australia I would recommend that you obtain professional advice to go through your options.
We at GM Tax provide fixed fee quotes for advisory work and tax returns
If you are looking to do business in Australia or have recently done business with Australia – and would like a fixed fee proposal from a firm of Australian tax advisors that understands the issues affecting expats living and doing business overseas please complete our online enquiry via our home page or by calling a GM Tax office closest to you.
GM Tax also offers the following services:
- Tax planning advice and guidance with regards to your residency status in the UK, eligibility for split year treatment and also domicile status in the context of Inheritance Tax (IHT) planning.
- Preparation of UK and Australian tax returns, with all returns submitted to HMRC or the ATO electronically where possible.
- Advice on the tax position where a property in the UK is being let while a taxpayer is living overseas.
- Assistance to ensure UK source income of those who are non-residents of the UK is properly taxed and is not taxed twice, or double taxed.
- This last point is particularly relevant to those who have UK source income or capital gains which may also be subject to tax in the country in which the taxpayer is now resident.