GM Tax

Living in the UK
Disposal of Australian Property as non-resident

When you sell your UK property you must report the disposal on your Australian Tax Return in the financial year in which the disposal took place.

You must also report the disposal in the UK via a CGT return and on your annual UK return.

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.

Regardless of whether you transfer your sale proceeds to Australia or retain in a UK bank account for future use you still report the disposal to the ATO.
  • For Australian tax purposes you are taken to have acquired your UK Property at the market value as at the date of your Australian tax residency, which is generally your date of arrival.
  • The capital gain is computed with reference to the proceeds in A$ less the A$ equivalent of the market valuation at the date of tax residency.
  • If you have obtained a depreciation report and claimed Capital works deductions in your tax returns against rental income, then these deductions which have already obtained tax relief will need to be added back to the base cost of the property and may lead to an increased capital gain.
  • If the property was held for greater than 12 months from the date of acquisition, or the date you commenced residency in Australia, whichever is later then the gain can be discounted by one-half if the property (50%).
  • Depending on when the property was purchased you may be eligible to claim holding costs for the period of time after you cease renting out the property up until the date of sale.
  • When you sell or otherwise dispose of a dwelling that was your ‘main residence’ (your home), you can treat the property as being deemed to be your main residence for a period of up to 6 years from which the property was income producing, on the basis that no other main residence has been acquired.
  • Where a main residence is vacated and not rented out (and no other main residence election is made in respect of another property), the property will maintain its exemption status indefinitely– and therefore exempt from CGT in Australia.

We at GM Tax provide fixed fee quotes for all tax returns.

If you are moving to Australia or already living in Australia 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 Australia 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.

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 tax returns, with all returns submitted to HM Revenue 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.