GM Tax

Living in the UK
Disposal of Australian Property

As a tax resident of the UK you are subject to income & capital gains tax on your worldwide assets.

When you sell your Australian residential property you must report the disposal of your UK Tax Return.

Regardless of whether you transfer your sale proceeds to the UK or retain the funds in an Australian bank account for future use you still report the disposal to HMRC.

However, should you qualify you may be able to claim the remittance basis and reduce the tax payable.

  • For UK tax purposes the cost base will be computed with reference to the value of the property on the date you acquired it.
  • There is an exemption from UK CGT where a property has been occupied as a main residence, and the last 9 months of ownership are also exempt from CGT.
  • Certain other periods of absence from your property up to 4 years may be treated as periods of residence if both before and after the period there’s a time when the dwelling house is your only or main residence, or if you are not able to return to the property as your employer required you to continue to work away from home.
  • You compute the capital gain over the whole period of ownership and pro rata the total gain into an exempt period in respect of main residence and a chargeable period.
  • Capital expenses incurred can be used to reduce the cost base and CGT liability.
  • If the property was your former home, the property would be eligible for Private residence relief.
  • The final period relief will also be available i.e. the last 9 months of ownership will be eligible for relief and classed as being your home regardless of whether you lived in it during that time.
  • You may have only one main residence (PPR) for tax purposes at any time. Where you have more than one residence, there is a choice to nominate any one to be treated as your main residence, but the last 9 months may be claimed on multiple properties provided you have lived in the property at some point.
  • You are eligible for the annual CGT exemption of £12,300 in 2021/2022 meaning that the gain over and above this amount would be liable to tax at 18% (or 28% if you have other UK income making you a higher rate tax payer).

We at GM Tax can assist with the completion of UK CGT and annual UK tax returns. We 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.