Reluctant Landlords 5
Protect your property from the tax men (5)
The last of a five part series of advice from experts Montfort International plc for home-owning migrants
Tax on the sale of your property
A property which has always been your main residence will qualify for principal residence relief upon sale and will not be subject to UK capital gains tax (CGT). Where an individual has only occupied his property for part of the period of ownership, a proportion of the gain upon sale could be assessable to tax. Note, however that, upon emigration, it is possible to remove yourself outside the scope of UK CGT provided that you are neither resident nor ordinarily resident in the UK for a minimum period. This can provide excellent planning opportunities for individuals who own more than one property in the UK although you will however need to consider Australian CGT.
As previously stated, Australia will tax most residents on their worldwide capital gains. The Australian tax system allows you to claim main residence relief in a similar way to the UK. When a property has not been your main residence for the entire period of ownership, you may only be granted partial exemption.
Fortunately, though, in some instances you can choose to have a property, including your UK property, treated as your main residence for CGT purposes despite not actually living there. Failure to keep your tax affairs up to date can result in penalties and interest on late payments.
If you believe that renting out your UK property may be a viable proposition, seek specialist mortgage and tax advice to ensure you stay on the right side of both the UK and Australian tax offices. Few UK accountants or advisers will be able to advise on the Australian tax situation, so talk free to one that does, Montfort International plc, on 0800 018 3571.
The last of a five part series of advice from experts Montfort International plc for home-owning migrants
Tax on the sale of your property
A property which has always been your main residence will qualify for principal residence relief upon sale and will not be subject to UK capital gains tax (CGT). Where an individual has only occupied his property for part of the period of ownership, a proportion of the gain upon sale could be assessable to tax. Note, however that, upon emigration, it is possible to remove yourself outside the scope of UK CGT provided that you are neither resident nor ordinarily resident in the UK for a minimum period. This can provide excellent planning opportunities for individuals who own more than one property in the UK although you will however need to consider Australian CGT.
As previously stated, Australia will tax most residents on their worldwide capital gains. The Australian tax system allows you to claim main residence relief in a similar way to the UK. When a property has not been your main residence for the entire period of ownership, you may only be granted partial exemption.
Fortunately, though, in some instances you can choose to have a property, including your UK property, treated as your main residence for CGT purposes despite not actually living there. Failure to keep your tax affairs up to date can result in penalties and interest on late payments.
If you believe that renting out your UK property may be a viable proposition, seek specialist mortgage and tax advice to ensure you stay on the right side of both the UK and Australian tax offices. Few UK accountants or advisers will be able to advise on the Australian tax situation, so talk free to one that does, Montfort International plc, on 0800 018 3571.
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