I’m not a tax expert, but this seems wiered!
I have a friend that want’s to move to NZ permanantly. He has 2 rental properties in OZ. His accountant told him he has to pay CGT on the equity in those properties before he departs Australia even though he does not want to sell them.
Its a way for the ATO to ensure they dont miss out on their CGT!
anyone heared of this before?
I’m sure there are many ways around it, ie not saying that you are going there permanently, but it just struck me as odd that they would ask for such a thing.
and what happens if you pay the upfront CGT and then decide that you want to come back and live in OZ after all, do they give it back?????
We buy properties in Adelaide. Immediate Cash Settlements, No Real Estate Agents, No Fees.
[email protected]
phone 0412 437 582Guide to CGT: ceasing to be a resident
http://www.ato.gov.au/individuals/content.asp?doc=/content/57252.htm&page=11#P612_59893Hellman
If you stop being a resident of Australia (for tax purposes), then you are taken to have disposed of certain assets. I think that land Australia is exempt, but land outside of Australia isn’t. eg.
If you friend owned land in NZ and was a Australian resident, then ceased to be a resident, then the ATO will want CGT paid on the NZ land value on the date the person ceased to be a reisdent.
Terryw
Discover Home Loans
Parramatta
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
If your friend is currently a resident for tax purposes and the assets are held in Australia then ceasing residency for tax purposes will not crystallise CGT.
The link that hellman provided should be printed out, given to your friend and they should provide this to their accountant.
It clearly states “If you stop being an Australian resident for tax purposes, you are taken to have disposed of assets THAT DONT HAVE A NECESSARY CONNECTION WITH AUSTRALIA for their market value on the day you stopped being a resident.”
Im beginning to wonder how some of these accountants havent been sued for professional negligence. The appalling advice I have seen lately disgusts me.
Once again Terry seems to know more than the average accountant. Isnt that a sad reflection on the profession when a mortgage broker knows more than a persons accountant (no offense intended Terry.) You ever thought of changing from mortgage broking to accounting. We need more competent accountants.
thanks guys, I actually sent the link to him by email.
Now that makes more sense!!! The way it was described by his accountant was confusing. Your right coasty, some accountants just dont know their own profession!!!!!
We buy properties in Adelaide. Immediate Cash Settlements, No Real Estate Agents, No Fees.
[email protected]
phone 0412 437 582
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