Hi everyone, I am looking for some advice. A few years ago I acquired a foreign property while I was working overseas. I resided in that property from 2013 to 2017. I'm back in Australia now and plan to dispose the property. I know CGT is exempt as I haven't acquired another PPOR in Australia or anywhere else. Once I sell the property I plan to transfer the money back in one lump sum. I suspect ATO is going to want to know where that money came from and whether they are owed any tax on it. My question is how I should declare this information to the ATO. Do I let them know as soon as I do the transfer? Is it something I put in my tax return? Or do I wait for ATO to inquire about it and then explain? Thanks.
TD 95/7 Income tax: capital gains: does subsection 855-45(3) of the Income Tax Assessment Act 1997 prevent a taxpayer from making a choice that section 118-145 of that Act apply to an overseas dwelling that the taxpayer owned before becoming a resident of Australia? https://www.ato.gov.au/law/view/document?docid=TXD/TD957/NAT/ATO/00001
Hi Terry, thanks for your replies. I'm an Aussie working overseas so I'm pretty sure CGT is exempt. If I don't do anything I'm 99% sure ATO will inquire about it. Was thinking whether it's easier if I contact them first.
You could be audited. But what have you got to fear? You are guilty until you prove you are innocent, but you can do that can't you?
An exempt gain is reported as a choice at Item 18 in the return after it is sold. Likely $0 taxable. Its also possible that there could be a CGT loss !! (Think of the AUD value change) and NOT claiming the exemption may be wise. The most common way the issue is detected is with datamatching by Austrack when the $$$ come back. That not illegal and you may be asked to explain. Proceeds from the sale will be supported by paperwork. Easy.