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selling and buying when not a tax resident

Discussion in 'Accounting & Tax' started by James Hill, 4th Sep, 2015.

  1. James Hill

    James Hill Active Member

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    Hi Guys

    I am an expat currently working overseas and also not a resident for tax purposes. I'm renting out the family PPOR and dont own any other properties in the world.

    1.Do those recent crackdowns/rules on foreign buyers also apply to Aussie expat non tax residents who wish to buy whilst still overseas? Or we are fine in buying anything as long as we are Aus citizens for immigration purposes?

    2.If I return to Aus after my "6 yr exemption on main residence" period and thus start to become liable for CGT on the future sale. What is the ideal way to time my return and sale so as I become a resident for tax purposes again to benefit from the 50% CGT discount. Is there a certain min. amount of time I need to be back home before I can say I am a resident again? Or if I have sufficent evidence that I've quit my job overseas, moved all our stuff back and all the family is back is Aus for good, can I just sell it in that year and be pretty safe to be deemed a resident?

    Thanks a lot!
     
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    1. If you are a citizen or permanent resident then no.

    2. come back before the six years and make the property you main residence again.
     
  3. James Hill

    James Hill Active Member

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    Great thanks for the tips
     
  4. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    Be careful with that view. The FIRB rules really need to be read. They discuss a Foreign Person and the definition doesn't consider passport, origin of birth, or domicile. It covers the vague concept of residency. First glance causes some panic. Fortunately s5A of the Foreign Acqu + Takeovers Act extends the rules further and citizenship is also a factor. However some temp persons and people who aren't citizens can be caught even if they are residents for short periods.

    However for CGT purposes while you are non-resident property does not obtain the 50% CGT exemption if its not exempt.
     
  5. James Hill

    James Hill Active Member

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    great thanks for the thoughts
     
  6. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    If you use the 6 year rule it prevails over other CGT rules and renders the period exempt. That may mean the CGT is then 100% exempt and bypasses the loss of the 50% CGT discount. (Exemptions operate before the 50% discount in the flowchart in the Tax Act)

    You would become a tax resident on the day you fly back in many instances.
     
  7. James Hill

    James Hill Active Member

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    Awesome, great to know, thanks a lot for the tips