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Australian Capital Gains Tax
Todd Said:When I bought my 2 properties,in 2002 & 2005 I was considered an overseas invester even though I am Australian
We Answered:Yes you wil be paying tax. The capital gains regime is quite complex, it generally treats profit (from property) in a more concessional manner although ultimately the Capital gain is treated as income in the tax return.
There are numerous CGT rules/conditions that need to be considered - including the possible CGT mpact of changing residency not to mention consideration of the tax treaty with Britian to see how any Aus paid taxes would be treated in England. Really all of thise things need to be considered if you are to make the most appropriate tax effective decision.
I suggest that you visit the ATO website www.ato.gov.au for more information on both capital gains and the treaties. They used to have a capital gains calculator on the site which may be of use to you in determing the CGT effect depending on your personal circumstances.
Christina Said:What is the tax implications with CFD trading? If I make a capital loss, do i offset it against capital gain?
We Answered:The implications will depend on a number of factual matters, namely, whether the trades are on ‘capital’ account or ‘revenue’ account and whether the trader is an individual or a company. For simplicity, I will assume you are an Australian resident individual.
This is a topic in itself, but if you are a frequent trader (think speculative plays on short term price movements), the trading gains and losses that you make will be on ‘revenue’ account. If the trading is infrequent (think long-term investment type purchases), gains/losses are likely to be capital.
If you have revenue losses, you may generally use those losses to offset ANY of your other income (including trading gains and even your salary).
If you have capital losses, you may ONLY use those to offset your capital gains.
If the total assessable income generated by your trading is less than $20,000 in an income year you will be subject to non-commercial business losses rules and will not be able to use those losses.
The amounts you receive from holding CFDs aren’t dividends for tax purposes, but rather an item of ordinary income. You need to pay tax on this at your marginal rate. Also, you are not entitled to any franking credits, as what you receive is not a true dividend.
Hope that helps.
Rick Said:Do I have to pay capital gains tax if.......?
We Answered:depends on your domicile ie do you intend on living in the UK forever and giving up your australian domicile or you are only in the UK temporarily and intend to return to Australia. i recommend u conatct a tax advisor .
Fernando Said:My parents want to give me 270,000 to buy a house. Do I have to pay tax on it under Australian tax laws?
We Answered:As long as you were given cash you would be ok. If your parents decided to buy the house and give it to you then your parents may be facing capital gains issues depending on their circumstances.
If you wanted the cash to be treated as a loan you would need some form of documentation in place. Maybe have a loan agreement that both parties sign which states you will pay back a set amount of money every week/month (e.g $300 per week/ $1000 per month etc). If you did have this documentation in place you would have to continue making payments as per the agreement for the money to be treated as a fair-dinkum loan i.e. you can't make the first three payments and then forget about it.
Delores Said:Do I pay capital gains on sale of main home in UK now I am an Australian citizen?
We Answered:Whether you are a citizen or not, is actually not relevant for income tax purposes. The question that is relevant is, whether you are an Australian resident for income tax purposes.
Let's assume you became an Australian resident for tax purposes when you first arrived here. Let's assume that was 2 years ago. For CGT purposes, you are taken to acquire that house in UK 2 years ago at its market value then. Therefore when you sell it now, you will be assessable on the gain from 2 years ago until now.
I doubt you can rely on the Main Residence exemption for that 2 year period. Not fully anyway.
When a taxpayer is changing a main residence, yes, he/she can have a period of 6 month to have 2 main residences (buying one and trying to sell the other).
Generally, you can only have 1 main residence at all time. If you live and reside in Australia, you can't possibly live in UK as well....
Hope the above helps
(Note - I know nothing about the UK law and I know nothing about the Double Tax Agreement between the two countries - so hopefully someone else can add more on these)