kensden wrote:
> My wife and I have been married for twenty years. Throughout that period
> we have always owned our home, six in total, never more than one at a
> time, each one directly preceding the other. We've never had any
> investment property.
>
> Last summer we sold our house in Falkirk and bought another in
> Edinburgh. During this time, I was offered a four year contract in
> Sydney. I was sponsored by a company and applied for a 457 Long-term
> Temporary Business Visa. These visas are designed help Australian
> employer's gain access to skilled foreign workers, on a temporary
> residence basis. My wife and I left for Australia in order that I
> could take up the contract on 10 June 2005. Our house sale and
> subsequent purchase took place on 15 July 2005, after we had left the
> UK. Our new home in Edinburgh became our principal UK residence our
> sixth home over a twenty year period; we had every intention of
> returning to this house in 2009.
>
> However things change, in December last year, an opportunity to become
> Australian permanent residents arose and we grasped it and were granted
> permanent residence (through my wife) on 5 June 2006, having completed
> almost a year as a temporary resident.
>
> The Australian Tax Office will not apply their capital gains criteria to
> the eventual sale of our home (we must sell it within six years) in
> Edinburgh as long as it was our principal UK residence. However because
> our sale/purchase took place after we had left for Australia, albeit we
> were only temporary foreign workers at the time, there is some dubiety
> as to whether or not the ATO would accept that our Edinburgh home is our
> principal residence. If they don't, then the value of the property on
> the day it was purchased becomes the base price and whenever we sell the
> Edinburgh house the ATO will claim 47 cents in the dollar on whatever
> profit we make.
>
> Surely this cannot be fair?
>
> Does anyone have any experience of such a set of circumstances?
>
> --
The exemption for CGT is not for "principal UK residence", its for
"principal place of residence". Its not stated in your post, but when
did you reside there & when did you cease residing there? (Or did you
never reside there and have your principle residence in Australia the
whole time?).
The ATO website is quite explicit: "A mere intention to construct or
occupy a dwelling as your main residence - without actually doing so
- is not sufficient to obtain the exemption."
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