Hi,
I have a question relating to exit tax and foreign shares.
I'm an Australian citizen, but am currently a foreign resident for tax purposes. I hold international shares in my portfolio. I plan to return to Australia for a while for carer duties, but only for up to a year at most.
If I'm understanding correctly, I'd be deemed an Australian tax resident once I return. So my international share holdings would be deemed acquired on the date of arrival (at share price X), and when I leave, it'll be a deemed disposal on my date of departure (at share price Y).
So any capital gain/loss would be the difference in cost basis of X and Y, is that correct?
If there was a capital gain during this time, does my share cost basis also get re-adjusted? And am I able to prove this to the tax authorities abroad with some certified document from ATO, or via some double tax agreement?
If there was a capital loss, am I able to report this in my tax return and have that rolled over in case in the future I incur Australian CGT?
thanks!
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1 replies
Author: JodieR_ATO(Community Support)Community Support 3 June 2022
Hi @DeanT123,
I'll respond to your questions as you've asked them-
Yes, you're correct. Acquisition date is from when you become an Australian resident for tax purposes, usually arrival date. Then your deemed to of disposed of them when you depart Australia and return OS.
So any capital gain/loss would be the difference in cost basis of X and Y, is that correct?
Yes, you're spot on :)
Working out your capital gain or loss is for reporting purposes in Australia. Your market value is what you use to determine CGT here. When you return OS it would be up to the country you live in and their CGT rules. If you returned to Australia in a few years and still owned the shares, the market value when you re-enter Australia will be used at that time.
If there was a capital loss, am I able to report this in my tax return and have that rolled over in case in the future I incur Australian CGT?
You can enter a capital loss as an Australian resident. Capital losses can be carried forward. However they can only be offset against a capital gain.
