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drewster(Initiate)Initiate
4 Sept 2023

A property was acquired in 2009 and rented out.

All rental incomes and expenses were declared annually in the tax payers ITR

In 2016 tax payer relocated for work purposes overseas and ceased to be an Australian tax resident until their return to Australia in 2022.

Throughout the period of none Australian tax residency the tax payer paid income tax on salary and wages and property income in the country of tax residency

The tax payer disposed of the overseas investment property following their return to Australia in 2022


Is CGT Gain / Loss for Australian tax purposes simply continue to be based on the value at acquisition in 2009 compared with value at disposal in 2022 or are there other mandatory CGT events and valuations which should to be taken into account.



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252 views
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TobyJDodd(Devotee)Registered Tax Professional
7 Sept 2023

Hi Drewster,


I assume the property is in Australia?


As Real Australian Property, the taxpayer had the option when they became a non-resident of either.


A) Triggering a CGT event and paying calculating the CGT payable based on the market value at the time they became a non-resident or


B) Electing to continue to treat the property as Australian Property. This means the profit each year remained taxable in Australia and should have been paid in Australia (Subject to any applicable double taxation treaty)


If B is chosen the CGT event does not occur until the disposal.


Toby

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Most helpful reply

TobyJDodd(Devotee)Registered Tax Professional
7 Sept 2023

Hi Drewster,


I assume the property is in Australia?


As Real Australian Property, the taxpayer had the option when they became a non-resident of either.


A) Triggering a CGT event and paying calculating the CGT payable based on the market value at the time they became a non-resident or


B) Electing to continue to treat the property as Australian Property. This means the profit each year remained taxable in Australia and should have been paid in Australia (Subject to any applicable double taxation treaty)


If B is chosen the CGT event does not occur until the disposal.


Toby

AriATO(Community Support)Community Support
8 Sept 2023

Hi @drewster


If the property was overseas, what @TobyJDodd is saying about CGT applies. Have a look at how changing residency affects CGT. If the property was treated as Australian taxable property meaning the taxpayer disregarded any gains/losses when their residency changed then they'd use the value when they bought the property.

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