CGT Discount for Foreign Resident

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(Initiate)Initiate

5 Feb 2024

Hi ATO,

I am an Australian citizen and lived in Australia my entire life until 2020 when I moved to London. I pay tax (1) in the UK on my UK income, and (2) in Australia on my Australian investment income (i.e., non-dom).

I have recently sold some of my investments in Australia which has triggered a CGT event. These assets were purchased after May 2012 (~2015-16).

Am I entitled to a pro-rata CGT discount on these gains for the time I lived in Australia prior to moving to London in 2020?

I am still an Australian citizen.

Best,

Rob

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Cratsky

(Master)Master

6 Feb 2024

Far as I'm aware, the only CGT pro-rata available is the main residence CGT exemption.

For all other CGT assets, there is no change to CGT applied. After the 50% CGT discount is applied (if applicable) and any CGT losses you have available to use, you include any net gain in your Australian tax return.

If there is a double tax agreement between AU and the UK - you should receive a 'foreign tax credit' reflecting the AU tax you've paid which should be reported when you lodge your UK tax return.

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Most helpful reply

Cratsky

(Master)Master

6 Feb 2024

Far as I'm aware, the only CGT pro-rata available is the main residence CGT exemption.

If there is a double tax agreement between AU and the UK - you should receive a 'foreign tax credit' reflecting the AU tax you've paid which should be reported when you lodge your UK tax return.

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RMQ

(Initiate)Initiate

9 Feb 2024

Thanks Cratsky.

I have read a few responses that suggest there could be a pro-rata applied (e.g., https://community.ato.gov.au/s/question/a0J9s0000001CgbEAE/p00025072).

Hoping to get an official response as it's quite material to my 22/23 tax return.

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