I purchased an apartment (property A) overseas in 2003, I lived in that property until I moved to Australia to study in 2006 and later become a permanent resident in 2010. Between. I have been living in Australia since 2006 and based on my understanding that I have been an tax resident since then.
In 2015, I purchased my first home(property B) in Australia with my partner and has been living in this home since then.
Property A has not been rented out or used to produce any income since I moved out.
I am considering selling property A in the current financial year, and would like to bring the proceeds from the sale to Australia.
I have done some research and i want to check if my understandings(listed below) are correct
If I end up selling property A:
- Because I have been an AU tax resident since 2006, I will need to report this as an CGT even the capital gain should be reported for the gain between 2006 up to the time of sale.
- I think I can choose to use the main residence exemption for oversea home(property A) given it was my home and it has not been used to generate income since I moved to Australia. (I did find TD95/7 which I think should apply in my circumstances and want confirm that it will)
- The implication of my choice of using the main residence exemption will be that I will not able to use the exemption in my current home(property B) on the gain in value for the period between 2015 and the time I sold property A but can apply exemption on the value gained after the sale of property A If we sell the property in the future.
Also I have the following questions:
- How should I report the sale of the property A for Capital Gain as part of my tax return and how to indicate that I am using the main residence exemption for that capital gain. What sort of documents on the sale of property A I should keep in case I got audited in the future?
- Due to very strict foreign currency controls imposed by the government where property A is in, I might need to move the funds in quite a few separate transactions across a few years. Will this raise any issue with ATO?
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