[nickbraddock]

Hi,
I will be selling my house to move to NZ, I will have a lump sum (hopefully enough to buy a house with in NZ) when I sell my house here in the UK, someboby told me that I would have to pay tax to take the money out of the UK AND when I take it into NZ!
Can anyone assist me with the answer to this and if so, what sort of percentage do they take etc??

Thanks
NJB

[Moorf]

I would have thought that, since most are taking money with them to NZ from sales of UK houses that this would, if true, have reared its ugly head sooner.

I can't see what reason they would have for taxing the money.... hope I am proved wrong.

[bbq]

Moorf

I am not 100% sure on this,but I think it really only applies if you don't sell your house in England as you go to NZ. So for example if you left your house in the UK for 4 years before selling it

In this case I think you would be liable to NZ Capital Gains Tax on the increase in value of you house on going to NZ and the date of selling it.

e.g Value on leaving UK £100,000 - Value when sold say 4 years later £150,000. NZ capital Gains tax on £50,000. Not sure what the rate is

As you have sold your house already it doesn't apply :D As it was your main residence in the uk on selling, UK capital Gains tax is NOT required either :D

Maybe someone better informed can say if this is right or wrong?

cheers

alex

[Moorf]

I had read that NZ has no Capital Gains Tax.... ?

[bbq]

Hi again Moorf

There is Capital Gains tax in NZ - whether it applies is another thing.

read this article (its down the page a bit!)

http://www.nzherald.co.nz/money/moneystorydisplay.cfm?storyID=3514680&thesection=m oney&thesubsection=taxation&thesecondsubsection=

But I still think it won't apply to you, and I dont think there is another type of tax they'd charge you on arrival in NZ on your money you take with you.

cheers

alex

[Moorf]

Ah, I see now... but isn't it only if you buy and sell after your move ? Hmmm

This was on the ENZ FAQ

Capital Gains Tax
New Zealand has no tax on capital gains. If, however, you buy and sell shares or property frequently, gains will be taxed as income.

[bbq]

[quote="Moorf"]Ah, I see now... but isn't it only if you buy and sell after your move ? Hmmm

quote]

yes, I am certain it will only apply if you sell after you move.

I hope so for you anyway :hopeso

cheers

alex

[Moorf]

Hmm not quite that simple for us. I own the flat we live in here on Worthing seafront!! We sold our main residence in Scotland earlier this year and moved in to this place. Was thinking that I might get away with paying Cap Gains on this place whilst in NZ - I've rented it out for over 10 yrs and it has been a second residence for over 7 yrs. Therefore, had we sold here I would have to pay 40% Cap Gains.... !!!!!!!

But, if what you say is true, as we are renting this place out whilst in NZ, when I came to sell I would still have to pay CGT! Bummer!

[bbq]

Hi Moorf

SOrry I got you mixed up as the original poster who has sold/will be selling.

sorry to say, but I think you are right. I even heard from one source (no idea where now) that even if you lived in a place for 20 years then left it for more than 5 in the UK, it would be liablefor CGT on the increase in value over its whole life. There is some calculation to reduce it, but......

I hope its not too painful a take for you

alex

[Douglas]

As the ENZ FAQ says, NZ has no capital gains tax. As a tax resident of New Zealand you will be able to sell a rental property in the UK without incurring CTG in New Zealand.

[bbq]

As the ENZ FAQ says, NZ has no capital gains tax. As a tax resident of New Zealand you will be able to sell a rental property in the UK without incurring CTG in New Zealand.

Douglas

I hate to contradict anyone, especially when I don't know for sure myself, but I was quoting from an article in the NZ Herald

"That's the story for income. When it comes to capital gains - the profit you make by selling an investment for more than it cost - the average Kiwi thinks there is no such thing as a capital gains tax in this country. But there most definitely is. "

The full article can be checked by the link in my earlier post above.

I just read it through again and it does say that if a house is bought to rent rather than to trade, then no CGT will be payable, but the article does advise caution. To say that there is NO CGT in NZ is incorrect according to this article. Me? I don't know, just a worried punter.

I am also concerned about UK CGT rules where it is payable if the house is not your principle residence. Such CGT is reduced by the amount of time you stay there, but I am wondering if they will let you off, just because you are no longer a resident? CGT on houses is typically paid to the country of location rather than residence.

It also links in with one of my reasons for wanting to leave GB, I simply do not trust the government there. They could easily change CGT rules retrospectively and take even more of the increase in value.
I hope in all of this I am wrong!

cheers

alex :hopeso

[Moorf]

I so agree with the distrust in UK govt... it seems that whatever you have strived for, invested in etc that eventually they'll get their paws on at least 40% of it.... take my flat for instance, I bought it in 1990 during the big "crash" for just £26K !!! It's now valued at c. £100K. BUT, as I have rented it out for the last 10 yrs or so, if I sold it I would have to pay 40% of the difference between £26k and £100K.... so, my canny investment all those years ago will be split nearly half and half :wah :wah

BUT, our accountant advised us that there was a way of "indexing" the liability plus there is a £6k (oh whoopeee) allowance... going to have to look into this... however, I suspect we shall just keep the flat as our "pension" - it brings in rental income - but may have to rethink if the interest rates keep rising...

Glad we got rid of our main residence in Scotland, I can't help but feel that rural houses with land will be the Govt's next target - seeing as others did as we did and moved out of the city to the country - that's where the "money" has moved to and I am sure they will be knocking on doors and asking for it back. Just my thoughts, I'm not toooo hot on finance.. I leave that to hubby!!!

[Diny]

I'm not at all financially minded and may be giving a load of 'old crap' info here - but - I understand that if you have a rental property in the UK and are living overseas, there is a way to get around UK CG tax.

If you want to sell you need to 'evict' your tennants and then get your name on all the utility bills etc, and inform the bank (if there's a mortgage) that you are now living in the property. Doesn't matter if property is empty, or you are in it, or you are letting a mate stay there, as long as 'on paper' you are living there and it is your only residence, then if you sell you won't be fired up for CG tax.

Anyway - like I say - I'm no expert and I may have giving you all abit of duff info, but just thought I'd 'throw it up the flagpole and see who salutes'.

If there's any loophole that allows us to roger the UK govt like they are doing to us then I'm all for it.

Diny

[Moorf]

Yep, that was one of our reasons for living here (we're in the flat at the mo and have been since May) - to make it our "main residence". Might work.... :hopeso

[bbq]

Thanks Diny

sounds like a good idea to me. :clap

Good luck with it Moorf..keep posting anything you find out, coz I think I will be following you...

cheers

alex

[Douglas]

I hate to contradict anyone, especially when I don't know for sure myself, but I was quoting from an article in the NZ Herald
alex :hopeso

Hi Alex, I don't mind contradicting the New Zealand Herald article because there is no capital gains tax in New Zealand.

If you make "capital gains" from actively trading shares in order to realise profits as a source of income or if you trade property in order to realise profits as a source of income you are liable for income tax on the gains.

The IRD regards profits from active trading of assets as income. People who are not actively buying and selling assets are not liable for any tax because there is no capital gains tax in New Zealand.

I've simplified the situation a little above but the simplification will certainly hold true for anyone from overseas who is tax-resident in New Zealand and who is selling a rental property they've owned for a year or two.

[bbq]

Hi Douglas

Thanks for the explanation, very helpful. :nice1

Now all I have to worry about is UK PLC, but I think the guys here have given me some good ideas there as well!

CHEERS

Alex