The ATO has issued two important Interpretative Decisions in the last few days that affect those who move to Australia and hold onto UK£ currency or loan balances.

More details are here:
http://www.gomatilda.com/news/article.cfm?articleid=327

Best regards.

:blink: What language is that in? Cos I cant speak it. I left my UK bank account open when we came here, as we arent permanent residents (though we are residents for Tax purposes).
:unsure:

See Alan I'm not the only one who thinks you don't explain what you mean in plain English !!!!

Nick Alcock :unsure:

So basically so long as I haven't opened a bank account in the UK (or anywhere else outside Oz) after the 1st July 2003 any money left in this account would not be taken into account if I later on decided to exchange the money from UK Pounds to Aussie Dollars!

But if I decided to open a bank account in the UK (or elsewhere in the world except for Oz) after the 1st July 2003 and then exchanged money over from UK Pounds in Aussies Dollars I would then have to pay tax on whatever the difference was in the gain from the time when I moved to Oz to the time that I exchanged the money. If this comes as a loss I can use this figure as a taxable deduction when I come to fillling out my tax returns in Oz.

Anotherwords DON'T open a new bank account to hold any money in before moving to Oz otherwise you will have to declare any gains or losses that you make on it due to the exchange rate altering when it comes to exchanging money over to Aussie Dollars! Does that sum it up?
(The mortgage or loan side of things wouldn't affect me so I'm not even attempting to go there!)

Bit of a mouthful I have to say but is that about it Alan? I would not be affected so long as I keep any money that I want to keep in the UK in my original bank account that I've had here way before the 1st July 2003!

Sasha :)

:o Oh, thats what it said! Thanks Sasha! guess Im OK then.

xxxx

I'm not an accountant - nor am I great at maths or financial matters - But I interpreted the summary of the report as did Sasha.

Alan thank you for giving such clear examples I found it helpful.

Now the decision is the hardest thing - hang onto £'s or convert to $ when we arrive?

Tracey.

:unsure: Im a total plank whenever anyone mentions numbers, so my brain went fuzzy at the first sentance, but I reread this and this time read the examples, which were excellent. Thank you Alan.
xxx

How many of us wish we had more long term accounts with good interest rates now??????

Tracey.

Question for Alan

If I open an account in the UK after July 2003 with an high interest rate and leave behind £100,000 until the exchange rate reaches my desired amount i.e. $2.70, I then transfer my £100,000 plus interest to an account I opened before July 2003 and purchase my $ does that mean I will avoid the Tax?

Nope, I'm afraid it doesn't ...

Best regards.

Sorry guys ... I try to avoid complicated words and phrases, but converting the tax law into something comprehensible isn't easy ...

At least you're now aware there's something relating to currency you should investigate!

Best regards.

Cheers Alan - always full of useful info. :thumbs up:

Another question for Alan,

Sorry for being a bit thick here but if it was transferred to pre july 2003 account in the UK and exchanged from there, how would they know?

David and Helen

Thanks Alan, it was worth a try.

That's a low ball question to ask of a Chartered Accountant ... :-))

My answer can only be that if you knowingly fail to declare your income it is a fraud on the ATO, and penalties and interest can be expected to eventuate if it becomes known to the tax office in the fullness of time.

Best regards.

What a dilemma?
Alan
I have had a LLoyds account in UK for years that is still open, I transferred most funds to HSBC after July 03 when setting up Oz account but retained additional funds in that new HSBC UK account. If I transfer back to Lloyds will I avoid the Oz tax on any gain in the future?
Any help would be appreciated
Brian & Ena

If your present situation is that you wouldn't realise a gain in A$ terms on the transfer of your funds from the HSBC account to the LloydsTSB account - yes, I think you probably would.

By "gain in A$ terms" I mean is the A$ value of the funds in the HSBC account more now than it was when you became tax resident in Australia? If the answer is no you may be able to escape the liability to tax I have discussed in the GM News article by transferring the funds to your "old" bank account - but for certainty I would seek a Private Binding Ruling from the ATO.

Best regards.

Hi Alan

Thanks for the contact name & no on Expats... :thumbs up: