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Change in Capital Gains Tax Exemption All Australian Expats Need to Know

The proposed removal of the main residence exemption on capital gains tax (CGT) for non-residents was met with criticism when it was first introduced in 2017. Although the Bill lapsed, a recent reworking was brought back on October 23rd, 2019. 

So, what’s new? More importantly, what does this mean for Australian expats who still own a former main residence?  

Changes with the main residence exemption for non-residents 

As a revisal of the original Bill, this new proposed measure delays the inevitable loss of the CGT exemption. Two primary changes have been introduced. The first is simply an extension of the transitional concessions. 

This concession applies for expats who owned a primary residence on May 9th, 2017. Existing Australian expats now have until June 30th,2020, to sell their main residence under the existing rules. (Previously they had until June 30th, 2019). 

The new Bill also introduced some exceptions whereby a non-resident may be able to access the main residence exemption. These exceptions apply in the event of death, terminal medical conditions, or divorce. However, these events must occur within 6 years of becoming a non-resident. This ensures that the 6-year absence rule can still be accessed by expats who face such unexpected life events.  

Retrospective application means there will be no expat CGT main residence exemption for any foreign resident.

It’s not all that often that major tax changes are applied retroactively. In this case, it does. Anyone who purchased their primary residence before a hint of these changes existed will still be caught by them. 

Were you a foreign resident with a main residence property held on May 9th, 2017? The main residence exemption will only apply for non-residents if you sell prior to June 30th, 2020. Of course, you still need to meet the usual requirements for main residence CGT exemptions. If you wait, then you’ll miss out. You won’t even be able to apply for a partial main residence exemption.  

No relief for long-term main residence

Imagine this scenario. 

You purchase and live in a home from 1989 through to 2019. You’re then given the opportunity of a lifetime and make a permanent move overseas. You put your home up for sale immediately. However, by the time your property sells, you are a non-resident for Australian tax purposes. This means you are hit with a CGT bill on the capital gain. It doesn’t matter how long you previously lived in the property. You don’t qualify for any exemption. On top of this, you’re missing out on potential capital gains reductions. That’s because you didn’t think it was necessary to keep the relevant records for the 20 years that you lived in the property.  

Anyone who purchased their main residence after May 9th, 2017 will be caught under the new laws when they sell as a non-resident. Whether they sell now or next year, they will be subject to the full CGT. 

Time To Act

While the Bill hasn’t passed into law yet, it is important to strategise. Be prepared for what it may mean for your situation and plans so that you have your contingencies ready and, if necessary, put any immediate plans into action. While CST Tax Advisors and other accounting bodies will continue to address the concerns with this measure, it’s important that you understand how these measures could impact you. 

 

Contact CST Tax Advisors to discuss your current situation and assess your options.

IAM Comments on Proposed New Rule Affecting Expats Moving to the USA

The president of the International Association of Movers (IAM), Charles White, recently submitted comments on the Customs and Border Protection Bureau regarding the Proposed Rule: Customs Broker Verification of an Importers’ Identity.

The proposed rule requires importers to provide additional information to U.S. customs brokers with the purposes of verification of the importer’s identity. The rulemaking requires the following details:

  • Email and business website
  • Business registration details
  • Recent credit report 
  • License with state authorities

In the submitted comments IAM challenges that the proposed elements are not applicable for individuals who don’t own a business and are just importing their used household goods and personal effects into the U.S. 

IAM states that “These requirements are clearly written for companies that import goods into the U.S. but do not recognize that people like our clients import goods as well.”

Expatland is a member of the IAM and we fully support the view that individuals moving their personal possessions to the U.S. should be exempt from these new requirements.

UK Roadshow – Job Opportunities Abroad

Expatland E-Team member Canstaff and Heartland Immigration, a global recruitment and staffing service providers are running a roadshow to assist UK residents looking for work abroad.

The roadshow will run throughout the UK in 6 key locations and will provide information and assistance regarding immigration, property search, foreign exchange and expat insurance in addition to job placement.

The Roadshow location and dates are as follows.

Oct 28,2019 – Glasgow

Oct 29, 2019 – Middlesbrough

Oct 30, 2019 – Sheffield

Oct 31,2019 – Birmingham

Nov 2, 2019 – Swindon

Nov 3, 2019 – London

For more information visit the website.

Harmony Relocation Network

Harmony Relocation Network and Expatland Global Network form Worldwide Agreement

Harmony Relocation Network, a global cooperative network of locally owned relocation companies and Expatland Global Network have today formed a worldwide agreement.

Harmony Relocation Network members that hold FIDI’s FAIM certification have the opportunity to co-lead Expatland’s E-Teams to develop their businesses and help global expats heading to Expatland.

FIDI is the global alliance of professional international moving and relocation companies. The FAIM certification plays a key role in maintaining standards within the international moving and relocation industry.

Harmony Relocation Network was founded in 1992 and consists of over 140 members in 60 countries, serving 180 countries across six continents, providing the same high level of high quality services, local expertise and personal commitment.

The Expatland Global Network is made up of E-Teams. Operating at city level, they have essential local knowledge and insight. They cut through complexity and drill down to the issues that are relevant to specific locations.

John Marcarian, founder of the Expatland Global Network, says, ‘We are very pleased that Harmony Relocation Network members will co-lead our E-Teams. We take comfort in knowing that these companies are highly qualified and globally recognised. We are very pleased to work with Harmony Relocation Network to ensure our members are moved by the best.”

Paul Bernardt, Managing Director, Harmony Relocation Network, comments: “The Expatland Global Network is a true innovation developed by John Marcarian. We believe that the Expatland Global Network offers an excellent integrated platform to assist global expats on the move. We are very pleased that our members now have the opportunity to lead Expatland’s E-Teams across this dynamic and growing network.”

 

‘Expatland’ origins

Expatland began as a book, written in 2015 by John Marcarian, as a result of John’s personal expat journey. Its focus was to help expats plan their move overseas.

 

E-Teams around the globe

The Expatland book was just the start. To solve the problem of lack of support for would-be expats, John launched the Expatland Global Network in 2018.

The Network is expanding rapidly. There are now E-Teams in more than 20 cities, including Sydney, Melbourne, Auckland, Prague, Budapest, Hong Kong, London and Singapore. With best-in-practice members recognising the importance of this service, many more will follow.

Businesses interested in joining an E-Team in their city can get in touch with Expatland: http://www.expatland.com/contact/

 

About Harmony Relocation Networkhttps://www.harmonyrelo.com/

Relocation is more than just moving people. It’s about moving people’s lives. That’s why, whatever we do, we do it with our heart and soul, striving to surpass the expectations of the people we work and care for.

Our global network was founded in 1992 with a focus on Europe and the USA. In the late nineties, the global expansion began, mainly because our customer base was also expanding. The network first expanded to Australia and Asia. Middle East, Latin America and Africa quickly followed suit.

 

 

International Association of Movers Conference

Our Founder, John Marcarian, will be attending the 57th Annual Meeting & Expo of International Association of Movers (IAM) to be held on 3rd October 2019 in Chicago, Illinois.

We invite Harmony Relocation Network members with FAIM certification to book a meeting with John to discuss the opportunities of joining an E-Team in our network

To book a meeting please email concierge@expatland.com

How to be an Expat

Our Founder John Marcarian, who has spent most of his life in Expatland, (A virtual country where expats live) was recently featured in Business Life. John talked about his experiences as an expat in Expatland.

He stresses that expats should always plan their departure before making the move.

John advises,” As an expat, one should plan for everything before departure, place to live, which school to send the children to and  even read your employment contract, even though you are being transferred to another branch of the same company, the local rules might be very different.”

You can read the full article at Business Life article July 2019

Bruno Hicke, our Paris Group Leader, provides much needed advice

Our Paris Group Leader, Bruno Hicke of BH & Associés, recently provided much needed advice to a This is Money UK reader.

The reader’s elderly mother was having difficulty closing a French bank account and was being charged fees as a consequence of the delay.

Read Bruno’s advice on the This is Money website.

The Finder Toasts The 2019 Expatpreneur Awardees

The Finder celebrated the Expatpreneur Awardees with a lunch at mezza9 at the Grand Hyatt in Singapore on 31st May 2019.

Our founder, John Marcarian (pictured above), as the Longevity Award winner joined the other awardees to celebrate this year’s winners.

See more of the event on The Finder website.

How does the Coalition win affect the immigration policies?

With the Coalition’s victory in May 2019 Federal elections, the immigration system is expected to continue the past six years trends. Prior to the election, Prime Minister Scott Morrison announced a cap of 160,000 migrants per year for the next 3 years.

Out of this number 30% will be allocated to the Family migration while the remaining 70% will be dedicated to the Skilled migration stream.
Out of the latter category, 39,000 visas in 2019-20 will be allocated to Employer Sponsored skilled visas, which shows an increase of almost 3, 500 places. However, the Government introduced stricter labour market testing, so that skilled migration is only used where an Australian worker is not available and stronger English language, age and work experience requirements are required.

 

Introduction of two new regional visa categories

Within the Employer Sponsored skilled visa scheme, a particular focus will be on the regional areas. The Government will introduce two new regional visa categories (Subclass 491 Skilled Work Regional (Provisional) visa and Subclass 494 Skilled Employer Sponsored) in November 2019.

Under these two schemes, skilled migrants will be priority processed and afforded access to a larger pool of jobs on the eligible occupation lists compared to those who live in the major cities. Also, skilled migrants will have a pathway to permanent residence under the Subclass 191 Permanent Residence (Skilled Regional).

Skilled Work Regional Scheme

This regional scheme will be reinforced by the Designated Area Migration Agreements (DAMA), which target specific skilled migrants to work in the regional areas of need.

With the DAMAs, the Federal government this year is aiming to provide more attractive incentives to the new settlers in Australia to avoid the big cities and settle in the areas that are not so populated and still requires the new migrants’ skills and expertise.

For this purpose, they have allocated a number of places, to encourage the new migrants to settle in the Northern Territory, the Great South Coast of Victoria, the Orana region in New South Wales, South Australia and Kalgoorlie-Boulder in the Western Australia’s Goldfields.

What this means for you as an expat moving to Australia

Expats seeking to move to Australia now have a greater opportunity to apply for a visa under the two new regional visa categories as there is a larger pool of jobs on the eligible occupation lists .In addition, their visas will be processed more quicker than other applicants as  they are afforded priority processing. Expats in Australia who hold these visas will also have a pathway to permanent residence under the Subclass 191 Permanent Residence (Skilled Regional) Visa.
The team at Migration World are ready to and can assist you with all your questions and enquiries regarding the granting of a visa to enter and live in Australia