CLAW3201 Australian Taxation System
CGT Part II
Semester 1, 2024
Your Client, Alex, was born in Sydney and has been a tax resident of Australia for his entire life. However, on July 1, 2020, his company posted him to work in the UK. During this time, Alex rented out his main residence in Sydney.
On July 1, 2022, Alex established permanent residency in the UK, thereby ceasing to be an Australian resident. On this date, his 100 shares in BHP triggered CGT event I1. These shares were initially acquired on October 8, 2021, at a price of 40.05 per share.
Alex is interested in selling his house in Sydney, but he has learned that the main residence exemption does not apply to foreign residents, and the tax rates for foreign residents can be quite high. He is contemplating returning to Sydney for a minimum period of time just to sell the property.
What are the potential options and tax consequences for Alex concerning both the shares and the house? What are your suggestions for Alex? Under your recommendation, what could be the potential tax implications for both the shares and the house?
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