As an Australian resident, you are usually taxed on any capital gains you make on overseas assets, such as selling an overseas property. You must report the capital gain in your tax return.

If the gain is taxable in Australia and you have paid foreign tax on it, you may be entitled to a foreign income tax offset, which provides relief from double taxation.

To be able to claim a foreign income tax offset, you must:

• Have paid an amount of foreign income tax; and
• include the income or capital gain you paid foreign income tax on in your assessable income for Australian income tax purposes.

Differences between the Australian and foreign tax systems may mean you pay foreign income tax in a different income year. However, you can only claim the offset after you pay the foreign tax.

If you need more information on how overseas capital gains tax implications affect your situation, contact us to speak with an investment property tax expert that can answer all your questions and provide personalised advice for you and your overseas investment assets.