LGK Posted January 29, 2017 Share Posted January 29, 2017 We're permenant residents living in Sydney. We have savings in the UK that we'd like to use to buy an investment property there. Does anyone know what the tax issues are to receiving UK rental income while living in Australia? Will we be able to use the negative gearing and capital gains tax concessions that people who own investment properties in Australia enjoy or will the rental income just be classed as non specified foreign income and taxed at our normal rate of tax? thanks Quote Link to comment Share on other sites More sharing options...
Keith and Linda Posted January 30, 2017 Share Posted January 30, 2017 We just bought one when we were over at Christmas mortgage free. We bought it only in Linda's name as she does not work here in OZ. First of all you will have to register with HMRC as a non resident for tax purposes so that you will not be taxed by the UK, then all income from rent ( this is rent minus provable costs ) will need to be included on your OZ tax return, hence why ours is in Linda's name. Negative gearing does not work as you cannot claim a loss from an overseas investment against your OZ taxes, however if you can prove costs equals rent received therefor zero income will have to be declared, regarding apitol gains on selling the property then I believe you do not get the OZ allowance for this either so it would have to be declared as foreign income, though someone on here will be more knowledgeable on these matters than I. Quote Link to comment Share on other sites More sharing options...
Alan Collett Posted January 30, 2017 Share Posted January 30, 2017 We just bought one when we were over at Christmas mortgage free. We bought it only in Linda's name as she does not work here in OZ. First of all you will have to register with HMRC as a non resident for tax purposes so that you will not be taxed by the UK, then all income from rent ( this is rent minus provable costs ) will need to be included on your OZ tax return, hence why ours is in Linda's name. Negative gearing does not work as you cannot claim a loss from an overseas investment against your OZ taxes, however if you can prove costs equals rent received therefor zero income will have to be declared, regarding apitol gains on selling the property then I believe you do not get the OZ allowance for this either so it would have to be declared as foreign income, though someone on here will be more knowledgeable on these matters than I. Not so, Keith ... Best regards. Quote Link to comment Share on other sites More sharing options...
LGK Posted January 30, 2017 Author Share Posted January 30, 2017 Not so, Keith ... Thanks Both, Alan are you saying we could offset the loan repayments, and other expenses, against the rental income and only pay tax in Australia on the remainder or, if expenses are more than the rental income. negatively gear this towards our tax on earning in Australia? Quote Link to comment Share on other sites More sharing options...
Alan Collett Posted January 30, 2017 Share Posted January 30, 2017 Thanks Both, Alan are you saying we could offset the loan repayments, and other expenses, against the rental income and only pay tax in Australia on the remainder or, if expenses are more than the rental income. negatively gear this towards our tax on earning in Australia? If this isn't too defensive a reply: I recommend you consider paying a professional for advice on which you are going to rely. Best regards. Quote Link to comment Share on other sites More sharing options...
LGK Posted January 31, 2017 Author Share Posted January 31, 2017 Thanks Alan, we are just seeking an answer to a simple question at this stage, to determine if buying property in the UK is a viable option. If we proceed we will certainly engage a professional tax advisor. I have found from experience that the more helpful an advisor is prior to being officially engaged, the more faith I have in their committment to quality paid service. Quote Link to comment Share on other sites More sharing options...
Alan Collett Posted January 31, 2017 Share Posted January 31, 2017 Thanks Alan, we are just seeking an answer to a simple question at this stage, to determine if buying property in the UK is a viable option. If we proceed we will certainly engage a professional tax advisor. I have found from experience that the more helpful an advisor is prior to being officially engaged, the more faith I have in their committment to quality paid service. Nicely put! For starters have a read here: http://www.gmtax.com.au/tax-deductions-in-australia-on-uk-rental-property-depreciation-as-a-tax-deduction/ Also: http://www.gmtax.com.au/?ddownload=1128 Best regards. Quote Link to comment Share on other sites More sharing options...
rammygirl Posted January 31, 2017 Share Posted January 31, 2017 (edited) Your main challenge will be getting a mortgage as a non resident. And don't forget to factor in the higher stamp duty for second homes, this applies if you already own a home anywhere in the world not just the UK. Edited January 31, 2017 by rammygirl Quote Link to comment Share on other sites More sharing options...
LGK Posted January 31, 2017 Author Share Posted January 31, 2017 Thanks Alan, that's very helpful. I will be in touch if we go ahead with buying an investment property. Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.