Uk assets?

[funkft]

Hello,

 

I am currently in the process of applying for OZ Visa and still a bit naive about certain issues - specifically the TAX system

 

We were hoping to coninue renting out our property in UK - do you get taxed on this in OZ?

[whoiam]

As far as I know the answer is yes because whilst an oz resident you get taxed on your worldwide income.

[flybyknight]

ah yes, but you can offset the house, and its associated running costs on your oz tax return. so in theory at least, it can be a very lucrative move to rent it out.

get an oz accountant that knows his stuff, and offset his fees on the tax return too

[Tarby777]

My understanding is that all worldwide income is taxable in Australia if you're a permanent resident; the ATO is a lot more forgiving if you're here on - say - a temporary visa such as a 457. For a permanent resident, UK rental income is treated as extra salary, so (assuming a standard-ish salary) you're likely to pay 30 or 37% tax on it here. So, assuming that you'll get a PR visa:

 

- if you're a couple, make sure the property is in your joint names so you can avoid most/all tax in the UK (the tax-free allowance is c.7000GBP per person in the UK)

- rent the property out to a friend or family if possible, keeping it off the radar altogether

- If you use an agent, get a decent one and don't get ripped off on commission. I just knocked my agent down from 12.5 to 10% by threatening to take my business elsewhere.

- If you use an agent, sign up for HMRC's non-resident landlord scheme so the income can be paid gross to you (the default is to pay you with tax taken off)

- Bear in mind that you can't claim your UK mortgage as a cost against which to offset the tax on your rental income. You can however claim interest charges on the mortgage, so if you have an offset mortgage and are generating little or no interest on it, you might want to rethink that.

 

HTH

Tarby

[Rupert]

ah yes, but you can offset the house, and its associated running costs on your oz tax return. so in theory at least, it can be a very lucrative move to rent it out.

get an oz accountant that knows his stuff, and offset his fees on the tax return too

 

Why would it be lucrative? Surely the rental income would easily cover the rental property costs, well you would certainly hope so.

[dianaos]

I am assuming flybyknight means that you can negatively gear against your Australian income.

 

I too am renting out my property here in the UK and using the rent to cover mortgage and agent costs, so net income will be really low and would be good if I could offset administration expenses etc in oz to manage the this overseas income.