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babybronco

Tax on Income from rental property in UK, what exemptions are there?

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Hi All

 

we emigrated May 2014, and I went to an accountant last July for help with my first tax return. I declared the rental income from my UK house, minus certain expenses e.g agent fees, repairs. However I was told mortgage payments were not included in deductible expenses. Is this correct? I've just read on another thread on here that you may be able to offset the interest part of the mortgage?

 

Many thanks.

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Mortgage interest is definitely deductible for Australian tax. But I'm saying no more as I'm not qualified and it's complicated!

 

Recommend you talk to a tax accountant who is familiar with UK and Australian tax. I am lucky that my employer takes care of this, but if I didn't have this I would be consulting someone like Alan Collett at Go Matilda.


Australia grabs you, and it won't let go!

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Hi All

 

we emigrated May 2014, and I went to an accountant last July for help with my first tax return. I declared the rental income from my UK house, minus certain expenses e.g agent fees, repairs. However I was told mortgage payments were not included in deductible expenses. Is this correct? I've just read on another thread on here that you may be able to offset the interest part of the mortgage?

 

Many thanks.

 

You need to get a statement from your mortgage provider which splits the payments into principal and interest. It's not something you can calculate yourself, as the proportion of principal to interest varies over the life of the loan (you pay more interest and less principal at the start, and vice versa towards the end). You can claim the interest portion. I'd be a bit worried about an accountant who told you otherwise.


Scot by birth, emigrated 1985 | Aussie husband applied UK spouse visa Jan 2015, granted March 2015, moved to UK May 2015 | Returned to Oz June 2016

"The stranger who comes home does not make himself at home but makes home itself strange." -- Rainer Maria Rilke

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Any expenses incurred.

 

Interest is an expense.

 

Capital repayment is not.

 

Trying to get a depreciation schedule organised could be worthwhile.

 

I didnt realise it could be done on an overseas property and claimed on aussie tax, but ours it just about sold, happy to be rid of it, even though we have made a huge loss, and not worth the extra hassle trying to go back and get previous years returns adjusted.

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Many thanks, clearly I need to speak to a different accountant as the one I used was misinformed! If I can deduct interest, that will bring my hefty bill down a little :-)

Edited by babybronco

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Many thanks, clearly I need to speak to a different accountant as the one I used was misinformed! If I can deduct interest, that will bring my hefty bill down a little :-)

 

It's such a simple accounting principle I'm really surprised he didn't know. Maybe it's the fact that it's in the UK, he thinks it must be different somehow. Maybe you should look at consulting someone who knows both tax regimes, may be more expensive but worth it in the long run?


Scot by birth, emigrated 1985 | Aussie husband applied UK spouse visa Jan 2015, granted March 2015, moved to UK May 2015 | Returned to Oz June 2016

"The stranger who comes home does not make himself at home but makes home itself strange." -- Rainer Maria Rilke

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It's such a simple accounting principle I'm really surprised he didn't know. Maybe it's the fact that it's in the UK, he thinks it must be different somehow. Maybe you should look at consulting someone who knows both tax regimes, may be more expensive but worth it in the long run?

 

I'm not as surprised as you. There's an awful lot of people who can claim to be an accountant in this country. When choosing an accountant always make sure they're either Chartered or a CPA. Many of the other accounting bodies don't even set exams. Even the fact someone is a registered tax agent doesn't mean they're qualified - while they've tightened up considerably in recent years in the old days anyone could register and many of those agents are still working.

 

Shouldn't need to know both regimes if he's only been asked to do the Australian return - it's his knowledge of the Australian regime that seems to be lacking here.


Chartered Accountant (England & Wales); Registered Tax Agent & Fellow of The Tax Institute (Australia)

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