glasgow joiner Posted March 7, 2017 Share Posted March 7, 2017 Hi there,just wondering if you rent your property in the uk out are you supposed to do a tax return for it any info appreciated Quote Link to comment Share on other sites More sharing options...
Bristle Posted March 7, 2017 Share Posted March 7, 2017 Hi there,just wondering if you rent your property in the uk out are you supposed to do a tax return for itany info appreciated Yes, you are. We take evidence of the rent coming in and then the tax agent takes off our agent fees, any outgoing against the property, like repairs and insurance, and then the interest payments on our UK mortgage. What is left is converted to AUD and added to your income for tax to be paid. Quote Link to comment Share on other sites More sharing options...
Tulip1 Posted March 7, 2017 Share Posted March 7, 2017 Of course, you must declare all income but as has been said you can offset some of it like the interest on your mortgage payments. Only the interest though, sounds obvious but many try to claim for the whole mortgage payment! Quote Link to comment Share on other sites More sharing options...
javadxster Posted March 7, 2017 Share Posted March 7, 2017 Are paying tax both in UK and Australia? Quote Link to comment Share on other sites More sharing options...
robfromdublin Posted March 8, 2017 Share Posted March 8, 2017 I would have thought there's a double taxation arrangement so you wouldn't pay tax in UK? Also, if all the income remains domiciled in UK, would the ATO have any way of knowing it was there? Quote Link to comment Share on other sites More sharing options...
Ken Posted March 8, 2017 Share Posted March 8, 2017 I would have thought there's a double taxation arrangement so you wouldn't pay tax in UK? Also, if all the income remains domiciled in UK, would the ATO have any way of knowing it was there? The double taxation agreement actually means that you pay tax in the UK first (because the property is in the UK) but then can offset that tax against the Australian Tax. The income (and related expenses) is on both tax returns (although different rules apply to expenses in the two countries so amounts may be different even after adjusting for the different year ends). However most people are able to claim the UK Tax Free allowance and so pay no tax in the UK so have nothing to offset against their Australian tax bill. HMRC now demand the foreign Tax File Numbers of tax payers with addresses outside the UK which allows for easier sharing of information. Quote Link to comment Share on other sites More sharing options...
northshorepom Posted March 8, 2017 Share Posted March 8, 2017 At the risk of adding complication, if you're on a temporary visa then foreign earnings are not taxable in Australia AFAIK. This would apply if, say, you were on a 457 and renting out your UK property Same goes for capital gains. Your start point for liability is the day you get PR (if you are doing so). But if you are PR and later dispose of said property in the UK then you need to declare any capital gains for CGT as well Quote Link to comment Share on other sites More sharing options...
Plentymech Posted March 10, 2017 Share Posted March 10, 2017 As others have said before, you have to submit a UK tax return each year for UK rental income. As our property is in mine and my wife's name and we were advised by the UK tax helpline, when we initially inquired as to how it worked, that we split the costs (agent fees, repairs, insurance etc.) and the profit 50/50 between us and it always comes out below our personal UK tax allowances. Quote Link to comment Share on other sites More sharing options...
Tulip1 Posted March 10, 2017 Share Posted March 10, 2017 Worth mentioning to all you out there with BTL properties, make sure you are up to date on the new tax rules that are being introduced from next month. They include not being able to offset the interest paid on the mortgage and other things like not being able to offset 10% for wear and tear. It will be you can only offset actual repairs you have done instead. Lots of changes around BTL that are not being welcomed by landlords Quote Link to comment Share on other sites More sharing options...
Ken Posted March 10, 2017 Share Posted March 10, 2017 Worth mentioning to all you out there with BTL properties, make sure you are up to date on the new tax rules that are being introduced from next month. They include not being able to offset the interest paid on the mortgage and other things like not being able to offset 10% for wear and tear. It will be you can only offset actual repairs you have done instead. Lots of changes around BTL that are not being welcomed by landlords The changes appear to have made it a lot more complicated to work out (although until we see the new self-assessment forms it's hard to say how much more difficult it will be in practice) but the new system really only affects UK higher rate tax payers as you get a basic rate offset to replace the actual finance charge. If you're under the tax threshold (unless you're only there because of the wear and tear allowance you're claiming and you're not actually spending anything on repairs) you can expect to remain there. Quote Link to comment Share on other sites More sharing options...
Tulip1 Posted March 10, 2017 Share Posted March 10, 2017 That makes lots of sense Ken. I saw on the tv they were saying it would have consequences on people in the uk that say earn in salary under the £50k bracket that allows them to claim child benefit but if these people have a BTL property they may be pushed just over that £50k and not be able to get the child benefit. Before, when they could offset mortgage interest and wear and tear etc they would still stay under the £50k threshold whereas now they look like in income they're over it on paper but it's not really their income (available to spend) as they pay much of it to the mortgage lender and can no longer offset it. I'm sure you could explain that far better than me but you get the gift of it I hope. Guess that won't effect most on here Quote Link to comment Share on other sites More sharing options...
jaymzrsa Posted March 10, 2017 Share Posted March 10, 2017 I thought if you lived outside of UK you didn't get a tax allowance. Basically the first penny you make is taxed at 20%? I am about to move and will be renting out my home and this is the information I have been given. Quote Link to comment Share on other sites More sharing options...
Ken Posted March 10, 2017 Share Posted March 10, 2017 I thought if you lived outside of UK you didn't get a tax allowance. Basically the first penny you make is taxed at 20%? I am about to move and will be renting out my home and this is the information I have been given. No. If you're a British citizen (or of any EEA country - at least until after Brexit) you still get the Personal Allowance. Quote Link to comment Share on other sites More sharing options...
Plentymech Posted March 12, 2017 Share Posted March 12, 2017 They include not being able to offset the interest paid on the mortgage and other things like not being able to offset 10% for wear and tear. Good to know. I thought I read when I started renting it out 4 years ago you couldn't offset the interest anyway but I may have been mistaken. Also I didn't know about the 10% for wear and tear. Oh well, I can't lose what I didn't have. If that's correct on the interest then that's potentially quite a big change that could affect a lot of people that are also getting an additional UK income from somewhere else. Quote Link to comment Share on other sites More sharing options...
Alan Collett Posted March 13, 2017 Share Posted March 13, 2017 https://www.gov.uk/check-if-you-need-a-tax-return http://www.gmtax.com.au/do-you-need-to-lodge-a-uk-tax-return/ I'm late to this thread after a week away on holiday in NZ. Hope the above links help. Best regards. Quote Link to comment Share on other sites More sharing options...
glasgow joiner Posted March 13, 2017 Author Share Posted March 13, 2017 Thanks everyone for the info Quote Link to comment Share on other sites More sharing options...
Ken Posted March 13, 2017 Share Posted March 13, 2017 I'm late to this thread after a week away on holiday in NZ. Hasn't the internet got as far as NZ yet? Quote Link to comment Share on other sites More sharing options...
Bound4Tassie Posted March 13, 2017 Share Posted March 13, 2017 Hasn't the internet got as far as NZ yet? On H-O-L-I-D-A-Y ! Quote Link to comment Share on other sites More sharing options...
Alan Collett Posted March 13, 2017 Share Posted March 13, 2017 Hasn't the internet got as far as NZ yet? Not where I was, Ken ... and hurrah for that! Best regards. Quote Link to comment Share on other sites More sharing options...
salsera Posted April 12, 2017 Share Posted April 12, 2017 oh thanks for posting this and all the replies, please can someone help as I'm now very confused? We are on 457 with rental property in UK. Our UK rental agent managing the property for us got us to sign a form so that we don't have to pay uk tax on our rental income, we declared our UK rental income on our Australia tax return last year. Reading all the comments it looks like we might have missed out through the personal tax allowance. Can you please advise what we should do this year, or if there is a good tax advisor who knows about both UK and Australia tax that can help us? Quote Link to comment Share on other sites More sharing options...
Alan Collett Posted April 12, 2017 Share Posted April 12, 2017 It is almost certain that your UK rental income should not have been included on your Australian tax return. Suggest you explore amending your 2016 Aus tax returns. Best regards. Quote Link to comment Share on other sites More sharing options...
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