Guest orangegerbera2003 Posted July 18, 2008 Share Posted July 18, 2008 We have a UK rental property, live in Australia and are currently doing our Oz tax forms. The ruling in Australia is that you can claim depreciation on the build value of a rental property (ie. how much it cost to build the house originally). What I don't know is whether this is just for investment properties owned in Australia, or could I claim depreciation on my UK investment property on my Oz tax return? I have looked everywhere on the web and cannot find the answer. Does anyone know the answer? Thanks so much! Link to comment Share on other sites More sharing options...
Guest Pinhead Posted July 18, 2008 Share Posted July 18, 2008 There are a downloads on the ATO website that cover both rental properties and overseas assets. I suspect the answer is technically yes but how you go about substantiating your deduction is another matter. I would recommend you contact an Oz tax expert. Link to comment Share on other sites More sharing options...
Guest orangegerbera2003 Posted July 18, 2008 Share Posted July 18, 2008 Thanks Pinhead. I am working with a tax adviser but unfortunately she wasn't sure of the answer. She is also going to look into it, but I thought I would do some research myself to see if I could find the answer. I have looked through the ATO website but unfortunately can't find the answer to that specifically (it talks about depreciation on rental properties, but doesn't specify if these relate to just Oz properties or overseas ones too). I am hoping my tax adviser may have some colleagues who may know the answer. Thanks for the reply. Link to comment Share on other sites More sharing options...
Guest Pinhead Posted July 18, 2008 Share Posted July 18, 2008 I just go home & looked the 'Rental properties' download I have from 2007. It states that Capital works deductions aren't allowable on properties built before 1979. When was your house built? Different rules & rates for different build dates. This is the latest download on rental properties. http://www.ato.gov.au/individuals/content.asp?doc=/Content/00133187.htm Link to comment Share on other sites More sharing options...
Guest orangegerbera2003 Posted July 18, 2008 Share Posted July 18, 2008 Hi Pinhead. My house was built in 1998. Do you have a web link to the rental document you were talking about? Thanks so much. Link to comment Share on other sites More sharing options...
Guest Pinhead Posted July 19, 2008 Share Posted July 19, 2008 Hi Pinhead. My house was built in 1998. Do you have a web link to the rental document you were talking about? Thanks so much. http://www.ato.gov.au/content/downloads/IND00133187n17290608.pdf Good luck. I don't think there's anything in there that rules out having the same allowances for overseas properties. As I posted above substantiating the allowances will be the problem e.g do you know how much it cost to build your house (rather than what you paid for it)? Link to comment Share on other sites More sharing options...
Guest orangegerbera2003 Posted July 20, 2008 Share Posted July 20, 2008 Hi Pinhead. Yes, that is going to be the problem. I did have a Surveyor come to give me a rebuild value a few years ago which I have in writing (for insurance purposes). I, however, bought the house in 1998 (and rented it periodically while I lived in New Zealand). We then moved back to the UK and lived in it and then moved to Australia last year. I will call the Aussie tax office and ask them how they suggest I value the building - I have also asked a tax adviser if she could do some research for me into how this is done. There must be lots of other Brits who have houses in Australia who have had the same situation, so there may be way that the tax office allows us to value the house. Thanks again for all your help! Really appreciate it. Link to comment Share on other sites More sharing options...
Guest Liam Posted July 20, 2008 Share Posted July 20, 2008 Hi I am not a tax expert but I think you should look at the following link Changes to foreign loss quarantining and foreign tax credit calculation rules - Update September 2007 - Fact sheet Looks like up until July 1 2008 you were not allowed claim losses on UK rentals but from now on you can and you may be able to claim past losses in next years tax returns. If in doubt contact Alan collet who is a member on this forum and pay him for wrtten advice on the matter as the money you will say will be much more than it costs you for his expert opinon as a UK and Australian tax expert. hope this helps Liam Link to comment Share on other sites More sharing options...
Guest laurafireman Posted July 21, 2008 Share Posted July 21, 2008 i think you mean you CAN'T always get what you want! Link to comment Share on other sites More sharing options...
Guest Nakrob Posted August 23, 2008 Share Posted August 23, 2008 orangegerbera2003, good question. I am in the same position and have had fruitless internet searches looking for information on this matter. It seems there are hundreds of companies in Australia that will prepare a 'Tax Depreciation Schedule' for investment properties in Australia although getting the same thing done for a UK property, and whether it can be used to claim the depreciation in the Australian tax return, are questions I have not been able to answer. Have you been able to discover anything else since your earlier posts? This di not concern me previosuly as my property was cash positive, making me a small income, but given the change in the law to allow claims for losses this might have an influence on my position in future years. Link to comment Share on other sites More sharing options...
Guest orangegerbera2003 Posted August 24, 2008 Share Posted August 24, 2008 Hi Nakrob. I have found a tax accountant to do my tax (although still waiting to get all my figures from the UK tax office). I did ask him about my UK property and he said to me that you can claim depreciation on the fixtures/fittings etc, but not on the actual building itself. I think he is incorrect as it clearly states here that you can claim on Capital Works: http://www.ato.gov.au/content/downloads/NAT14233_06.pdf I then called the ATO and the gentleman had a long chat with a specialist while I was on the phone and they confirmed I could claim on the Capital Works. He said he could find nothing which differentiates this ruling from owning an Aussie property. He referred me to page 19 and 20 of the Rental Properties 2008 guide (which you can find on the ATO website). I asked him if I could confirm this all in writing. He said if I wanted this done, then I could apply for a Private Ruling (link on their website). Please don't take my word for it - I am not a tax adviser and it is wise to get professional advice. Hope this helps. Please let me know if you find out any further information. Thanks. Link to comment Share on other sites More sharing options...
Guest orangegerbera2003 Posted August 26, 2008 Share Posted August 26, 2008 Can anyone help me? I keep getting e-mails saying there are replies to this thread (since my last posting). Then when I go into it, there are no replies. Is anyone having the same problem? Are the replies just not getting saved on the thread? Thanks! Link to comment Share on other sites More sharing options...
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