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Lauren & Luke

Taxes On A House In The UK When Living In Oz

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On 27/01/2021 at 14:33, Lauren & Luke said:

Hi Craig,

Thank you for the info. Did you use a tax agent?

Are you using an rental agent?

Where in Australia are you heading? 

It would just be me, my husband and our british bulldog Daisy.

We initially wanted to head to Perth but when we had our consultation back in March 2020, the visa we were advised to take was the 491 but that didn't cover WA. 

My husband would be the main applicant as he is a joiner. I work for an insurance company, unfortunately that is not in demand 😞

Lauren 

Hi Lauren,

We will be using a rental agent here. You just need to get a NRL1 form so the rental agent doesn't take tax from source and you would then do your yearly tax return in the UK on your rental and your Oz tax will be separate. 

We are heading to Perth. Don't know who your consultation was with but the whole of WA is classed as regional 😅. Wife is a nurse so we was lucky with getting the grant so quick after lodging it is just the problem of getting there now. I am a geologist and we used to be on the list but over time have been removed. 

Craig

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On 27/01/2021 at 23:37, Ausimi said:

Hi Lauren, 

we are going to Perth, visas sorted only trying to figure out how to get there and when.

I have to enter Australia before November 2021, but not sure if that’s going to be possible, it’s all very uncertain!
 

It is difficult to plan anything at the moment when you hear stories about flights being cancelled and quarantine to think about! We are my husband, me and a 5 year old, so not easy at all! 

We are exactly the same. Our medicals run out in November 2021 visa grant was the 7th of december so we have until then as well. Good luck with it, let us know how you get on and I will do the same 👍

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On 07/12/2020 at 12:54, DrDougster said:

Another couple of things to bear in mind are that if you rent out a property with a mortgage the mortgage interest can still be tax deducted in Aus even if the property is in UK. Another is that the property ladder is a bit of a myth, it's just one form of (hopefully) appreciating investment which has the benefit of CGT avoidance but the hinderance of stamp duty if you decide to move investments. Unless you sell your house and decide to keep the money in a suitcase under the bed then you'll hope to make money on it from a different investment and then can decide when to put it back into property. For example if you'd sold your house at the end of October and bought Pfizer shares and were now going to move it back into property you probably wouldn't be too troubled!

Hi DrDougster....

Am I reading your first line correctly and that mortgage interest on a UK investment property can be claimed as a tax deduction in Australia despite this no longer being allowed in the UK.  I had thought that one would have filed their UK tax return and all the ATO would look at would be the final number. 

Would love to learn a little more about this as I can't believe I've not picked up on this before.

Thanks in advance......

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On 23/02/2021 at 21:10, Coops13 said:

Hi DrDougster....

Am I reading your first line correctly and that mortgage interest on a UK investment property can be claimed as a tax deduction in Australia despite this no longer being allowed in the UK.  I had thought that one would have filed their UK tax return and all the ATO would look at would be the final number. 

Would love to learn a little more about this as I can't believe I've not picked up on this before.

Thanks in advance......

The Australian Tax system has one set of rule the UK tax system has another. Never expect the two to be the same. Yes, in Australia mortgage interest on investment properties is deductible whereas in the UK you get a tax credit of 20% of your interest. Your UK tax return is for the year to 5th April and is in GBP, whereas your Australian tax return is for the year to 30th June and is in AUD. Even when they contain just the rental income for the same property the numbers are never going to match and that's even before you take into account the difference between what is (and how it is in the case of mortgage interest) deductible.


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

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On 23/02/2021 at 20:10, Coops13 said:

Hi DrDougster....

Am I reading your first line correctly and that mortgage interest on a UK investment property can be claimed as a tax deduction in Australia despite this no longer being allowed in the UK.  I had thought that one would have filed their UK tax return and all the ATO would look at would be the final number. 

Would love to learn a little more about this as I can't believe I've not picked up on this before.

Thanks in advance......

Yup, all true and all I ask is 10% of any monies recovered after reading my post 🙂

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3 minutes ago, DrDougster said:

Yup, all true and all I ask is 10% of any monies recovered after reading my post 🙂

Don't forget to remind them that despite the much hyped end to mortgage interest on investment properties not being deductible they can still claim a tax credit for their interest in the UK which for basic rate tax payers is just as good (and nearly all people won't have enough UK income to be higher rate tax payers after they've emigrated). That should earn you a bit more commission!


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

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21 hours ago, Ken said:

Don't forget to remind them that despite the much hyped end to mortgage interest on investment properties not being deductible they can still claim a tax credit for their interest in the UK which for basic rate tax payers is just as good (and nearly all people won't have enough UK income to be higher rate tax payers after they've emigrated). That should earn you a bit more commission!

Sweet. I'll split that with you Ken.

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