Declaring rental income on 482 visa

[Ss93]

Hi all, was wondering if I could get some advice. I’m currently working in Australia on a 482 temporary skills shortage visa. This will just be for 1-2 years then I will go back to the UK

I have a rental property in the UK and I’m really struggling to work out if I need to declare this ok my Australian tax return. As far as I understand it I want to be an Australian resident for tax purposes as this  grants me the tax free threshold. But does this also mean I need to pay tax on my uk rental income in Australia as well? As the tax year is April-April in the uk, if I declare it will I have to pay tax on it in Australia from the period April-July?

Was wondering if @Alan Collett might be able to help, but appreciate any advice in advance. 

[InnerVoice]

6 hours ago, Ss93 said:

Hi all, was wondering if I could get some advice. I’m currently working in Australia on a 482 temporary skills shortage visa. This will just be for 1-2 years then I will go back to the UK

I have a rental property in the UK and I’m really struggling to work out if I need to declare this ok my Australian tax return. As far as I understand it I want to be an Australian resident for tax purposes as this grants me the tax free threshold. But does this also mean I need to pay tax on my uk rental income in Australia as well? As the tax year is April-April in the uk, if I declare it will I have to pay tax on it in Australia from the period April-July?

Hi, if you are an Australian resident for tax purposes then you must declare income you earn anywhere in the world on your Australian tax return, so the answer to your first question is 'yes'.

https://www.ato.gov.au/individuals/income-deductions-offsets-and-records/income-you-must-declare/foreign-and-worldwide-income/australian-resident-foreign-and-worldwide-income/

As far as I am aware you can't choose where your tax residency is, which is determined through a number of tests applied by the ATO.

https://www.ato.gov.au/Individuals/Coming-to-Australia-or-going-overseas/Your-tax-residency/

Australia and the UK have a double taxation agreement which ensures that income earned in either country isn't fully taxed by both countries. I would consider getting professional advice regarding this because there are different ways rental income can be handled. Here are a couple of links to info on the GOV.UK website that might prove helpful.

https://www.gov.uk/tax-uk-income-live-abroad

https://www.gov.uk/tax-uk-income-live-abroad/rent

[Andrew from Vista Financial]

I'm not a Visa expert so cannot comment on the specifics of a 482 visa however generally a temporary resident for visa purposes (although they may be resident for tax purposes) does not have to declare their worldwide income in Australia just their Australian income.

https://www.ato.gov.au/individuals/income-deductions-offsets-and-records/income-you-must-declare/foreign-and-worldwide-income/foreign-and-temporary-resident-income/#:~:text=Temporary resident foreign income exemption,of being a temporary resident. 

Edited June 16, 2023 by Andrew from Vista Financial

[AliG]

DELETED

Edited June 16, 2023 by AliG
incorrect

[InnerVoice]

12 hours ago, Andrew from Vista Financial said:

I'm not a Visa expert so cannot comment on the specifics of a 482 visa however generally a temporary resident for visa purposes (although they may be resident for tax purposes) does not have to declare their worldwide income in Australia just their Australian income.

https://www.ato.gov.au/individuals/income-deductions-offsets-and-records/income-you-must-declare/foreign-and-worldwide-income/foreign-and-temporary-resident-income/#:~:text=Temporary resident foreign income exemption,of being a temporary resident. 

This emphasizes the importance of getting professional advice on tax matters and not relying on what well-meaning folks say on forums!

[rammygirl]

The ATO website is pretty good and you can call them if you need clarification.  Tbh though a good accountant is worth paying for, one who can do both UK and Aus tax.

As Andrew says on a temp visa foreign income is exempt from Aus tax, you may still be required to declare it though, and obviously pay tax in UK. 

[Ken]

5 hours ago, InnerVoice said:

This emphasizes the importance of getting professional advice on tax matters and not relying on what well-meaning folks say on forums!

Happy to assist if required. Yes, temporary residents are exempt from tax on foreign income. Target foreign income does still to be declared (even though it is not taxed) as it impacts your entitlements to some benefits (although as temporary resident you are not normally entitled to them anyway).