Guest Andy and Tracy Posted September 27, 2008 Share Posted September 27, 2008 For those of you renting out your house in the UK - Hi all! I have replied to several posts and thought it might be useful to post this as a thread. This is how it works in the UK. I am sure it must be similar in Oz, but check it out. I am no expert, but I run our lettings business and this is what I do: On your end of year tax return you include the figure that you have received in rent for the financial year MINUS all revenue expenses that you have paid out. This is entered as "unearned income". It may well be a negative figure if you have made a loss. (I presume this will then be deducted from your tax bill for earned income under this system once in Oz, but check this) If you are self-employed, you will automatically be sent a tax return. If you are not, ask for one from the tax office. Revenue expenses are: mortgage repayments, buildings insurance, agents fees,phone calls to Agent, postage, cleaning, contract fees, gardening, window cleaning, replacing broken white goods in the kitchen, repairs, the list goes on - if you pay for any of this yourself you can reduce it from your rental income figure. KEEP ALL RECEIPTS. If you need to spend it on your house to keep the tenants in there, then generally it is an expense. You can deduct 10% for wear and tear from the original rental income figure, but this is in the UK. Just get an Accountant to complete your tax return whilst in Oz - he will surely know what you can claim as it may be different. You cannot claim for alterations that would increase the capital value of your property - i.e. putting in a new kitchen or double glazing. I would strongly advise using an Accountant. It is worth it for what they save you on your tax bill. If you are using an Agent, they will normally deduct what they have paid out in repairs etc from the rental income before they send it to you. Check what they do and make sure you get proper receipts. In the UK, you have to keep receipts for 6 years. Hope that helps. Tracy I will post a thread advising you on the legalities of letting a house in the UK. If you do not use an Agent, it can be a minefield. You can be fined and face prosecution for not fulfilling your obligations as a Landlord - Gas Safety Certificates / Energy Performance Certificates from 1st Oct / Tenancy Deposit Schemes / Tenancy Agreements / Your mortgage provider and Buildings Insurance provider and your obligations to them. Link to comment Share on other sites More sharing options...
Guest Andy and Tracy Posted September 28, 2008 Share Posted September 28, 2008 Quick update - just to let you know that Beermeister has stated on another thread where I wrote this, that the same system does apply in Oz, so some of you may find it useful. Tracy Link to comment Share on other sites More sharing options...
KathK Posted October 2, 2008 Share Posted October 2, 2008 This is interesting stuff - well done! As one of the things concerning me about a move to Oz is not selling house & the ensuing complications of renting it out instead Kath Link to comment Share on other sites More sharing options...
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