How much tax to pay when renting out property?

[the4hopes]

Hi,
I went to the estate agents today to get some information on renting out our house, if we need to!
I just wondered if anyone knew the percentage of tax that is payable when you rent out UK property and live in Australia?
Just trying to do some sums to see whether this is actually an option.
Laura x :swoon:

[Tyke]

I'm no tax agent but............

We had a commercial property rented out for years in the UK.

The income was below tax bands in the UK but was added to our income here in Oz and taxed.

Maybe worth a quick visit to an accountant??

[alibongo]

we also looked into renting out our house in the UK ..The guy who saw us said that the only tax we would have to pay would be the amount we "earned" after all bills have been paid ie mortgage council tax home and contents insurance etc so it sounded quite a small amount.. However we didint continue down this route as we have sold our house suject to contract but if it all falls through we will have to have another look into it..

Ali

[Andrew Williams]

Hi.

I notice that you have a permanent visa, therefore you will be assessable on your worldwide income in Australia at your marginal tax rates here (there is a tax calculator on the ATO website). So any profit (rental income less costs to you, i.e mortgage payments, management fees) will be assessable.

You can complete a form through the HMRC and register as an overseas landlord so that you have no tax deducted off the the rent from the rental management company in the UK (if you are using one) they should know about this!

Hope this helps!

[Guzzler&Sas]

Like Andrew says you pay tax on any profit but I believe any losses on investments worldwide can be offset against your tax bill,

Guzzler

[Andrew Williams]

Hi.

I think it used to be that way but the way it works now is that the losses made from foreign income can only be offset against gains from foreign income.

If no gains are made then the losses can be carried over to subsequent tax years.

[the4hopes]

Thanks both thats a great help.
Laura x

[Liz and Kris UK]

If you are renting your house through an agent they have to charge you basic rate tax if you live abroad, so you need to feel in NRL1 from the tax office to avoid paying basic rate tax. We have just started renting our property out and emigrate at the end of May, we have filled out NRL1 form and waiting for a response from the tax Office.

Hope this helps

Kristian