Negative gearing on UK owned property rented out

[Guest grants]

Just wondering if anybody who still has a UK property that is rented in UK, is looking to claim negative gearing on their Australian tax return. We have been told it is possible to do this.

 

We have left a property and recently had a change of tenant and had to reduce the rent so we are currently about $300 dollars down a month after we have paid the agents fees and mortgage. In addition we have had to have electrical and gas checks and so it goes on but we are not in a position to sell as we are tied into a mortgage for a further 5 years and we are hoping eventually we may make a profit on this property so we are looking at it as an investment.

 

One worry is that is we do claim tax relief over here what happens when we eventually do sell it? Do we have to pay capital gains tax over here?

[NickBrigham]

Not sure about the negative gearing, but my understanding is that there will be no capital gains tax so long as you only ever own one house at a time, i.e. have just one permanent residence.

[Andrew from Vista Financial]

Hi Grants

 

Best to speak to an Accountant that understands both tax systems, that way you can plan correctly leading up to when you sell it.

 

Negative gearing an overseas property will depend on visa status, it can be done if a permanent resident.

 

Capital gains !!!!!

 

Will depend on a lot of factors, do you own property here? How long you rented it out for after it was your main residence, etc etc.

 

British Citizens who have UK income need to do a tax return, if you have to pay UK tax you may get a tax credit in Australia.

 

You may already be aware that you can complete a form as an overseas landlord to have your UK rental income paid Gross, (this does not mean it is exempt from UK tax though).

 

As I say get advice on this sought of stuff well in advance as it can save you a few $$$$ in the long run.

 

 

Regards

 

 

Andy

[wesandmel]

Hi

 

We currently have a property in england that is being rented out, we are renting it basic price and are only making 27 pound profit on it each a year (no big shopping sprees for me!!) I dont currently work, do i still have to fill in a tax form here even though it is well under the annual tax limits in the uk?

 

Also can anyone recommend a good tax accountant (for my oh)

 

cheers

 

Mel

[Guest Team 'W']

Contact Alan Collett at Go Matilda, he's originally from the UK but now based in Melbourne and a qualified accountant in both UK and Australian accountancy.

 

info@gomatilda.com