We have been here 21 months now. We rent out our UK and live in rented accomodation in Oz.
When we did our tax return last year, we declared our UK rental. Despite the majority of the UK rental income being paid straight out on the mortgage( 66% repayment, 33% endowement), the Australian tax agent told us that this year we would have a MASSIVE Australian tax bill, as all the UK rental is considered as income. We make very little on the property after paying mortgage, agent fees, insurance and maintenence. The money doesnt even leave the UK. The agent pays it into our UK account and the mortgage plus all other out goings come out of that account.
We havent even filed our Oz tax return yet as we as so worried about the tax bill! I know it has to be done by end October so time is at an end!
Is he correct or should we use a different tax agent. We really cant afford a huge tax bill. I havent seen anyone else saying this. Surely if this was the case, no one would be able to afford to rent out their UK house.
Any advise would be appreciated. Or any recommendations of tax agents as I wasnt over keen on the one we used last year ( probably cos I didnt like what he told us).
Thanks in advance