ROMFT_WO2RN

Good to know ta So I just tick the "yes" box to the question about owning a foreign asset worth more than $50k and then if it gets sold it'll just be CGT on the difference between that price and the initial becoming PR/acquisition valuation? Minus any source CGT in Ireland?

Kiwipaul

Correct.

You also get a 50% CGT allowance if you hold the asset for 12 months from the time you become tax resident in Oz.
Not sure how you handle the CGT liability in country of Asset.

Turban Explorer

Do you know if you can offset interest payments and/or home improvements on a UK mortgage against income in Australia at the end of the tax year?

Thanks everyone for the good wishes. Perth's pretty nice and I'm bumming around sailing at all the yacht clubs until I get my own boat back and head off back to the Whitsundays. Bit of tennis at Kings Park. Sort of looking for a part time job but not with any major intent. Relieved to have PR now and hopefully I can do another year (is it less 90 days)? for citizenship....

Amazulu

Congrats and welcome to Perth TE

I meant it about the whinging........

Kiwipaul

I believe you can now offset interest payments, rates, insurance, (NOT improvements as that is a capital cost) etc for rental property abroad against your Oz income.
Tax system here changed about 4 years ago, prior to that you had 4 different classes and expenses in one class could only offset income from the same class.

ROMFT_WO2RN

Cheers will be holding it until the old man kicks the bucket, so hopefully a while yet

louH

If you want to look into it search subdivision 855-B on the ATO website, this outlines CGT consequences when you become an Australian resident.

Don't know your circumstances but don't forget tax residency is based on criteria such as physical presence, domicile, the 183 day rule etc and not really your visa status.

ROMFT_WO2RN

Ta,

paddyo

You can also offset your travel costs to check on the property, but, you will need to ensure that everything on the trip was purely for that purpose and not just as aside.
I also understand that it is the interest charges you can offset but no the repayment charges. I have a repayment mortgage back in UK and am renting my property out but I am losing 400 pounds a month between the mortgage payments and the rental but I don't think I can offset that.

paddyo

oh...BTW TE, congrats on PR...only 2 months behind me!!

Kiwipaul

That is correct. How about changing the mortgage to intrest only that way all your payments will be tax deductable (and it's the most efficient for an investment property).
Can you claim depreciation on properties in the uk?? and their contents, carpets, central heating, fitted kitchen, etc??

paddyo

I'm looking into changing my Mortgage into Interest only...but I am already halfway through and feel a slight reticence to lose all of its increased value and sale value. Bit of a rock and a hard place at the moment.
The problem is I do not have enough for a deposit over here and am 50, getting a brand new mortgage from scratch makes me nervous.

Kiwipaul

I don't understand your reluctance to change to a intrest only mortgage as you don't loose anything. It dosn't affect the value of the property it just maximises your tax deductions and minimises your costs, it's a win win.
If you are half way through your mortgage it means that a significent part of your payments are capital in nature and not tax deductable and so only paying interest on the balance of the mortgage outstanding will mean a significent reduction in your monthly costs.

paddyo

er....but if I switch to Interest Only then I will still have whats left of the Repayment at the end of the term, i.e. I will have less capital at the end. Am I missing something here? For example, a mortgage is 200000, is have re-payed 100000 (just figuratively speaking here and not realistic) so far. If I switch to a Interest Only mortgage then at the end of the term I can sell the house but still owe 100000 of the repayment loan?

paddyo

oh TE....have hijacked your thread here a bit...apologies!