Advice needed on letting our house in UK
Oct 13th 2003, 6:28 pm
#1
Just Joined
Thread Starter
Joined: Sep 2003
Location: Norwich, uk
Posts: 5
Advice needed on letting our house in UK
OK I know a similar thread has probably been on before, but here goes.
We got our Visa, through in August and have until June to be there, but our house still has not sold, and with the Ozy dollar as it is, and the house price bubble yet to burst in Oz, we are considering letting our house. We will have to re mortgage it so we have some back up money to take with us, until we decide to sell. But how do we stand with Tax, do we get taxed in the UK or Oz and i have heard we also get clobbered for capital gains tax. Has any one been through this already, and can give us some good advice.
Best of luck all new Ozy's
Tom and Jo
We got our Visa, through in August and have until June to be there, but our house still has not sold, and with the Ozy dollar as it is, and the house price bubble yet to burst in Oz, we are considering letting our house. We will have to re mortgage it so we have some back up money to take with us, until we decide to sell. But how do we stand with Tax, do we get taxed in the UK or Oz and i have heard we also get clobbered for capital gains tax. Has any one been through this already, and can give us some good advice.
Best of luck all new Ozy's
Tom and Jo
Oct 13th 2003, 6:30 pm
#2
BE Forum Addict
Joined: Jun 2003
Location: Mandurah WA
Posts: 1,395
I seem to remember reading that you do get clobbered with tax.
Sure that others will know more about it.
Whisky
Sure that others will know more about it.
Whisky
Oct 13th 2003, 6:39 pm
#3
BE Enthusiast
Joined: May 2003
Location: Renting in Port Kennedy Perth
Posts: 447
I asked the same question - Montfort replied that you pay captital gains tax on the difference in value from when you emigrated to when you sell - may be worth getting a valuation before you go.
We are in the same boat - we are going to validate in December - hubby not keen to rent this house out - we have spent alot of money on the internal stuff & he is concerned that it may get wrecked (those that rent may not look after it like you would) and then when we go to sell god knows how much will be knocked off the value. So we are looking for another house that has potential but is in a rentable state - that way if things do not work out in Oz we will have something to come back to - if we stay we can rent indefinately.
Wish someone would come & sort all these predicaments out for us!!!
We are in the same boat - we are going to validate in December - hubby not keen to rent this house out - we have spent alot of money on the internal stuff & he is concerned that it may get wrecked (those that rent may not look after it like you would) and then when we go to sell god knows how much will be knocked off the value. So we are looking for another house that has potential but is in a rentable state - that way if things do not work out in Oz we will have something to come back to - if we stay we can rent indefinately.
Wish someone would come & sort all these predicaments out for us!!!
Oct 13th 2003, 9:06 pm
#4
Happy Daddy
Joined: Aug 2003
Location: Dodgey West Midlands , UK
Posts: 1,312
Hi pockygoes
I plan to do the same as you guy's. But the house I'm in at the moment is fairly new so is suitable for renting. I think it all depends on who rents it and who you have as an agent.
I think you will also have to pay tax on your earnings from the letting, depending on how much you rent it for. (in the UK and use tax allowance in the Uk.)
I like the idea of having something to come back to if things do not work out in Oz.
The income will also be usefull.
Any views from those more knowledgeable?
Bye all
Markeh
I plan to do the same as you guy's. But the house I'm in at the moment is fairly new so is suitable for renting. I think it all depends on who rents it and who you have as an agent.
I think you will also have to pay tax on your earnings from the letting, depending on how much you rent it for. (in the UK and use tax allowance in the Uk.)
I like the idea of having something to come back to if things do not work out in Oz.
The income will also be usefull.
Any views from those more knowledgeable?
Bye all
Markeh
Dec 21st 2003, 12:39 pm
#5
Forum Regular
Joined: Dec 2003
Posts: 94
IF YOU ARE AN EXISTING CLIENT YOU SHOULD HAVE ALREADY DEALT WITH THESE AND OTHER ISSUES AS THEY WOULD HAVE BEEN CONSIDERED IN YOUR CONSULTATION - IF YOU ARE AN EXISTING CLIENT PLEASE ADVISE ASAP.
Oh dear!
I think there has been a misinterpretation - this is not right for everybody.
Care must be taken by reading into a response that the advice we give to one is the same for another - it depends on the property, its purchase date, its value, who owns it, the mortgage, etc.
Please be careful - there can be tax on the mortgage when it is re-paid.
This is a big subject.
Always, always take advice. You cannot tell the authorities you had something different on your date of residency - especially if its the wrong ownership and valuation etc and was sold on teh wrong day - there are UK and Australian tax issues and it depends on the individuals circumstances.
Oh dear!
I think there has been a misinterpretation - this is not right for everybody.
Care must be taken by reading into a response that the advice we give to one is the same for another - it depends on the property, its purchase date, its value, who owns it, the mortgage, etc.
Please be careful - there can be tax on the mortgage when it is re-paid.
This is a big subject.
Always, always take advice. You cannot tell the authorities you had something different on your date of residency - especially if its the wrong ownership and valuation etc and was sold on teh wrong day - there are UK and Australian tax issues and it depends on the individuals circumstances.
Dec 21st 2003, 12:42 pm
#6
Guest
Posts: n/a
Originally posted by gld
IF YOU ARE AN EXISTING CLIENT YOU SHOULD HAVE ALREADY DEALT WITH THESE AND OTHER ISSUES AS THEY WOULD HAVE BEEN CONSIDERED IN YOUR CONSULTATION - IF YOU ARE AN EXISTING CLIENT PLEASE ADVISE ASAP.
Oh dear!
I think there has been a misinterpretation - this is not right for everybody.
Care must be taken by reading into a response that the advice we give to one is the same for another - it depends on the property, its purchase date, its value, who owns it, the mortgage, etc.
Please be careful - there can be tax on the mortgage when it is re-paid.
This is a big subject.
Always, always take advice. You cannot tell the authorities you had something different on your date of residency - especially if its the wrong ownership and valuation etc and was sold on teh wrong day - there are UK and Australian tax issues and it depends on the individuals circumstances.
IF YOU ARE AN EXISTING CLIENT YOU SHOULD HAVE ALREADY DEALT WITH THESE AND OTHER ISSUES AS THEY WOULD HAVE BEEN CONSIDERED IN YOUR CONSULTATION - IF YOU ARE AN EXISTING CLIENT PLEASE ADVISE ASAP.
Oh dear!
I think there has been a misinterpretation - this is not right for everybody.
Care must be taken by reading into a response that the advice we give to one is the same for another - it depends on the property, its purchase date, its value, who owns it, the mortgage, etc.
Please be careful - there can be tax on the mortgage when it is re-paid.
This is a big subject.
Always, always take advice. You cannot tell the authorities you had something different on your date of residency - especially if its the wrong ownership and valuation etc and was sold on teh wrong day - there are UK and Australian tax issues and it depends on the individuals circumstances.
AND SHOUTING AT PEOPLE?
Dec 21st 2003, 5:06 pm
#7
BE Enthusiast
Joined: Sep 2003
Location: Banks Peninsula, SI, NZ
Posts: 373
Heh, gld. Top marks for stating the obvious.
Having property in the UK is a good idea for many reasons. Have a word with your local letting agent and find out how much you can expect and also what other properties are available in the area like yours, and how long they have been vacant.
If you have a large house you may want to sell and buy 2 smaller ones as they seem to let easier.
Re. the income tax: It will only be on the net amount less expences incurred on the property like maintenance, etc. If you have a lot of equity in your property you may want to consider re-mortgaging to get the mortgage amount up so you can offset the rental income and limit your tax liability.
You will be taxed in ozz on your world-wide income (subject to double-taxation), so you will get taxed on your income, less expenses. Provided you file your P85 on departure from the UK, you will receive your rental income gross (less VAT). They are expecting you to declare in your country of residence ozz.
CGT. If you sold in the UK prior to moving I don’t think you will have any as it has been your primary residence. If you sell at some point after you will on the difference in ozz. If however, you never sell you won’t have to face that one.
If you want to then sell later look at your options to minimise CGT which are many.
Anyway, do your own research, etc but that should give you a little to start with.
Montford-> I understand the temptation to advertise on here but you would do better not to be so blatant, as you will only alienate potential clients.
Having property in the UK is a good idea for many reasons. Have a word with your local letting agent and find out how much you can expect and also what other properties are available in the area like yours, and how long they have been vacant.
If you have a large house you may want to sell and buy 2 smaller ones as they seem to let easier.
Re. the income tax: It will only be on the net amount less expences incurred on the property like maintenance, etc. If you have a lot of equity in your property you may want to consider re-mortgaging to get the mortgage amount up so you can offset the rental income and limit your tax liability.
You will be taxed in ozz on your world-wide income (subject to double-taxation), so you will get taxed on your income, less expenses. Provided you file your P85 on departure from the UK, you will receive your rental income gross (less VAT). They are expecting you to declare in your country of residence ozz.
CGT. If you sold in the UK prior to moving I don’t think you will have any as it has been your primary residence. If you sell at some point after you will on the difference in ozz. If however, you never sell you won’t have to face that one.
If you want to then sell later look at your options to minimise CGT which are many.
Anyway, do your own research, etc but that should give you a little to start with.
Montford-> I understand the temptation to advertise on here but you would do better not to be so blatant, as you will only alienate potential clients.
Dec 21st 2003, 5:39 pm
#8
Guest
Posts: n/a
bearing in mind that you still get a UK personal allowance : as my mortgage is 500 odd quid, and the rent was only 650, by the time I deduct mortgage interest, monthly maintenance, estate agents fees (tenant finding service) and factor in 4.5K of allowance my tax bill will be almost zip..
Badge
PS Of course, as I was out of the UK for a complete FY a few years ago I had no other income..
Badge
PS Of course, as I was out of the UK for a complete FY a few years ago I had no other income..
Last edited by badgersmount; Dec 21st 2003 at 6:43 pm.
Dec 21st 2003, 6:12 pm
#9
BE Enthusiast
Joined: Sep 2003
Location: Banks Peninsula, SI, NZ
Posts: 373
... Exactly. you want to try and get your rental income down as much as possible if you exceed your income-tax threshhold elsewhere (i.e. full time job).
At the end of the day it's all about capital gains on the property rather than the rental income.
You may find you are re-mortgaging periodically to keep the rental income down.
At the end of the day it's all about capital gains on the property rather than the rental income.
You may find you are re-mortgaging periodically to keep the rental income down.
Dec 22nd 2003, 8:08 am
#10
Forum Regular
Joined: Dec 2003
Posts: 94
As regards the property issues and the tax the variables that affect the answer are:
a) Date of purchase
b) Ownership
c)
a) Date of purchase
b) Ownership
c)
