Probably like a number of others on here, we live in Oz, but still have our house in the UK as an investment property, which given the very low mortgage rates (we pay 1.4% on an interest only mortgage) is generating a positive income after deductions.

I was hoping for a bit of guidance on how to declare the income on my ATO e-Tax return and potentially if it's possible to streamline the tax hit by changing the ownership from 50/50 to 100% in my wife's name (or find a route to increase our deductions).

In terms of the current ATO return, which is due next month, can someone just confirm that I need to declare my 50% share of the UK income and deductions (converted to $AUD)? The income share I receive in the UK is below the £7k personal allowance, so no tax is payable in the UK, but presumably will get added on top of my Australian income to be taxed at highest marginal rate :-(?

Also assuming my understanding above is correct - going forward, has anyone gone down the path of moving their share of a UK house into their wife's name to move all of the income on to her tax return (my wife is just below the 37% bracket and I'm in the 45% in Oz). I'm not too sure on the outright merits of this given there will be transactional costs associated with change of ownership (and the mortgage), and the 100% income will push my wife above the £7k personal allowance in the UK, so she'll presumably need to pay 20% on the excess too.

I'd welcome any thoughts on this, or ways of increasing the deductions..?

As it stands, with joint ownership you should both declare 50% of the income and expenses on both of your tax returns. This is regardless of what tax you pay in the uk, if you do pay tax in the uk then you show the tax paid as a credit, you do not just omit the income.

Changing ownership of the house to save a bit of tax seems like a sledgehammer to crack a walnut to me.

No you cannot just pretend that the house is owned by one of you, that is called tax fraud.

If you are no longer resident in UK and not present there for the relevant number of days in the tax year, are you sure you are entitled to your full personal allowance?

Yes definitely entitled if a British citizen anyway.

and it went up to 8K this year

if you're on a 457 you don't have to declare it or pay Oz tax on it.

Otherwise you do and as you said it is added to your Oz income and taxed at the top rate you pay. If you change the ownership it would have a knock on effect for family tax credit because your wife's income would double. The the capital gains tax too if you sell it later would be affected but not sure if that would be to your benefit or detriment. I'd be interested to know if you figure it all out because we're in the same situation.