Change in tax law: losses on UK property rental now deductible in Australia
 

Given the present housing market in the UK, I'm sure this will be of interest to a few migrants:
http://www.gomatilda.com/news/article.cfm?articleid=463

Best regards.

Re: Change in tax law: losses on UK property rental now deductible in Australia
 

Thanks for the info Alan.

Just to see if I understand it correctly, if you're mortgage was £800 but your rent was only £700 you would be able to claim the loss of £100 against your income tax in Aus. If this is correct, could it reduce amount of income tax you pay per month or would it just be claimed and repaid at the end of the year in one go?

Re: Change in tax law: losses on UK property rental now deductible in Australia
 

WOW! This is QUITE a change. This means that I can get back 35% of ALL losses incurred on my investments outside of Australia. Not bad as the previous laws took Capital Gains Tax but I could not claim any losses. Nice!:thumbsup:

Re: Change in tax law: losses on UK property rental now deductible in Australia
 

Remember that these provisions do not apply to capital losses - only losses of an income nature.

Take professional advice if you are unsure what this means.

Best regards.

Re: Change in tax law: losses on UK property rental now deductible in Australia
 

The claim for a deduction due to overseas losses would be made on the end of year income tax return, leading to a one off repayment after the return has been submitted to the ATO.

Best regards.

Re: Change in tax law: losses on UK property rental now deductible in Australia
 

Just a pointless question but theoretically, if your property in the UK was up for rental for 6 months but no-one rents it does that mean that you can offset the entire costs of the house as a rental property (interest on mortgage, management and maintenance costs, etc) in your Australian return ?

Re: Change in tax law: losses on UK property rental now deductible in Australia
 

I understand 100%. I mis-stated the losses. I meant ALL income losses. Interest and management fees, costs etc. This is still a HUGH change which will make keeping my property in the UK all the more worth it! :thumbup:

Now.. lets just hope the capital losses don't rip me a new one... :blink:

Re: Change in tax law: losses on UK property rental now deductible in Australia
 

Possibly - maybe even probably. I'd have to look into this ...

Best regards.

Re: Change in tax law: losses on UK property rental now deductible in Australia
 

Cheers Alan.

More specifically if you had been renting it up for a year up until say January and decided to put it on the market, thus making it hard to rent, although now you're about to put it back on the rental market, etc. Could that period of non-rental while attempting to sell be seen as a loss on the rental income ?

Re: Change in tax law: losses on UK property rental now deductible in Australia
 

Not sure I wholly follow the question, but to adopt a phrase from PM Questions: I refer the honourable gentleman to my previous answer! :)

In other words, I have to refrain from getting involved in too technical an exchange on a forum, as I have a business to run!

Best regards.

Re: Change in tax law: losses on UK property rental now deductible in Australia
 

Already have mate, and the advice seems well worth the cost. We have also recommended your services to lots of people, including a few today as it just so happens.

Re: Change in tax law: losses on UK property rental now deductible in Australia
 

So, the big question. Why is the Aus tax man and by proxy the Aus tax payer subsidising* UK (foreign) renters?


* If you don't understand what I mean by subsidising. The reason Aussie rents are low in comparison to the cost of the investment mortgage is because of negative gearing. If the government got rid of negative gearing then rents would rise. The landlords are not going to subsidise the tenants out of their own pockets.

Re: Change in tax law: losses on UK property rental now deductible in Australia
 

Who cares, this is great news! :thumbsup:

Re: Change in tax law: losses on UK property rental now deductible in Australia
 

if you were planning to rent out and keep a residential mortage on the hush would this still be justified?

Re: Change in tax law: losses on UK property rental now deductible in Australia
 

Swings and roundabouts though isn't it? Seeing as if you own a house in the UK where the rent income is more than the interest and maintenance payments, you would have to pay Australian tax on the 'income'. It's only fair you get the relief back when it works the other way. Especially as rental income on the UK house is still taxable in the UK as well, even if you are no longer resident.