Pete39

Hi all,
I hope someone might help, are there members in the forum that can give advice one to one re tax matters concerning letting in Aus but resident in the UK?
Thanks in advance

BleughBleugh

Have a nose at the below, I asked a similar question
Property Taxes - From AU to UK

To add extra information,
AU and UK have a bilateral tax agreement, so, simplistically speaking, your AU income will be added to your UK income and subject to tax depending on your tax brackets....

For me,
Due to the mortgage relief being stopped and my wife's non-domecile status entering year 7, the additional tax we have to pay due to our AU property is equivalent to more than half of my take-home pay
My wife as 75% property owner and Non domecille didnt' have to pay tax (on 75% of the AU income)
Me, a British Citizen had to pay tax on 25% of the income)

We're now moving back to AU before the next financial year in April
was either that, or move back for > 6 months, sell everything, move back, then there's all the complex capital gains tax stuff to work out!

rammygirl

not quite. The income from the house will be taxed by the ATO with Australian allowances at a flat rate of non resident (the whole amount) you then report those figures to the UK and they assess the income using Uk rules but allow for monies paid to the ATO. At that point you may need to pay more, however any loss cannot be offset against earned income in the same way in the UK.
You will need to do a tax return in both countries.

We did this, not for investment but because we wanted to move back and we now live in the property. We did not have a mortgage and although we paid more tax it was worth it. Get yourself a dual qualified accountant, they will pay for themselves…….


Ken and Alan Collett both post on here but there are others out there.

Pete39

Thanks both for the replies. So it seems if I have understood correctly that as a non resident:
*we file an AUS tax return
*there is no tax free threshold
*we pay tax at 32% on all income after expenses
*we file a second UK tax return
*we may have to pay additional tax but more likely as basic rate tax payers we will not be refunded for tax paid in AUS
​​​​Is that about it in simple terms? Do I have to apply for a tax file number I guess to be able to file a return?
thanks again

rammygirl

Yes that is about right. No idea about the TFN you normally have to be in Australia to be issues one. As I said best to get an accountant as the deductions for letting in Aus are very different to UK and you will save money.
Do you already have the house (inherited perhaps) ? If not are you aware of the restrictions and additional costs of being a foreign buyer?

I assumed you had at least lived in Australia and maybe intended to return, if so you will already have a TFN.

BleughBleugh

it's the 'after expenses' thing that's vague - UK no longer allows mortgage relief - whereas AU does....
i.e. in Oz, if your rental is $1000 a week, and mortgage is $1000 a week, you have no effective income

HMRC sent us a Mahooosive bill and verbally stated some stuff that seems not strictly true - that we're taxed in full on the income of $1000 a week, with minimal deductions allowed....
i.e. we'd need to pay 25-45% depending on tax bracket of that $1000 a week

we declared the wife non-dom and 75% owner to avoid the bulk of it... both that and mortgage relief has run out now, so, we're moving back

would be good to hear experience of someone who's actually gone through it all, no actual numbers needed, just percentage!