Bryher

Hi,

We have decided to rent out our property in the uk when we go to nz (at least for a year or two). Can anyone give us some idea of the tax implications. Have read some threads on oz regarding this, but is nz the same?
Also, does anyone know a Professional accountant either in the uk or nz who would have knowledge of both uk/nz tax that we could consult? (We do have an accountant but he does not seem to know much about anything!).

Bryher.

Kiwipaul

DON'T EVEN READ ABOUT OZ TAXES as they are totally different to NZ taxes.
One plus is in NZ their is no CGT and so any capital gain you make on the house is tax free in NZ (but watch out for UK taxes as some will still apply even when resident in NZ).

I don't own any property in UK and so cannot really help but you will have to do 2 lots of tax returns each year, one for NZ and one for UK.

Don

You will be liable for tax, assessed on your rental income, in both UK and NZ.

In UK you will still receive the single person's allowance. This should mean you pay no UK tax if you arrange things correctly. Eg you could own the house 50/50 with your partner, you would get 2 single person's allowances. Or up the mortgage so that the interest cancels out the net income.

In NZ you will need to declare the rental income and you'll be taxed on it (less the allowable expenses) but the double taxation agreement means you won't pay the same tax twice.

CGT - none payable in UK provided you remain non UK resident for 5 complete tax years.

Kiwipaul

This will help you avoid paying tax in UK, but the NZ taxman dosn't recognise the UK tax free allowance if you are tax resident in NZ and so he will tax you on all your UK income as you will have no tax credit from the UK.

BUT you might be able to claim depreciation of your UK house in NZ (never heard of the concept untill I came to NZ of a house dropping in value for tax purposes). I just don't know wether you can claim NZ depreciation of a house in UK where it is not allowed (well wasn't when I was their).

So with both the UK Tax free allowance and NZ depreciation you might get away with it. But you need to take professional advise as I'm no tax expert.

Bryher

Thanks guys, you've been really helpful.

Can't really get to grips with it all though, so still looking for an 'expert' to sort it all out for us. Too many other things to sort out at the moment - going in September!

Have P.R. but haven't booked the flights yet, don't know where we're going, no jobs, and no accommodation booked, two whinging teenagers, oh - now THREE whinging teenagers (daughters boyfriend wants to come with us!!) = this is going to be SOME big adventure!!!

Bryher