Kingseat

We're heading to Perth on Student Visas later this year.

We will be selling our home but we have several rental properties here in Scotland. I am assuming during the 2 years that we are students the rental income should continue to be declared in the UK or do we declare it in Australia? I don't think I need to complete a non-resident landlords form with the Inland Revenue because we will still be resident in the UK - just in OZ on temporary visas.

Can't seem to find an answer and I called a couple of people about this but they've not returned my call.

Thank you.

mkp

Hi Kingseat
In my opinion, you will be temporary tax residents in Australia, based on your time in Australia (2 years) and visa class. Although temporary, you are still a tax resident. You may very well remain tax resident in the UK, should you spend an average of 91 days pa in the UK over a four year period.
I understand that form NRL1 is required by anyone who leaves the UK for 6 months or more at a time, irrespective of tax residency.
UK sourced rental income is always taxed in the UK. You will only pay Australian tax on such income if you hold a permanent visa (and also get a tax credit for UK tax paid).
Hope that helps. Perth is great.
mkp

ABCDiamond

Check the Residency test at http://www.ato.gov.au/individuals/co...tent/36255.htm

I think you will be classed as Tax resident, in which case : However: When you have dual residency, any relevant double tax agreements may determine your country of residence for tax purposes and which country has taxing rights over certain classes of income to prevent double taxation. In some cases, this may have the effect of limiting Australia’s taxing rights.

Foreign income : http://www.ato.gov.au/content/33664.htm

pumpkin blossom

Yep, as a student you are considered 'resident for tax purposes'. No idea how that works tax wise for you though.

Umpatan

Why even tell the Aussies about your rental income in the UK? You keep the money in the bank account in the UK, and just do debit card withdraws in Australia. Debit card withdraws gives you a favorable exchange rate than if you take cash and do currency conversion. You are only spending the money in Australia, so it is none of their business. Now, the UK exchange rate is poor at this time, but double taxation would cost you more. (43% for those on visa I heard, even if you are only making 14 dollars per hour!!!!) That should be what someone with a six figure income should be paying, not someone who works for McDonald's!!!

To tax that much to someone on low income regardless of nationality is just criminal. (They are like pirates!)

ABCDiamond

The actual higher tax rates are 40% and 45%, but you need to be earning $80,000 per year for the 40% rate, or $180,000 per year to each the 45% rate.

That would be 247 hours per week at $14 per hour, to reach that tax rate

If you were earning $14 ph and did 38 hours per week, you would end up paying 11.7% of your income in tax.

Work part time and do only 19 hours per week, (earn $266 pw) and you pay zero tax.

It isn't as bad as you seem to think.

Umpatan

Yeah, that is if you are an Aussie. Not if you are on a working visa.

Lewis2

"Yep, as a student you are considered 'resident for tax purposes'. No idea how that works tax wise for you though"

But can you work on a student visa???

ABCDiamond

I am not an Aussie, and those rates apply to me.

It also applies to anyone that is classed as Tax resident, and this does not mean with a resident visa only. It also applies to many other visas.

A person that is NON tax resident would pay the following rates:
Therefore your $14 per hour earner, even if they did 46 hours per week, would still only pay 29% tax. Even 110 hours per week and it would still only be 30% tax.


A NON Tax resident earning $200,000 pa will pay $72,660 in tax (ie: 36.33%)

earn $300,000 pa and they pay $117,660 or 39.22%
earn $869,000 pa and they pay $373,710 or 43.00% which is the rate you say is payable for someone earning $14 per hour.

ABCDiamond

Student Visa
From 26 April 2008, people granted a Student Visa will automatically receive permission to work with their visa grant. Most student visa holders will no longer need to apply separately in Australia for permission to work.

pumpkin blossom

LOL, yes, with restrictions.