Go Back  British Expats > Living & Moving Abroad > Australia
Reload this Page >

Tax in Australia - Declaring Foreign Income

Tax in Australia - Declaring Foreign Income

Old Sep 26th 2012, 2:00 am
  #1  
Just Joined
Thread Starter
 
Joined: Sep 2012
Posts: 1
Arm50 is an unknown quantity at this point
Default Tax in Australia - Declaring Foreign Income

Hi,

I'm living in Australia on a temporary visa (457) but am a permanent resident for tax purposes. According to the ATO, this means I don't have to claim any foreign income (http://www.ato.gov.au/individuals/co...tent/76537.htm) in Australia, but does anyone know if I can? I have losses in my rental properties overseas that I was hoping to offset in Australia.

Any comments would be appreciated!

Thanks
Arm50 is offline  
Old Sep 26th 2012, 2:49 am
  #2  
BE Forum Addict
 
bingobob777's Avatar
 
Joined: Aug 2010
Location: Not Brisbane
Posts: 1,210
bingobob777 has a reputation beyond reputebingobob777 has a reputation beyond reputebingobob777 has a reputation beyond reputebingobob777 has a reputation beyond reputebingobob777 has a reputation beyond reputebingobob777 has a reputation beyond reputebingobob777 has a reputation beyond reputebingobob777 has a reputation beyond reputebingobob777 has a reputation beyond reputebingobob777 has a reputation beyond reputebingobob777 has a reputation beyond repute
Default Re: Tax in Australia - Declaring Foreign Income

Originally Posted by Arm50
Hi,

I'm living in Australia on a temporary visa (457) but am a permanent resident for tax purposes. According to the ATO, this means I don't have to claim any foreign income (http://www.ato.gov.au/individuals/co...tent/76537.htm) in Australia, but does anyone know if I can? I have losses in my rental properties overseas that I was hoping to offset in Australia.

Any comments would be appreciated!

Thanks
do you think you should pay less tax in Australia because you made a loss abroad?

The answer is no.
bingobob777 is offline  
Old Sep 26th 2012, 8:31 am
  #3  
Forum Regular
 
Joined: Jul 2012
Posts: 52
StSabre is an unknown quantity at this point
Default Re: Tax in Australia - Declaring Foreign Income

This page would suggest that if the income is non-assessable in Australia then you can't claim the associated expenses (and therefore the loss): http://www.ato.gov.au/individuals/co...tm&page=10&H10
StSabre is offline  
Old Sep 26th 2012, 9:53 am
  #4  
BE Forum Addict
 
lesleys's Avatar
 
Joined: Dec 2003
Location: Gold Coast Hinterland
Posts: 2,359
lesleys has a reputation beyond reputelesleys has a reputation beyond reputelesleys has a reputation beyond reputelesleys has a reputation beyond reputelesleys has a reputation beyond reputelesleys has a reputation beyond reputelesleys has a reputation beyond reputelesleys has a reputation beyond reputelesleys has a reputation beyond reputelesleys has a reputation beyond reputelesleys has a reputation beyond repute
Default Re: Tax in Australia - Declaring Foreign Income

Go to the bottom of that web page and click on general questions.

The answer is still No.
lesleys is offline  
Old Sep 26th 2012, 10:02 am
  #5  
Lost in BE Cyberspace
 
Bermudashorts's Avatar
 
Joined: Feb 2009
Location: UK
Posts: 14,284
Bermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond repute
Default Re: Tax in Australia - Declaring Foreign Income

Originally Posted by Arm50
Hi,

I'm living in Australia on a temporary visa (457) but am a permanent resident for tax purposes. According to the ATO, this means I don't have to claim any foreign income (http://www.ato.gov.au/individuals/co...tent/76537.htm) in Australia, but does anyone know if I can? I have losses in my rental properties overseas that I was hoping to offset in Australia.

Any comments would be appreciated!

Thanks
Well talk about wanting it both ways! I expect you would not be asking if you could pay tax that is.

Why are you making losses on a property anyway, are you not charging enough rent? It doesn't take much to cover mortgage interest in UK these days. It makes far mor sen to restructure your investments so that they make money rather than expect Australia to pick up the tab.
Bermudashorts is offline  
Old Sep 28th 2012, 12:23 am
  #6  
Social Grenade Thrower
 
paddyo's Avatar
 
Joined: Jan 2008
Location: South Coast, NSW
Posts: 3,625
paddyo has a reputation beyond reputepaddyo has a reputation beyond reputepaddyo has a reputation beyond reputepaddyo has a reputation beyond reputepaddyo has a reputation beyond reputepaddyo has a reputation beyond reputepaddyo has a reputation beyond reputepaddyo has a reputation beyond reputepaddyo has a reputation beyond reputepaddyo has a reputation beyond reputepaddyo has a reputation beyond repute
Default Re: Tax in Australia - Declaring Foreign Income

Originally Posted by Bermudashorts
Well talk about wanting it both ways! I expect you would not be asking if you could pay tax that is.

Why are you making losses on a property anyway, are you not charging enough rent? It doesn't take much to cover mortgage interest in UK these days. It makes far mor sen to restructure your investments so that they make money rather than expect Australia to pick up the tab.
OK, I can add something here because I am in a similar position. My UK mortgage payments are 1100 pounds a month, my rental income in only 750 pounds a month. Its not because I am not charging enough its because that is the rental rate for a two bedroom house where it is and because I went for a prime location and a high mortgage percentage.
So , it DOES take much to cover a mortgage payment in UK if your circumstances are different.
On to the tax aspect. As a Temp Resident, although full resident for tax purposes, I was not liable to declare any foreign income. But, at the same time I could not claim any offsets against any foreign losses, totally fair in my opinion. Now, however, as my Tax Advisor has determined, as a PR I AM liable for ALL earnings, foreign and Australian, and CAN use my rent/mortgage loss as an offset. There is an example of this on the ATO website and we had a small thread on this a few months back.
paddyo is offline  
Old Sep 28th 2012, 2:22 am
  #7  
Lost in BE Cyberspace
 
Bermudashorts's Avatar
 
Joined: Feb 2009
Location: UK
Posts: 14,284
Bermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond repute
Default Re: Tax in Australia - Declaring Foreign Income

Originally Posted by paddyo
OK, I can add something here because I am in a similar position. My UK mortgage payments are 1100 pounds a month, my rental income in only 750 pounds a month. Its not because I am not charging enough its because that is the rental rate for a two bedroom house where it is and because I went for a prime location and a high mortgage percentage.
So , it DOES take much to cover a mortgage payment in UK if your circumstances are different.
You are paying GBP 1,100 a month in mortgage interest?

.
Bermudashorts is offline  
Old Sep 28th 2012, 2:41 am
  #8  
BE Forum Addict
 
bingobob777's Avatar
 
Joined: Aug 2010
Location: Not Brisbane
Posts: 1,210
bingobob777 has a reputation beyond reputebingobob777 has a reputation beyond reputebingobob777 has a reputation beyond reputebingobob777 has a reputation beyond reputebingobob777 has a reputation beyond reputebingobob777 has a reputation beyond reputebingobob777 has a reputation beyond reputebingobob777 has a reputation beyond reputebingobob777 has a reputation beyond reputebingobob777 has a reputation beyond reputebingobob777 has a reputation beyond repute
Default Re: Tax in Australia - Declaring Foreign Income

Originally Posted by Bermudashorts
You are paying GBP 1,100 a month in mortgage interest?

.
No, he's actually paying back the mortgage, god forbid.

Can't wait to see "investors" faces in 15years time when they realise that they house they bought post 2005 is only worth what they paid for it and that they need to sell their retirement fund.
bingobob777 is offline  
Old Sep 28th 2012, 3:48 am
  #9  
Lost in BE Cyberspace
 
Bermudashorts's Avatar
 
Joined: Feb 2009
Location: UK
Posts: 14,284
Bermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond repute
Default Re: Tax in Australia - Declaring Foreign Income

Originally Posted by bingobob777
No, he's actually paying back the mortgage, god forbid.

Can't wait to see "investors" faces in 15years time when they realise that they house they bought post 2005 is only worth what they paid for it and that they need to sell their retirement fund.
Well if it is the mortgage it is not tax deductible and therefore quite probably is making a profit, which is now taxable.
Bermudashorts is offline  
Old Sep 28th 2012, 3:52 am
  #10  
BE Forum Addict
 
bingobob777's Avatar
 
Joined: Aug 2010
Location: Not Brisbane
Posts: 1,210
bingobob777 has a reputation beyond reputebingobob777 has a reputation beyond reputebingobob777 has a reputation beyond reputebingobob777 has a reputation beyond reputebingobob777 has a reputation beyond reputebingobob777 has a reputation beyond reputebingobob777 has a reputation beyond reputebingobob777 has a reputation beyond reputebingobob777 has a reputation beyond reputebingobob777 has a reputation beyond reputebingobob777 has a reputation beyond repute
Default Re: Tax in Australia - Declaring Foreign Income

Originally Posted by Bermudashorts
Well if it is the mortgage it is not tax deductible and therefore quite probably is making a profit, which is now taxable.
the 1100 will be the payment for a repayment mortgage, combining payment of interest and repaying the loan.
bingobob777 is offline  
Old Sep 28th 2012, 3:55 am
  #11  
Lost in BE Cyberspace
 
Bermudashorts's Avatar
 
Joined: Feb 2009
Location: UK
Posts: 14,284
Bermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond reputeBermudashorts has a reputation beyond repute
Default Re: Tax in Australia - Declaring Foreign Income

Originally Posted by bingobob777
the 1100 will be the payment for a repayment mortgage, combining payment of interest and repaying the loan.
Yes, that is what I assumed and why i questioned it.

And as such it is not tax deductible, only the interest is tax deductable and therefore it is quite possible that Paddyo is not in a loss making position at all.
Bermudashorts is offline  
Old Sep 28th 2012, 3:57 am
  #12  
BE Forum Addict
 
bingobob777's Avatar
 
Joined: Aug 2010
Location: Not Brisbane
Posts: 1,210
bingobob777 has a reputation beyond reputebingobob777 has a reputation beyond reputebingobob777 has a reputation beyond reputebingobob777 has a reputation beyond reputebingobob777 has a reputation beyond reputebingobob777 has a reputation beyond reputebingobob777 has a reputation beyond reputebingobob777 has a reputation beyond reputebingobob777 has a reputation beyond reputebingobob777 has a reputation beyond reputebingobob777 has a reputation beyond repute
Default Re: Tax in Australia - Declaring Foreign Income

Originally Posted by paddyo
OK, I can add something here because I am in a similar position. My UK mortgage payments are 1100 pounds a month, my rental income in only 750 pounds a month. Its not because I am not charging enough its because that is the rental rate for a two bedroom house where it is and because I went for a prime location and a high mortgage percentage.
So , it DOES take much to cover a mortgage payment in UK if your circumstances are different.
On to the tax aspect. As a Temp Resident, although full resident for tax purposes, I was not liable to declare any foreign income. But, at the same time I could not claim any offsets against any foreign losses, totally fair in my opinion. Now, however, as my Tax Advisor has determined, as a PR I AM liable for ALL earnings, foreign and Australian, and CAN use my rent/mortgage loss as an offset. There is an example of this on the ATO website and we had a small thread on this a few months back.
have you signed the form with your letting agent to stop you being taxed on the rental income in the UK?

you can only use any loss from comparing payment of interest vs income from rent, repayment of principal loan can't be used in the calculations.

if you have a repayment mortgage costing 1100, you're probably breaking even
bingobob777 is offline  
Old Sep 28th 2012, 5:30 am
  #13  
Social Grenade Thrower
 
paddyo's Avatar
 
Joined: Jan 2008
Location: South Coast, NSW
Posts: 3,625
paddyo has a reputation beyond reputepaddyo has a reputation beyond reputepaddyo has a reputation beyond reputepaddyo has a reputation beyond reputepaddyo has a reputation beyond reputepaddyo has a reputation beyond reputepaddyo has a reputation beyond reputepaddyo has a reputation beyond reputepaddyo has a reputation beyond reputepaddyo has a reputation beyond reputepaddyo has a reputation beyond repute
Default Re: Tax in Australia - Declaring Foreign Income

Originally Posted by bingobob777
have you signed the form with your letting agent to stop you being taxed on the rental income in the UK?

you can only use any loss from comparing payment of interest vs income from rent, repayment of principal loan can't be used in the calculations.

if you have a repayment mortgage costing 1100, you're probably breaking even
Yes, Form N1 I think it is, all signed!
I'm not sure I grasp your second point right, my Tax adviser told me that from now I can claim an offset as my property is making a deficit and so my foreign income is affected by it. E.G. I am declaring 750 per month rental income but actually paying out 1100 per month to run it...thereby at a loss.
I did ask about this a few months back and the general consensus was in agreement with my Tax adviser.
paddyo is offline  
Old Sep 28th 2012, 5:57 am
  #14  
BE Forum Addict
 
bingobob777's Avatar
 
Joined: Aug 2010
Location: Not Brisbane
Posts: 1,210
bingobob777 has a reputation beyond reputebingobob777 has a reputation beyond reputebingobob777 has a reputation beyond reputebingobob777 has a reputation beyond reputebingobob777 has a reputation beyond reputebingobob777 has a reputation beyond reputebingobob777 has a reputation beyond reputebingobob777 has a reputation beyond reputebingobob777 has a reputation beyond reputebingobob777 has a reputation beyond reputebingobob777 has a reputation beyond repute
Default Re: Tax in Australia - Declaring Foreign Income

Originally Posted by paddyo
Yes, Form N1 I think it is, all signed!
I'm not sure I grasp your second point right, my Tax adviser told me that from now I can claim an offset as my property is making a deficit and so my foreign income is affected by it. E.G. I am declaring 750 per month rental income but actually paying out 1100 per month to run it...thereby at a loss.
I did ask about this a few months back and the general consensus was in agreement with my Tax adviser.
what type of mortgage do you have?

repayment or interest only?
bingobob777 is offline  
Old Sep 28th 2012, 6:03 am
  #15  
Social Grenade Thrower
 
paddyo's Avatar
 
Joined: Jan 2008
Location: South Coast, NSW
Posts: 3,625
paddyo has a reputation beyond reputepaddyo has a reputation beyond reputepaddyo has a reputation beyond reputepaddyo has a reputation beyond reputepaddyo has a reputation beyond reputepaddyo has a reputation beyond reputepaddyo has a reputation beyond reputepaddyo has a reputation beyond reputepaddyo has a reputation beyond reputepaddyo has a reputation beyond reputepaddyo has a reputation beyond repute
Default Re: Tax in Australia - Declaring Foreign Income

er......good question and well phrased, unfortunately the answer is not within my grasp at this time!!
I think its Interest....or it could be Repayment....sorry, can't remember off hand!
Is that the difference then? You can't claim offset on the repayment but you can claim offset against the interest , if it is higher than the rental return?
paddyo is offline  

Contact Us - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service -

Copyright © 2024 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.