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tax implications on renting out house in uk?

tax implications on renting out house in uk?

Old Jan 19th 2005, 12:27 pm
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Default tax implications on renting out house in uk?

Hello there!
Off we go in 2mths , house still not sold , have some people we trust who want to rent our place in the uk.
Realize the 6mth rule on transferring assets, if by any miracle our house rises in value are you taxed just on the increase in value from when leave the uk. Tell me you are not taxed on the whole original value of the house that you bring into Oz!!
I also believe you are taxed on the earnings from the monthly rent but if you are just covering your mortgage and costs you are not earning from it?
I know there are many threads on this but have just started to look down this ave and have not had time to look yet as I am off to work in a few mins .
Regards windsurfer uk
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Old Jan 19th 2005, 12:43 pm
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Default Re: tax implications on renting out house in uk?

Originally Posted by windsurfer uk
Hello there!
Off we go in 2mths , house still not sold , have some people we trust who want to rent our place in the uk.
Realize the 6mth rule on transferring assets, if by any miracle our house rises in value are you taxed just on the increase in value from when leave the uk. Tell me you are not taxed on the whole original value of the house that you bring into Oz!!
I also believe you are taxed on the earnings from the monthly rent but if you are just covering your mortgage and costs you are not earning from it?
I know there are many threads on this but have just started to look down this ave and have not had time to look yet as I am off to work in a few mins .
Regards windsurfer uk

Now Im no expert but Im sure Alan Collett put something on about an exemption from the 6 month rule if you were renting your house out in the uk, something like a 5,6 or 7 year exemption from CGT when you eventually sell it. Come on Alan I know you are there, just remind us.

Andy
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Old Jan 19th 2005, 1:01 pm
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Default Re: tax implications on renting out house in uk?

Originally Posted by windsurfer uk
Hello there!
Off we go in 2mths , house still not sold , have some people we trust who want to rent our place in the uk.
Realize the 6mth rule on transferring assets, if by any miracle our house rises in value are you taxed just on the increase in value from when leave the uk. Tell me you are not taxed on the whole original value of the house that you bring into Oz!!
I also believe you are taxed on the earnings from the monthly rent but if you are just covering your mortgage and costs you are not earning from it?
I know there are many threads on this but have just started to look down this ave and have not had time to look yet as I am off to work in a few mins .
Regards windsurfer uk

hi
yes there is a 6 year exemption on tax if you sell it, as long as you dont buy another in aus......

I am renting out mine and i dont have to pay tax on the rent as i am out of the UK, so i rang the inland rev and got a tax exemption form, i believe you can get these on line also.

hope this helps

good luck

laura
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Old Jan 19th 2005, 1:11 pm
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Default Re: tax implications on renting out house in uk?

Don't have to pay tax on the rent????? I wish... You may have got a tax exemption form which allows agents not to deduct tax at source but the rent is still taxable and you you are required to declare it both on your Australian and British tax returns. Sorry if this dissapoints you. I know of no way British rental income can be untaxed but if someone knows something I don't --- do tell us all.

Cheers


Originally Posted by lauralollipop
hi
yes there is a 6 year exemption on tax if you sell it, as long as you dont buy another in aus......

I am renting out mine and i dont have to pay tax on the rent as i am out of the UK, so i rang the inland rev and got a tax exemption form, i believe you can get these on line also.

hope this helps

good luck

laura
x
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Old Jan 19th 2005, 1:32 pm
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Default Re: tax implications on renting out house in uk?

Originally Posted by Ian12
Don't have to pay tax on the rent????? I wish... You may have got a tax exemption form which allows agents not to deduct tax at source but the rent is still taxable and you you are required to declare it both on your Australian and British tax returns. Sorry if this dissapoints you. I know of no way British rental income can be untaxed but if someone knows something I don't --- do tell us all.

Cheers

oh well maybe its because i am a student and i am only receiving £4025 rent per year??? I was told i didnt have to pay tax and that the inland rev will send me a certificate or something, the agency is sorting it for me.

I also will declaire it in aussie tax returns but the mortgage is same as rent so there will be no profits made, so surely i wont have to pay aussie tax aswell???

i am confused now?

laura
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Old Jan 19th 2005, 1:52 pm
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Default Re: tax implications on renting out house in uk?

This is the site you need for the UK tax form.
http://www.inlandrevenue.gov.uk/cnr/nr_landlords.htm#2
I am just making it out myself.

Although I now live full time in Aus I believe as a subject of the Commonwealth I will be eligible to a UK personal tax allowance.

My only UK income will be rental funds and those will probably not fully cover my mortgage and insurances especially if as a landlord I have maintenance and upkeep bills coming in on my property.

I am renting in Aus so my UK house although rented out is still classed as my main residence. My understanding is that the 6 month rule for Aus taxation would only kick in from the date I sold the house. Tax would be assessed on that sales value against any gain (or loss) when actually transferring the funds to Aus at a later date.

BTW, don't forget to claim a tax rebate when leaving the UK.
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Old Jan 19th 2005, 1:57 pm
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Default Re: tax implications on renting out house in uk?

thanks Bix

I thought so, I was begining to panic then, as i am leaving on the 30th and thought this was all sorted out.

PHHHEEWWW!


Yes yours is same as mine, as i will be renting while in aus and my house will still be my main residence.

i am gonna ring the tax office now and chase it up, as i sent off the form before xmas.....

take care

laura
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Old Jan 19th 2005, 2:04 pm
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Default Re: tax implications on renting out house in uk?

hello

just to confirm, i have rang the tax office and I wouldnt be eligle to pay UK as under the threashold.

Good luck to you if you do decide to rent out your place.

laura
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Old Jan 19th 2005, 2:07 pm
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Default Re: tax implications on renting out house in uk?

Originally Posted by Ian12
Don't have to pay tax on the rent????? I wish... You may have got a tax exemption form which allows agents not to deduct tax at source but the rent is still taxable and you you are required to declare it both on your Australian and British tax returns. Sorry if this dissapoints you. I know of no way British rental income can be untaxed but if someone knows something I don't --- do tell us all.

Cheers

Deduct expenses, and then deduct the UK personal allowance. If you're a British citizen you can have this even if resident in Australia.

And any UK tax you do pay can normally be deducted against Australian tax due.

Jeremy
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Old Jan 19th 2005, 2:17 pm
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Default Re: tax implications on renting out house in uk?

Originally Posted by JAJ
Deduct expenses, and then deduct the UK personal allowance. If you're a British citizen you can have this even if resident in Australia.

And any UK tax you do pay can normally be deducted against Australian tax due.

Jeremy
That has confused me

I understood that I would recieve tax credits from the UK and then pay Australian tax on my pension etc.

Are you suggesting that I will only be liable for Australian tax on the amount above the usual personal UK tax allowance...and still recieve the first $6000 as a tax free allowance in Australia as the ATO does not tax the first $6000 income?

G
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Old Jan 19th 2005, 2:23 pm
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Default Re: tax implications on renting out house in uk?

Originally Posted by windsurfer uk
Hello there!
Off we go in 2mths , house still not sold , have some people we trust who want to rent our place in the uk.
Realize the 6mth rule on transferring assets, if by any miracle our house rises in value are you taxed just on the increase in value from when leave the uk. Tell me you are not taxed on the whole original value of the house that you bring into Oz!!
I also believe you are taxed on the earnings from the monthly rent but if you are just covering your mortgage and costs you are not earning from it?
I know there are many threads on this but have just started to look down this ave and have not had time to look yet as I am off to work in a few mins .
Regards windsurfer uk
Hi windsurfer,
I am not sure but I was told that if you are non resident in the UK for a whole tax year then you are allowed to take up to £9,000.00 tax free from a UK point of view, not sure about the oz side of things, but why not have the rent paid into a UK account linked with a visa card you can use in oz and have paid on d/d from the rental income and just dont tell the oz tax people.
Regards Rob
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Old Jan 19th 2005, 2:31 pm
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Default Re: tax implications on renting out house in uk?

Originally Posted by pogsy
Hi windsurfer,
I am not sure but I was told that if you are non resident in the UK for a whole tax year then you are allowed to take up to £9,000.00 tax free from a UK point of view, not sure about the oz side of things, but why not have the rent paid into a UK account linked with a visa card you can use in oz and have paid on d/d from the rental income and just dont tell the oz tax people.
Regards Rob

The first part of what you post is factually inaccurate and the final point is illegal.

Grayling - I'm not sure what you're trying to get at but usually the bottom line is that if you live in Australia, you pay Australian tax on worldwide income. UK tax is usually not due, and if it is, it can usually be offset against your Australian tax bill.

But there are exceptions and you really need professional advice if still confused.

Jeremy
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Old Jan 19th 2005, 2:44 pm
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Default Re: tax implications on renting out house in uk?

Originally Posted by JAJ
The first part of what you post is factually inaccurate and the final point is illegal.

Grayling - I'm not sure what you're trying to get at but usually the bottom line is that if you live in Australia, you pay Australian tax on worldwide income. UK tax is usually not due, and if it is, it can usually be offset against your Australian tax bill.

But there are exceptions and you really need professional advice if still confused.

Jeremy
I had taken advice Jeremy and was under the impression that once I had claimed tax credits in the UK I would be liable to Australian tax on all my income.
I did not assume I would still get a UK tax allowance but simply a credit for the tax I would have been liable for.

G
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Old Jan 19th 2005, 2:46 pm
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Default Re: tax implications on renting out house in uk?

Originally Posted by Grayling
I had taken advice Jeremy and was under the impression that once I had claimed tax credits in the UK I would be liable to Australian tax on all my income.
I did not assume I would still get a UK tax allowance but simply a credit for the tax I would have been liable for.

G
I meant on my whole income. Not my income after UK tax allowance

G
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Old Jan 19th 2005, 3:34 pm
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Default Re: tax implications on renting out house in uk?

Originally Posted by JAJ
The first part of what you post is factually inaccurate and the final point is illegal.

Grayling - I'm not sure what you're trying to get at but usually the bottom line is that if you live in Australia, you pay Australian tax on worldwide income. UK tax is usually not due, and if it is, it can usually be offset against your Australian tax bill.

But there are exceptions and you really need professional advice if still confused.

Jeremy
The first part of what you post is factually inaccurate and the final point is illegal.
Hi Jeremy
The quote above is not entirley factually inaccurate, what I meant was that a house in joint names gives you two personal allowances of at present £9,430.00 tax free rental income (assuming there is no other UK income earned) as for the not telling the oz tax authorities, only passing on what I know goes on anyway. Never said it was the correct thing to do did I.

Regards Rob
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