Tax on UK rental
#1
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Joined: Sep 2005
Location: Gold Coast
Posts: 1,343
Tax on UK rental
Good morning England and Good evening Australia.
Sorry if this question has been asked before, but after doing a search I am still no wiser.
We, like many others are struggling to sell our house. We have decided to rent it out instead.
My question is, how much tax will we have to pay in Australia for doing this?
We will be charging £575 per month.
Thanks in anticipation of any replies.
Sorry if this question has been asked before, but after doing a search I am still no wiser.
We, like many others are struggling to sell our house. We have decided to rent it out instead.
My question is, how much tax will we have to pay in Australia for doing this?
We will be charging £575 per month.
Thanks in anticipation of any replies.
#2
Re: Tax on UK rental
Good morning England and Good evening Australia.
Sorry if this question has been asked before, but after doing a search I am still no wiser.
We, like many others are struggling to sell our house. We have decided to rent it out instead.
My question is, how much tax will we have to pay in Australia for doing this?
We will be charging £575 per month.
Thanks in anticipation of any replies.
Sorry if this question has been asked before, but after doing a search I am still no wiser.
We, like many others are struggling to sell our house. We have decided to rent it out instead.
My question is, how much tax will we have to pay in Australia for doing this?
We will be charging £575 per month.
Thanks in anticipation of any replies.
You only pay tax on any gain you make. So say you pay charge $1000 rent, pay $500 mortgage and $200 Insurance your taxable gain would be $300 pounds per month, which would be added to your taxable income.
If you were to charge $1000 per month rent, pay $750 mortgage and $300 insurance you would be able to claim the $50 loss against your taxable income.
Of course, this is all really basic and I would suggest you speak to someone like Alan Collett who knows about tax in both the UK and Australia for some professional advice. Or wade through the UK tax site and the ATO site (some light reading for you http://www.hmrc.gov.uk/cnr/nr_landlords.htm )
Last edited by Wendy; Jan 15th 2009 at 10:11 am.
#3
Re: Tax on UK rental
Good morning England and Good evening Australia.
Sorry if this question has been asked before, but after doing a search I am still no wiser.
We, like many others are struggling to sell our house. We have decided to rent it out instead.
My question is, how much tax will we have to pay in Australia for doing this?
We will be charging £575 per month.
Thanks in anticipation of any replies.
Sorry if this question has been asked before, but after doing a search I am still no wiser.
We, like many others are struggling to sell our house. We have decided to rent it out instead.
My question is, how much tax will we have to pay in Australia for doing this?
We will be charging £575 per month.
Thanks in anticipation of any replies.
You will need to request Non-Resident Landlord status from HMRC (NRL1 form). You will still need to submit a UK tax Return each each and include ALL income from your rental and get your accountant to deduct all expense related to this rental as a tax deduction. You are likely to be under the tax threshold in the UK, but you will still need to submit it. Then you will need to submit a tax return in Australia and include this UK income in that too, however any tax you pay in the UK will be taken into account in Australia so you don't pay twice.
Hope this helps
Al
#4
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Joined: Mar 2007
Location: Brisbane
Posts: 835
Re: Tax on UK rental
Good morning England and Good evening Australia.
Sorry if this question has been asked before, but after doing a search I am still no wiser.
We, like many others are struggling to sell our house. We have decided to rent it out instead.
My question is, how much tax will we have to pay in Australia for doing this?
We will be charging £575 per month.
Thanks in anticipation of any replies.
Sorry if this question has been asked before, but after doing a search I am still no wiser.
We, like many others are struggling to sell our house. We have decided to rent it out instead.
My question is, how much tax will we have to pay in Australia for doing this?
We will be charging £575 per month.
Thanks in anticipation of any replies.
#5
Re: Tax on UK rental
for the record HSBC did not require us to change to a "rental mortgage" or the like. All they required was to be informed, which we did in person during a meeting with the bank manager.
#6
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Joined: Sep 2005
Location: Gold Coast
Posts: 1,343
Re: Tax on UK rental
Thanks for all the information.
(Hellllloooo Wendy, well I think we will be on our way in a few months, finally , but can't wait. I will do some reading soon, thanks for the link).
We are on interest only and the Building society have said that it is fine to rent. All we have to do is fill in a form and pay the £225 admin fee.
Makes a change for something to seem straight forward for a change, especially where tax is concerned!
All we need to do now is save up lots of pennies and we are on our way!
(Hellllloooo Wendy, well I think we will be on our way in a few months, finally , but can't wait. I will do some reading soon, thanks for the link).
We are on interest only and the Building society have said that it is fine to rent. All we have to do is fill in a form and pay the £225 admin fee.
Makes a change for something to seem straight forward for a change, especially where tax is concerned!
All we need to do now is save up lots of pennies and we are on our way!
#7
Re: Tax on UK rental
If you get a tax agent to help you with your first return (someone who knows both UK and Aus tax) you can deduct their fee from your taxable income the following year
And if you get a really good one, there probably won't be much tax to pay anyway - or you may even make a loss
#8
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Joined: Sep 2005
Location: Gold Coast
Posts: 1,343
Re: Tax on UK rental
I admire your patience! I think I would have gone mental by now.
If you get a tax agent to help you with your first return (someone who knows both UK and Aus tax) you can deduct their fee from your taxable income the following year
And if you get a really good one, there probably won't be much tax to pay anyway - or you may even make a loss
If you get a tax agent to help you with your first return (someone who knows both UK and Aus tax) you can deduct their fee from your taxable income the following year
And if you get a really good one, there probably won't be much tax to pay anyway - or you may even make a loss
#9
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Joined: Mar 2007
Location: Brisbane
Posts: 835
Re: Tax on UK rental
Yes you can do it from here. Sounds like you may even have no tax to pay on yours. We make £7800 profit at present due to being on a mostly interest only, UK base rate +0.19% mortgage. Even then we will probably have only a couple $$$ dollars in tax to pay. We will be getting Alan Collett to do our first UK and OZ returns this year. Costs a few bucks but worth it for us being tax return virgins!.
#10
Re: Tax on UK rental
Yes you can do it from here. Sounds like you may even have no tax to pay on yours. We make £7800 profit at present due to being on a mostly interest only, UK base rate +0.19% mortgage. Even then we will probably have only a couple $$$ dollars in tax to pay. We will be getting Alan Collett to do our first UK and OZ returns this year. Costs a few bucks but worth it for us being tax return virgins!.
Just gonna add that the tax year ends on June 30th here
#13
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Thread Starter
Joined: Sep 2005
Location: Gold Coast
Posts: 1,343
Re: Tax on UK rental
Yes you can do it from here. Sounds like you may even have no tax to pay on yours. We make £7800 profit at present due to being on a mostly interest only, UK base rate +0.19% mortgage. Even then we will probably have only a couple $$$ dollars in tax to pay. We will be getting Alan Collett to do our first UK and OZ returns this year. Costs a few bucks but worth it for us being tax return virgins!.
Thanks, we might arrive just after that then to give us another year
Even if we are not going back?