MMY

Hi I'VE GOT A DILEMMA I have permanent residency pcv 143. The problem is I can't sell my house in England, I will have to rent it out for at least a year.
The Estimated Rental income is £15000.00 Per Year. Will I have to do a tax return and pay any tax in England. Also will I have to do a tax return in Australia as with my pension and interest on savings which i am taking to Auss to put in a saving account, Hope Someone can Help me i have spoken to a accountant in uk he said that on the uk income tax will be deducted by the estate agent he wasn't sure about Auss taxes but said there may be a Tax liability has any one encountered this type of problem thanks for reading any help appreciated, MMY

Keith Moon

Mate,

Taxes and Death, there's no getting around them, i feel your pain brother.

Do a search function on tax savings, property, theres tons on info on here.

If it moves they will tax it, if it don't they will still try!

Keith

Bermudashorts

You should find a better accountant in the UK if they have told you estate agent will deduct the taxes without telling you what to do about that.

There are loads of threads on here about tax on UK rental income, try a search. In a nutshell, you should arrange to receive your rental income in UK gross. You will need to do tax returns in both countries but there is a double taxation agreement in place which will ensure you do not pay tax twice on the same income.

MartinLuther

Aus is the same as the UK in that permanent residents pay tax on their worldwide income. Aus has a double taxation agreement with the UK so that any tax paid to the UK is taken into account as a credit in Aus (i.e. they don't take that amount again).

killerhales

You can offset the income with all the various expenses, such as mortgage interest, agents fees, insurance, maintenance. Take a look at NAT 1729 on the ATO website. You declare the total amounts on your Aus tax return.

You can apply to HM Revenue & Customs to receive your rental gross. You may still have to eventually pay tax but as others have said, you don't have to pay tax twice.

It's worth searching around for a good agent to manage things for you. You pay about 10% + VAT, but it will be well worth your while.

Good luck

JAJ

No such thing as "can't sell" ... you just need to ask the price that buyers are willing to pay.

Deancm_MKII

That's what tax havens and off-shore bank accounts are for. Death still gets ya though.

MMY

Hi everyone thanks for your helpful replies I will have to find an accountant in auss All things new are daunting Thanks again. MMY

JAJ

Unless you are planning to illegally evade tax, these don't make much difference for someone living in a jurisdiction which taxes worldwide income.

Cape Blue

You need to complete an NRL1 so the estate agent does not have to withhold the tax at source - even if they do wwithholdthe tax you will need to do an annual self-assessment tax return. You can deduct agents fees, any mortage interest, insurance, 10% wear & tear, gas, elec and energy effy tests and so on and if the "profit" is less than your annual allowance (around GBP7,000) you are not paying any UK tax (subject to other UK income you have).

I assume you have completed the P85.

In Aus you will also be likely to have to do the same calculation (obviously without the UK allowance) and will add the profit to your Aus income and be taxed on it - if you did pay any UK tax you can deduct it from the amount you pay in Aus - you'll have to look up the dual tax agreement.

ABCDiamond

Does a permanent resident of Australia still get the UK tax free threshold ?

MartinLuther

Yes.

ABCDiamond

I just had some good ideas, but then realised it wouldn't make it work, as it would still be taxed in Australia... oh well....

paulry

Can anyone recommend a good agent who can deal with these matters at a reasonable price?

Thanks

paulry

My head hurts . Realising that the agent I was considering hiring might not meet/deliver on expectations, I've considered working out all the right financial decisions myself to minimise tax liabilty, etc. But the sites (for information) found so far by Google search seem to raise more questions than answers .

What's needed is a electronic "wizard" in the form of a clickable multiple choice questionaire and a "Submit" button which (for a reasonable fee) causes the computer to churn out the sequence of steps leading to a happy ending. ....If only life were that easy .