Alan Collett

Don't overlook the tax consequences if you retain any of the investments you have noted once you become a tax resident of Australia ... what works from a tax planning perspective when you cease to be tax resident in the UK often doesn't work once you become a tax resident of Australia.

Best regards.

CreditCardKing

Yes you are right about this, If you generate a foreign income loss then you can only offset this loss against future foreign income. You must declare the net foreign income to the Australian tax office.

Foreign losses
If, after working through steps 1 and 2, your deductible expenses incurred in relation to a category of foreign income exceed your foreign income for that category, you have made a foreign loss in that category equal to the excess. You will need to keep a record of any losses you have incurred in each category. These foreign income losses cannot be deducted from Australian source assessable income and can only be carried forward to offset assessable foreign income in the same category derived in a later income year.

Example

After working through steps 1 and 2, Colin had the following:

foreign interest income A$1,000
foreign rent income of A$2,000 and expenses (not including debt deductions) of A$4,000, creating a loss of A$2,000.
He will declare foreign interest income of $1,000. Colin will need to keep a record of the $2,000 rental loss. This loss can only be used to offset modified passive income (including foreign rental income) derived in later years.

If, after working through steps 1 and 2, you have not made a loss in a particular category of foreign income, then you may choose to use any tax losses of earlier income years incurred in deriving Australian income to offset that foreign income. See Foreign source income - Australian tax losses of earlier years.

Alan Collett

Note that a restructured borrowing arrangement can increase the tax deduction position though - ie if you arrange the borrowing in Australia (eg secured against a property in Australia) the interest costs then become capable of a deduction under the general rules for deductions.

Best regards.

Elvira

Just wanted to say that renting out your house can work. We have let ours for the past 4 years without any major problems. However, the first thing you have to do is check that there is a market for your kind of property, particularly in the current slow market.

The important thing is to do your homework and make sure the house is in top nick, i.e. neutral colours throughout and quality appliances that work. Also a reliable agent or a friend or relative to look after things in your absence. Now the former can be tricky to find; interview all potential candidates carefully, ask a lot of questions and don't discount your gut instinct. I would say that finding someone reliable is probably the key.

The other important thing is to be very careful about who you are letting to. We have at one time preferred to let our house stand empty for over 2 months rather than let it to 'sharers'. (I would stay clear of those - heard too many horror stories...)

I have found the "Property - Practical" discussion board at the Motley Fool invaluable. It's full of experienced landlords who are always willing to give advice: go to www.fool.co.uk.

All the best,

lynnbrooks

Thanx for all the various replies so far.....
I'm finding it hard to get my head around what 'creditcardking' sais,but it sounds very good advice and the advice about getting a reliable agent/relative is good too.

I do think though,that with all the different wranglings and risks involved,we are gearing towards selling...there is something more clearcut and simplier to do this yet i can't help but wonder if in later years,would we want to come back to the u.k. ,then find we have been out-marketed.
Hoping we will want to just stay in Oz....anyone else having these conflicting feelings?