Letting UK property whilst in Oz
 

Hi all,

there must be loads of people in the same boat as me - letting out out your UK property whilst living in Australia.

There seems to be some very complicated tax issues re letting out the UK property - HMRC call it the 'non resident landlord scheme' and they have provided an 88 page document to explain it!

It involves (obviously) paying them tax and also me (the landlord) deducting tax from the rent I collect (although you can apply for approval to receive rent without tax deducted. All very complicated.

So my question is:- What does everyone else do? Do you go through this whole process or do you just ignore - recieve rent/pay mortgage and that's it?

Advice on this minefield would be v.appreciated!

Cheers!

Naomi

Re: Letting UK property whilst in Oz
 

Don't forget you will be liable for australian tax on the rental income.

Unless you are on certain temporary visas.


Don't be tempted to try and evade paying tax.....the penalties can be severe.

Re: Letting UK property whilst in Oz
 

Surely if the rent just covers your mortgage then are you not ok?! Tax wise?!

Re: Letting UK property whilst in Oz
 

I have a flat in the south of England (no mortgage) and rent it out. I applied for approval to receive rent without tax deducted, which I received but with a caveat that I could be taxed in the future if tax laws change. I kept open a UK account for any monies earned in the UK.

When you are in Australia I don't think you are taxed on the UK rental income (what's it got to do with the ATO) unless you are remitting it to Australia where you are resident.

Re: Letting UK property whilst in Oz
 

You may be able get tax allowance against the interest payments and expenses but not against capital repayments.

G

Re: Letting UK property whilst in Oz
 

Unless you are some temporary visas you are liable for australian tax on your worldwide income.....including any income from the UK or elsewhere.

G

Re: Letting UK property whilst in Oz
 

Sorry but it has nothing to do with whether it is remitted to Australia or not. If you are a resident for Australian tax purposes the ATO wants its share:thumbdown:

The best way to minimise your Aust tax on the rental income is to try and achieve a "break even" situation or suffer a loss which you can offset against your Aust tax on S&W income.

HTH

Re: Letting UK property whilst in Oz
 

You may get your rental income without tax deducted (NRL1), but that does not mean you don't have to submit a UK self assessment each year and depending upon your rental "profit", you may have to pay UK tax on it each year.

Re: Letting UK property whilst in Oz
 

Complete an NRL1 form & submit

submit a UK self assessment tax return each year

rental on the income side,

mortgage interest, insurance, agents fees, corgi costs etc on the costs side (and the 10% wear & tear allowance.

Gives you a "profit" which is UK taxable. You have your UK allowances to set against it so if it is less that 6K you have no tax, after that its 20%.

I would guess (this is the way it works for the US) that the Aus guys will also want their chance to tax you - so you will probably treat it like a property let out in Aus (in terms of what you can deduct etc) but if you have paid any UK tax you can deduct this.