Shoan and Rich

We are moving to Perth in just over 3 weeks and have decided to rent our UK property and the tenant moves in the same day we leave.
Has anyone on here done this able to give me a little guidance on the inland revenue side of things, I have been staring at the forms for hours but can't get my head round what the rental expence/ incone ??
I have got so much to do right now and this ILR stuff is doing my head in !!
I don't even understand how the tax year works . my head is like a bag of mince at the moment .
How inconcideatate of HM R & C to expect me to fill in forms at such a busy time
Any advice or experience would be amazing right now

Shona

mark213

Then you havent dealt with the ATO yet either who will want to know all the little details of your uk rental. I would seek some professional advise if you want a proper answer as getting this wrong is costly. Try Alan Collette of GoMatilda or search this forum - i'm sure its come up.

Others here on have done it, and may have something, but I realized it was a no-goer for me once i realised how much agencies take, remote maintennance, rent collection and then the wonderful world of trying to ascertain your tax liability on top.

Not a too helpful post for you but I personally would ask a professional as I have not idea what i would have done.

BAY

Are you using a letting agent ? If so they should advise you what to do. Basically there is one form (IR 87 I think) whereby if you fill it in you won't get charged income tax ... but will then need to declare it to the Aussie taxman .. fair enough. You declare to the ATO your rental income minus any expenses (Loan Interest ,insurance, ground rent, service charges,costs of providing services which are included in the rent e.g. water, gas ,accounting and legal costs ,costs of repairs, renovation and redecoration,agents fees) ie. you get taxed on your profit.

benlast

Bay's comments echo my understanding of the issues. I believe also that if you make a loss on your letting you can offset that against tax that you pay in Oz. And from the UK tax point of view you can also offset all the costs of letting; I don't think there's a significant difference in whether you get the income taxed in the UK or Oz (though I haven't looked into that in close detail). You'll need to fill out the "non-resident landlord" form.

We (and other emigrant family members) are letting out our houses in the UK. In our case, the income will pretty much equal the outgoings (including agents fees, maintenance and an allowance to cover a number of months without a tenant per year) but (in my opinion) it's worth it rather than have to sell the house in a static market with falling prices. If you're working out whether it works for your financially, take into account possible equity gains if you can keep it and rent it out for several years.

Cheers
b

paddyo

I moved out here in March, on a 457 visa for 3 years. We have rented out our property in UK through an agent. Small village, local agent, good comms with them. We filled in a form NRL1 from the HMRC, one for each of us, which means as a non domicile we do not get taxed on our rental income. At present it has no effect whatsoever with the ATO here, they are not interested and it has no bearing on my tax commitments here. However, from next year, any LOSS I suffer from my UK rental can be offset on to my Oz earned income up to a limit. Our rental does not cover our mortgage anyway but also the agents fees and any work we have done can all be used to offset your tax, again, this only comes into effect next year. The go matilda website has more info on this.

h2oskineil

If you rent it....

Get an NRL1 from for the tax office. That way you'll receive 100% of the rent, without the form the renatl agent must (by law) deduct income tax from the rent.
http://www.hmrc.gov.uk/cnr/nr_landlords.htm

Check out Rent insurance, to cover the rent if the tenant cannot pay. They will pay the rent for as long as it takes to get the house back so that it can be rented again. I think we pay about 250 GBP per year.
www.letsure.co.uk

Check out British gas Home Care to cover all your plumbing, electrics, central heating etc.
We had the central heating control pack up last year and the boiler before that... Well worth the money.
http://www.britishgas.co.uk/products...down-care.html

Recommend you use an agent (that you know is good). Our agent sends the money on time every month and telephones with any problems or questions.

My Tax accountant suggested I work out how much income I have received from the property
Deduct all the expenses, rental agent, insurance, maintenance 1 X flight to the UK to check on the property (if the property is in joint name you claim 1 X flight each).
If you can show you made a loss, then this is a tax deduction which can be claimed for. It's called negative gearing here in Oz.

Neil.

horace

Oh dear.
If you learn nothing else today remember this...

Landlords LET and tenants RENT.

Additionally landlords do not RENT OUT. Landlords LET.

h

Shoan and Rich

Thank you for pointing out the error of my ways, I stand corrected.

As you will have noticed whilst kindly proof reading my post that I also mention I am
3 weeks away from emigrating or is that migrating? I’m sure you’ll let me know, and my head currently feels substantially laden with meat produce.

I will however endeavour to obey language rules and refrain from grammatical error.


Oh and thought you might like this one -

Pedant • noun a person excessively concerned with minor detail or with displaying technical knowledge

paddyo

Wow....you have added so much to this thread.....I feel enlightened by your verbiage and you are truly a lexicon of reason. Or, as my uncouth friends in Sarf Landon might say...what a cock!!

horace

>> paddyo.

People like you who fail to appreciate the correct meaning of common words may find it a very costly mistake.

If you fail to comprehend simple words, for example, those used in warnings on cartons of household bleach and other hazardous products and indeed REVERSE the meanings, as Shoan and Rich have done (LET / RENT), may rue the day they fell to sleep in their english lesson.

paddyo, here is a tip. Don`t drink bleach.


Has the penny dropped?

h


By the way your feeble attempt, in your last sentence, to hurl abuse in my direction is of course dismissed with the comtempt it rightly deserves.

paddyo

Horace.......your explanation was not what I was really referring to, it was your complete arrogance in the way it was presented. We are all on here to help each other, so do try and be a helpful human, really. As for my feeble attempt, yes actually it does deserve contempt, but your derisory attempt at correction to someones english rather inflamed me!!

Be nice when pointing out peoples errors, you may even find people will start to like you!

DownUnderPaddy

Actually, until a recent visit to the immigration museum in Adelaide, I never understood the subtle differences in all of these terms.
Here they are :

An emigrant leaves their land to live in another country. The person is emigrating to another country. An immigrant is a person who once resided somewhere else and now lives in your country.
So someone from Europe who once was an emigrant is now a European immigrant in Australia.

Think of E for exiting, and I for incoming :-)

Migration generally refers more to moving regions within a country in search of work.

At the immigration museum, the differentiation between immigrant and settler was harder to qualify, but was mainly distinguished by time.
i.e. The immigrant, after 20 years of living in Australia, was now a settler....

jimbo3030

I came across this thread when trying to find out how ruinously expensive renting/letting/hiring* our UK property would be, so thanks to those who have added useful info about that.

I was very much amused by Horace's pedantry, and then the vehemence of his response.** I was even more amused when I looked up the word "rent" in the OED:

rent1
• noun 1 a tenant’s regular payment to a landlord for the use of property or land. 2 a sum paid for the hire of equipment.

• verb 1 pay someone for the use of. 2 let someone use (something) in return for payment.

Look, Horace. It appears as though landlords *can* rent (i.e. let someone use their property in return for payment) to a tenant.

Ooops.

* Delete as you see fit.

** Look, Horace! An "and" after a comma!

horace

Oh dear >>> jimbo3030 !!

You have shot yourself in the foot on this one haven`t you son!

Shall I give you a clue?
I think I should as you are obviously out of your depth on this topic. Try looking up the word `let` in the OED.

When you do, you may be in a position to make an informed judgement. Well one would hope so.


By the way, if you cock up in a simple thing like rent / let god help your clients.

LOL

h

Zambia

Let out or Rent out it really makes no difference to the overall aim of the thread.

See h2oskineil's post as a excellent example of a well informed person helping others.

See yours as a wedantic panker farting against the wind.

Wise up.