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Moving to Canada maintaining mortgaged home in UK not renting can I claim deduction

Moving to Canada maintaining mortgaged home in UK not renting can I claim deduction

Old Jul 9th 2010, 5:14 pm
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Default Moving to Canada maintaining mortgaged home in UK not renting can I claim deduction



Moving to Canada maintaining mortgaged home in UK not renting can I claim deduction from my Canadian Income, if not if I rent house out for one month can the other eleven months be a loss or negative income??? I intend to fly home as frequently as possible as well I want to maintain my status as resident of England???
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Old Jul 9th 2010, 8:03 pm
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Default Re: Moving to Canada maintaining mortgaged home in UK not renting can I claim deducti

Originally Posted by confused.co.uk.ca


Moving to Canada maintaining mortgaged home in UK not renting can I claim deduction from my Canadian Income, if not if I rent house out for one month can the other eleven months be a loss or negative income??? I intend to fly home as frequently as possible as well I want to maintain my status as resident of England???
The answer to your question depends on whether you are tax resident in the UK or Canada. You can't be resident for tax purposes in both at the same time.

Can you give us more information about why you will be in Canada and if you have a spouse and children where they will be living?
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Old Jul 10th 2010, 8:36 am
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Default Re: Moving to Canada maintaining mortgaged home in UK not renting can I claim deducti

I will be working in Canada full time but will get about three months a year off. I am no longer married and no one will occupy the English home when I am in Canada. I was however looking at Revenue Canada's tax forms and they say I must clain income form England including Rental Income on property. That's why I was wondering if I can claim a loss on the house because it is an expense (the Mortgage and Utilities which are used) so If I rent the house for one month that would not cover the years mortgage costs or utilities and would create a net loss or negative income. If I have to pay tax on income than surely I can claim a loss on negative income?????
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Old Jul 10th 2010, 3:46 pm
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Default Re: Moving to Canada maintaining mortgaged home in UK not renting can I claim deducti

In most countries, you can only offset mortgage interest against rental income on the same property.
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Old Jul 10th 2010, 4:58 pm
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Default Re: Moving to Canada maintaining mortgaged home in UK not renting can I claim deducti

Originally Posted by confused.co.uk.ca
I will be working in Canada full time but will get about three months a year off. I am no longer married and no one will occupy the English home when I am in Canada. I was however looking at Revenue Canada's tax forms and they say I must clain income form England including Rental Income on property. That's why I was wondering if I can claim a loss on the house because it is an expense (the Mortgage and Utilities which are used) so If I rent the house for one month that would not cover the years mortgage costs or utilities and would create a net loss or negative income. If I have to pay tax on income than surely I can claim a loss on negative income?????
So let's assume you will be tax-resident or deemed tax resident in Canada. In that case any rental income in the UK is taxable in Canada, and any rental loss allowable.

If you have no rental income the house is classed as personal use property and you cannot claim any expenses against your Canadian income.

If you have some rental income you will probably get away with claiming the full cost of maintaining your UK home for a while. Many rentals are run at a loss in the first years and only produce taxable income as the mortgage is paid down.

There are limitations to the expenses you can claim. They must be:

a) incurred to produce taxable income and
b) be reasonable in the circumstances.

If you incur rental losses year after year someone is going to question if these expenses are actually intended or expected to ever produce taxable income. On this basis, or because they are unreasonable with regard to the income they produce, the expenses will be denied. They will most probably be denied retroactively.

Of course, you know that you have no expectation of producing taxable income from your UK house so in all good conscience you should not attempt to claim the costs of keeping it.
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Old Jul 12th 2010, 6:38 pm
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Default Re: Moving to Canada maintaining mortgaged home in UK not renting can I claim deducti

Just to point out it is VERY difficult to get buidlings insurance for empty houses in UK........................
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Old Jul 15th 2010, 2:25 pm
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Default Re: Moving to Canada maintaining mortgaged home in UK not renting can I claim deducti

Thanks for the wise advice
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