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-   -   Tax advice on my UK property (https://britishexpats.com/forum/new-zealand-83/tax-advice-my-uk-property-855018/)

britinauckland Mar 22nd 2015 5:27 am

Tax advice on my UK property
 
Hi,

I now live in Auckland and am still renting my house out in the UK.

I have a couple of questions, hopefully someone is in the same boat and can help answer this.

Firstly, my UK Tax obligations. I need to complete a UK tax return. What should be my answer to this question? I'm not sure whether I am claiming the remittance basis. If I put yes, I get hit with a tax bill, if I put no my tax to pay is nothing

Were you, for all or part of the year to 5 April 2014,
one or more of the following – not resident, not
ordinarily resident or not domiciled in the UK and
claiming the remittance basis; or dual resident in
the UK and another country?

Secondly my NZ tax obligations. Do I need to complete a NZ tax return as well and declare my UK property and be taxed here? I read somewhere that I am exempt from this for the first 5 years of my residency here.

I've read various stuff on the internet regarding all of this but not of it seems conclusive

Many thanks :eek:

escapedtonz Mar 22nd 2015 7:08 am

Re: Tax advice on my UK property
 
Hi,
No you are not claiming the remittance basis. This only affects non-domiciled peoole who choose to pay tax on the remittance basis on their overseas income and gains....I think.
If you are living in nz now and earning mobey here and paying tax then you should state you are non-resident in the uk.

Yes, because you are still earning an income in the UK you will have to complete self assessment.
We also still rent our uk house and have to complete a self assessment each - each year.
We earn £12k a year in rent but less the expenses you can claim we declare around £11k but since we are a couple we only declare half on each self assessment to make up the total, so £5500 each as an income each. We also halve any interest which isn't much.
You have to make sure you tick the right box for eligibility of the tax free amount in the uk which is over £9k per person nowadays?
So after all this your tax bill should be zero.
Hopefully you have already applied to receive your rental income free of uk tax so you receive all the money paid by the tenant ?
This is just a simple form to fill in and it is faxed to your rental management company who make sure they don't take tax out of your income.

No you don't need to declare anything here for 5 years as you say as there's a reciprocal agreement between the UK and NZ so you don't get double taxed.

Hopefully this year will be the last time we have to bother about this stuff as we hope to sell up in the UK finally

britinauckland Mar 22nd 2015 8:05 pm

Re: Tax advice on my UK property
 
Hi, thanks for your help. so for this question would I answer no? I thought it would be a yes as I'm no longer UK resident

Were you, for all or part of the year to 5 April 2014,
one or more of the following – not resident, not
ordinarily resident or not domiciled in the UK and
claiming the remittance basis; or dual resident in
the UK and another country?

themajor Mar 22nd 2015 8:39 pm

Re: Tax advice on my UK property
 
The best thing to do surely would be to find an accountant as all this info HAS to be factual. Make a mistake and you will get clobbered.

Chocoholics Mar 22nd 2015 8:48 pm

Re: Tax advice on my UK property
 

Originally Posted by themajor (Post 11599577)
The best thing to do surely would be to find an accountant as all this info HAS to be factual. Make a mistake and you will get clobbered.

I agree. It can get pretty complicated. I'm also fairly sure it is 4 years tax free from overseas income in New Zealand not 5 years. Kind of makes the point to seek some good advice I guess.

chc4me Mar 23rd 2015 10:18 pm

Re: Tax advice on my UK property
 

Originally Posted by Chocoholics (Post 11599580)
I agree. It can get pretty complicated. I'm also fairly sure it is 4 years tax free from overseas income in New Zealand not 5 years. Kind of makes the point to seek some good advice I guess.

Fully agree, advice in this area is essential. When it comes to tax, there are a lot of "ifs, buts and maybes" , especially when you are talking about two different countries.

If you have a mortgage on the property, that raises another red flag.
If you are receiving Working for Families benefits, that may result in the removal of the 4 year tax free period in NZ.

Find an accountant that has experience with both countries to avoid potential mistakes.

moonie2011 Mar 24th 2015 1:32 am

Re: Tax advice on my UK property
 
[QUOTE=escapedtonz;11599116] we declare around £11k but since we are a couple we only declare half on each self assessment to make up the total, so £5500 each as an income each. Quote]

We just made this huge mistake, hubby submitted his 2013/2014 tax return and included the house rent, it is a joint house/mortgage, but as I've never ever done a tax return he put it all on his. We will now be paying tax when if we had split it we wouldn't, have now found a accountant to do 2014/2015's and will hopefully get it right this year :thumbdown:

escapedtonz Mar 24th 2015 3:45 am

Re: Tax advice on my UK property
 

Originally Posted by britinauckland (Post 11599555)
Hi, thanks for your help. so for this question would I answer no? I thought it would be a yes as I'm no longer UK resident

Were you, for all or part of the year to 5 April 2014,
one or more of the following – not resident, not
ordinarily resident or not domiciled in the UK and
claiming the remittance basis; or dual resident in
the UK and another country?

What are the answer options and when did you leave the UK ?

escapedtonz Mar 24th 2015 3:52 am

Re: Tax advice on my UK property
 

Originally Posted by Chocoholics (Post 11599580)
I agree. It can get pretty complicated. I'm also fairly sure it is 4 years tax free from overseas income in New Zealand not 5 years. Kind of makes the point to seek some good advice I guess.

Yes it is 4 calendar years or 49 months from the date you become a tax resident in NZ.

escapedtonz Mar 24th 2015 3:56 am

Re: Tax advice on my UK property
 
[QUOTE=moonie2011;11600725]

Originally Posted by escapedtonz (Post 11599116)
we declare around £11k but since we are a couple we only declare half on each self assessment to make up the total, so £5500 each as an income each. Quote]

We just made this huge mistake, hubby submitted his 2013/2014 tax return and included the house rent, it is a joint house/mortgage, but as I've never ever done a tax return he put it all on his. We will now be paying tax when if we had split it we wouldn't, have now found a accountant to do 2014/2015's and will hopefully get it right this year :thumbdown:

Oh damn it!
Yes a costly mistake although you could probably appeal to HMRC and declare that you made a mistake for that annual tax return - just plead ignorance to the rules, it seems to work, especially if you've never done self assessment before.
Hopefully they'll allow you to resubmit and credit you with the difference ?
They can only say no.

themajor Mar 24th 2015 5:09 am

Re: Tax advice on my UK property
 

Originally Posted by escapedtonz (Post 11600789)

Oh damn it!
Yes a costly mistake although you could probably appeal to HMRC and declare that you made a mistake for that annual tax return - just plead ignorance to the rules, it seems to work, especially if you've never done self assessment before.
Hopefully they'll allow you to resubmit and credit you with the difference ?
They can only say no.

They have got an accountant. The accountant WILL be able to get a full refund of all taxes overpaid. Humans make mistakes and even HMRC are aware of this.
The advice on here is all meant to "guide and help" however it can sometimes be the wrong advice. So in this instance the OP really does need the professional help of an accountant who has the necessary skills on the fiscal procedures of both countries.

moonie2011 Mar 24th 2015 5:35 am

Re: Tax advice on my UK property
 

Originally Posted by themajor (Post 11600816)
They have got an accountant. The accountant WILL be able to get a full refund of all taxes overpaid. Humans make mistakes and even HMRC are aware of this.
The advice on here is all meant to "guide and help" however it can sometimes be the wrong advice. So in this instance the OP really does need the professional help of an accountant who has the necessary skills on the fiscal procedures of both countries.

We didn't have an accountant when we submitted and we only got an account after HMRC has, so far, taken 8months to sort out 2013/2014's tax. Now we have an accountant we will ask as escapedtonz suggested in his usual good faith and helpful way :) Thanks

themajor Mar 24th 2015 5:59 am

Re: Tax advice on my UK property
 

Originally Posted by escapedtonz (Post 11600789)

Oh damn it!
Yes a costly mistake although you could probably appeal to HMRC and declare that you made a mistake for that annual tax return - just plead ignorance to the rules, it seems to work, especially if you've never done self assessment before.
Hopefully they'll allow you to resubmit and credit you with the difference ?
They can only say no.

Sorry but I read the above .... it say's that you now have an accountant and that is what I was refering to.:nod:


We just made this huge mistake, hubby submitted his 2013/2014 tax return and included the house rent, it is a joint house/mortgage, but as I've never ever done a tax return he put it all on his. We will now be paying tax when if we had split it we wouldn't, have now found a accountant to do 2014/2015's and will hopefully get it right this year
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