Tax question
Jul 19th 2009, 4:05 pm
#1
BE Enthusiast
Thread Starter
Joined: Nov 2008
Location: New Plymouth
Posts: 344
Tax question
Hi guys
When we move to NZ we are renting our flat out in the UK.
How does the tax situation work? Do we get taxed in NZ for our wages in NZ and get taxed in the UK for our rental property?
I assume lots of other people are in this situation so would love to hear from you.
We will also probably have an accountant here in the UK to sort out any tax returns etc as hopefully this will make things easier - is this a good idea?
Cheers
When we move to NZ we are renting our flat out in the UK.
How does the tax situation work? Do we get taxed in NZ for our wages in NZ and get taxed in the UK for our rental property?
I assume lots of other people are in this situation so would love to hear from you.
We will also probably have an accountant here in the UK to sort out any tax returns etc as hopefully this will make things easier - is this a good idea?
Cheers
Jul 19th 2009, 10:24 pm
#2
Enjoying retirement
Joined: Jun 2008
Location: Rural Taranaki
Posts: 320
Re: Tax question
Once you become subject to NZ tax, you will have to pay NZ Income tax on ALL your income worldwide, regardless of whether you bring this income into NZ or not. Your UK rental income would be subject to NZ income tax.
Two points though:
1) NZ and UK have a double taxation agreement which means that NZ will deduct from the the amount due, any tax already paid in the UK.
2) As a new immigrant, your overseas income is exempt from NZ tax for the first 4 years Taking this option does exclude you from certain social security benefits though.
Jul 20th 2009, 1:56 am
#3
BE Forum Addict
Joined: Sep 2006
Posts: 4,298
Re: Tax question
Hi guys
When we move to NZ we are renting our flat out in the UK.
How does the tax situation work? Do we get taxed in NZ for our wages in NZ and get taxed in the UK for our rental property?
I assume lots of other people are in this situation so would love to hear from you.
We will also probably have an accountant here in the UK to sort out any tax returns etc as hopefully this will make things easier - is this a good idea?
Cheers
When we move to NZ we are renting our flat out in the UK.
How does the tax situation work? Do we get taxed in NZ for our wages in NZ and get taxed in the UK for our rental property?
I assume lots of other people are in this situation so would love to hear from you.
We will also probably have an accountant here in the UK to sort out any tax returns etc as hopefully this will make things easier - is this a good idea?
Cheers
Jul 20th 2009, 6:44 pm
#4
BE Enthusiast
Thread Starter
Joined: Nov 2008
Location: New Plymouth
Posts: 344
Re: Tax question
Please can someone clarify the following is correct (or wrong!):
If I rent the property out in UK and fill in a non-resident tax form for HMRC - then all income from the property will be sent from letting agent direct to me without deducting any tax and then will I need claim the income on a self assessment form in NZ which will include the 4 years free rule?
If I rent the property out in the UK and let the letting agent deduct tax from the monthly rent - I can reclaim some of this tax back via a UK tax return (or all of it if below our tax threshold)?
Do HMRC in NZ automatically send you a self assessment or would I need to ask for one when we get there?
Do I need to inform our bank (Nationwide) that we dont want them to tax our account (and declare anything in NZ) or will they do this automatically with change of address?
Is there any need to have an accountant in the UK?
Sorry for all the questions but would like to get the tax situation clear in my head!
If I rent the property out in UK and fill in a non-resident tax form for HMRC - then all income from the property will be sent from letting agent direct to me without deducting any tax and then will I need claim the income on a self assessment form in NZ which will include the 4 years free rule?
If I rent the property out in the UK and let the letting agent deduct tax from the monthly rent - I can reclaim some of this tax back via a UK tax return (or all of it if below our tax threshold)?
Do HMRC in NZ automatically send you a self assessment or would I need to ask for one when we get there?
Do I need to inform our bank (Nationwide) that we dont want them to tax our account (and declare anything in NZ) or will they do this automatically with change of address?
Is there any need to have an accountant in the UK?
Sorry for all the questions but would like to get the tax situation clear in my head!
Jul 21st 2009, 6:09 pm
#5
BE Enthusiast
Thread Starter
Joined: Nov 2008
Location: New Plymouth
Posts: 344
Re: Tax question
Any ideas from anyone?
Jul 22nd 2009, 4:13 am
#6
Cow on the Beach
Joined: Aug 2008
Location: Seatoun, Wellington
Posts: 699
Re: Tax question
Please can someone clarify the following is correct (or wrong!):
If I rent the property out in UK and fill in a non-resident tax form for HMRC - then all income from the property will be sent from letting agent direct to me without deducting any tax and then will I need claim the income on a self assessment form in NZ which will include the 4 years free rule? Yes
If I rent the property out in the UK and let the letting agent deduct tax from the monthly rent - I can reclaim some of this tax back via a UK tax return (or all of it if below our tax threshold)?Yes
Do HMRC in NZ automatically send you a self assessment or would I need to ask for one when we get there?No - it depends on your tax situation. The first thing you need is an IRD number, then at the end of the tax year (actually about now) you can ask for a return for which you will be sent a reference number. For basic tax retruns you can do these on line but overseas income will probably need a paper return to be filled in
Do I need to inform our bank (Nationwide) that we dont want them to tax our account (and declare anything in NZ) or will they do this automatically with change of address?You need to inform them and fill in a form asking for tax not to be withheld. You also need to fill in a P85 (I think that is the right numebr) - to 'log off' the UK tax system. As for NZ, you will need to declare any overseas interest as part of the tax return
Is there any need to have an accountant in the UK? Your choice. If you only have rental income in the UK I would say not but tax advice in NZ might be a better option
Sorry for all the questions but would like to get the tax situation clear in my head!
If I rent the property out in UK and fill in a non-resident tax form for HMRC - then all income from the property will be sent from letting agent direct to me without deducting any tax and then will I need claim the income on a self assessment form in NZ which will include the 4 years free rule? Yes
If I rent the property out in the UK and let the letting agent deduct tax from the monthly rent - I can reclaim some of this tax back via a UK tax return (or all of it if below our tax threshold)?Yes
Do HMRC in NZ automatically send you a self assessment or would I need to ask for one when we get there?No - it depends on your tax situation. The first thing you need is an IRD number, then at the end of the tax year (actually about now) you can ask for a return for which you will be sent a reference number. For basic tax retruns you can do these on line but overseas income will probably need a paper return to be filled in
Do I need to inform our bank (Nationwide) that we dont want them to tax our account (and declare anything in NZ) or will they do this automatically with change of address?You need to inform them and fill in a form asking for tax not to be withheld. You also need to fill in a P85 (I think that is the right numebr) - to 'log off' the UK tax system. As for NZ, you will need to declare any overseas interest as part of the tax return
Is there any need to have an accountant in the UK? Your choice. If you only have rental income in the UK I would say not but tax advice in NZ might be a better option
Sorry for all the questions but would like to get the tax situation clear in my head!
Jul 22nd 2009, 7:00 am
#7
BE Enthusiast
Thread Starter
Joined: Nov 2008
Location: New Plymouth
Posts: 344
Re: Tax question
Thanks for the info Wooly_Cow that makes things a bit clearer!
Jul 31st 2009, 5:23 pm
#8
BE Enthusiast
Thread Starter
Joined: Nov 2008
Location: New Plymouth
Posts: 344
Re: Tax question
Hi guys
Just a few more questions if anyone can help?:
1. When we move to NZ will we still have our UK Tax free limit (upto £4000 each or whatever it is at the moment)? - If so is it best to have UK rent taxed in UK and have no tax deducted (because below threshold) and then just claim this on NZ tax form?
2. If we use NZ tax system can we claim the same deductions off the rent as we can in UK, i.e. mortgage interest, lettings agents fees etc
3. Is it a good idea to have a UK accountant for Uk tax return?
4. Apart from non-resident landlord forms, are there any other tax forms we need to fill in to reclaim any tax back we have paid from our normal wages (as we will be leaving half way through the UK tax year) or will it all come out in the wash when we fill in tax return forms at end of tax year?
Sorry for all the questions but you are a bright and knowledgable bunch!
Just a few more questions if anyone can help?:
1. When we move to NZ will we still have our UK Tax free limit (upto £4000 each or whatever it is at the moment)? - If so is it best to have UK rent taxed in UK and have no tax deducted (because below threshold) and then just claim this on NZ tax form?
2. If we use NZ tax system can we claim the same deductions off the rent as we can in UK, i.e. mortgage interest, lettings agents fees etc
3. Is it a good idea to have a UK accountant for Uk tax return?
4. Apart from non-resident landlord forms, are there any other tax forms we need to fill in to reclaim any tax back we have paid from our normal wages (as we will be leaving half way through the UK tax year) or will it all come out in the wash when we fill in tax return forms at end of tax year?
Sorry for all the questions but you are a bright and knowledgable bunch!
Jul 31st 2009, 8:52 pm
#9
BE Enthusiast
Joined: May 2007
Location: Hamilton
Posts: 402
Re: Tax question
Hi guys
Just a few more questions if anyone can help?:
1. When we move to NZ will we still have our UK Tax free limit (upto £4000 each or whatever it is at the moment)? - If so is it best to have UK rent taxed in UK and have no tax deducted (because below threshold) and then just claim this on NZ tax form?
2. If we use NZ tax system can we claim the same deductions off the rent as we can in UK, i.e. mortgage interest, lettings agents fees etc
3. Is it a good idea to have a UK accountant for Uk tax return?
4. Apart from non-resident landlord forms, are there any other tax forms we need to fill in to reclaim any tax back we have paid from our normal wages (as we will be leaving half way through the UK tax year) or will it all come out in the wash when we fill in tax return forms at end of tax year?
Sorry for all the questions but you are a bright and knowledgable bunch!
Just a few more questions if anyone can help?:
1. When we move to NZ will we still have our UK Tax free limit (upto £4000 each or whatever it is at the moment)? - If so is it best to have UK rent taxed in UK and have no tax deducted (because below threshold) and then just claim this on NZ tax form?
2. If we use NZ tax system can we claim the same deductions off the rent as we can in UK, i.e. mortgage interest, lettings agents fees etc
3. Is it a good idea to have a UK accountant for Uk tax return?
4. Apart from non-resident landlord forms, are there any other tax forms we need to fill in to reclaim any tax back we have paid from our normal wages (as we will be leaving half way through the UK tax year) or will it all come out in the wash when we fill in tax return forms at end of tax year?
Sorry for all the questions but you are a bright and knowledgable bunch!
Can't answer all of it but there is a special form you have to fill in when you leave the UK which deals with the part year business - your employer should provide it with your P45. If you normally do Self Assessment you then have to have the year treated as a split year. It is messy but the guidance notes help on the HMRC website.
