Go Back  British Expats > Living & Moving Abroad > USA
Reload this Page >

Tax reporting for UK rental property

Tax reporting for UK rental property

Old Apr 3rd 2012, 9:54 pm
  #1  
Just Joined
Thread Starter
 
Joined: Aug 2008
Posts: 5
yorkie19 is an unknown quantity at this point
Default Tax reporting for UK rental property

I have a terrace house that I now rent out in the UK. Can anyone advise me as to whether the property should have a land value that would need to be deducted to find the base amount to depreciate on? It seems to me that in the UK the value of the land is not disclosed as it is here in the US. Thanks for any help.
yorkie19 is offline  
Old Apr 4th 2012, 12:20 am
  #2  
Forum Regular
 
Joined: May 2011
Posts: 68
texasjan is an unknown quantity at this point
Default Re: Tax reporting for UK rental property

Our accountant had us estimate the land and house value. We just went for a general rebuild value if it burnt down and put the rest as land value.
Dont understand the purpose of it - although it may become clearer years down the line lol
texasjan is offline  
Old Apr 4th 2012, 5:34 am
  #3  
Just Joined
 
Joined: Sep 2010
Posts: 11
crispin is an unknown quantity at this point
Default Re: Tax reporting for UK rental property

My accountant went with 80% house, 20% land split. This was all based on the exchange rate at the time of purchase.

The reason behind it all is that you can depreciate the house, but the land component doesn't lose value (it will always exist), so you can't depreciate that
crispin is offline  
Old Apr 4th 2012, 5:34 am
  #4  
Lost in BE Cyberspace
 
Michael's Avatar
 
Joined: Jun 2008
Location: San Francisco Bay Area
Posts: 10,678
Michael has a reputation beyond reputeMichael has a reputation beyond reputeMichael has a reputation beyond reputeMichael has a reputation beyond reputeMichael has a reputation beyond reputeMichael has a reputation beyond reputeMichael has a reputation beyond reputeMichael has a reputation beyond reputeMichael has a reputation beyond reputeMichael has a reputation beyond reputeMichael has a reputation beyond repute
Default Re: Tax reporting for UK rental property

Originally Posted by texasjan View Post
Our accountant had us estimate the land and house value. We just went for a general rebuild value if it burnt down and put the rest as land value.
Dont understand the purpose of it - although it may become clearer years down the line lol
Annual depreciation is based on 1/26th of the value of the home (excluding land) so that amount plus interest and rental expenses can be written off against rental income. However, depreciation must be recovered at a maximum 25% capital gains rate when the house is sold to determine taxes owed.
Michael is offline  
Old Apr 5th 2012, 1:33 am
  #5  
BE Enthusiast
 
dh010447's Avatar
 
Joined: May 2007
Location: Johns Creek, GA
Posts: 625
dh010447 is a glorious beacon of lightdh010447 is a glorious beacon of lightdh010447 is a glorious beacon of lightdh010447 is a glorious beacon of lightdh010447 is a glorious beacon of lightdh010447 is a glorious beacon of lightdh010447 is a glorious beacon of lightdh010447 is a glorious beacon of lightdh010447 is a glorious beacon of lightdh010447 is a glorious beacon of lightdh010447 is a glorious beacon of light
Default Re: Tax reporting for UK rental property

Originally Posted by crispin View Post
My accountant went with 80% house, 20% land split. This was all based on the exchange rate at the time of purchase.

The reason behind it all is that you can depreciate the house, but the land component doesn't lose value (it will always exist), so you can't depreciate that
Same here, 80/20.

Does make me wonder though, as our property has increased in value since we bought it...
dh010447 is offline  
Old Apr 7th 2012, 4:23 pm
  #6  
Just Joined
 
Joined: Apr 2011
Location: Oklahoma
Posts: 14
Bushers is an unknown quantity at this point
Default Re: Tax reporting for UK rental property

Let me give you some advice that I wish I'd had when we moved to the US and rented our house in the UK;

If you are renting and then decide to sell the house, and you have not lived in the house for 2 of the last 5 years, you will be subject to capitol gains tax in the US.

This can be pretty costly if you make a sizeable profit on the house. You cannot do a 1031 exchange as any foreign property is not a 'like kind' so there is no way around it even if you do invest the funds into a US house as we did.
Bushers is offline  
Old Apr 7th 2012, 4:54 pm
  #7  
Just Joined
Thread Starter
 
Joined: Aug 2008
Posts: 5
yorkie19 is an unknown quantity at this point
Default Re: Tax reporting for UK rental property

Thanks for the Capital gains tax advise. It is really just something to fall back on just in case our move over here didn't work out. It looks like we won't be making any gains on it in the current market as we will probably try & sell it soon.
yorkie19 is offline  

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Contact Us - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service - Do Not Sell My Personal Information -

Copyright © 2018 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.