Reluctant Landlords 3
Protect your property from the tax men (3)
The third of a five part series of advice from experts Montfort International plc for home-owning migrants
Australian Tax on rental income
Australia will generally tax residents on their worldwide income and capital gains. Permanent residents need to include rental income from their UK property in their Australian tax return but can claim a credit for any UK tax paid to avoid double taxation. You should keep proof of all expenditure to ensure you can claim tax deductions for everything you're entitled to, including rates, interest, insurance, letting agent fees, depreciation and capital works.
The profit will be taxable at the highest marginal rate of the individual who owns the property to a maximum of 46½%. If a property provides a positive return, higher rate tax payers may wish to consider transferring ownership to a lower income earning spouse. However, if deductions exceed the rental income and the property makes a loss, this can be offset against other assessable income so it may be advantageous for the higher earning spouse to hold sole ownership of the property. You should also consider how this will affect your capital gains tax position at time of disposal before reaching any decisions on whether you should transfer ownership.
If you believe that renting out your UK property after migrating may be a viable proposition, seek specialist tax advice to ensure you stay on the right side of both the UK and Australian tax offices. Few UK accountants or advisers will be able to advise on the Australian tax situation, so talk free to one that does, Montfort International plc, on 0800 018 3571.
The third of a five part series of advice from experts Montfort International plc for home-owning migrants
Australian Tax on rental income
Australia will generally tax residents on their worldwide income and capital gains. Permanent residents need to include rental income from their UK property in their Australian tax return but can claim a credit for any UK tax paid to avoid double taxation. You should keep proof of all expenditure to ensure you can claim tax deductions for everything you're entitled to, including rates, interest, insurance, letting agent fees, depreciation and capital works.
The profit will be taxable at the highest marginal rate of the individual who owns the property to a maximum of 46½%. If a property provides a positive return, higher rate tax payers may wish to consider transferring ownership to a lower income earning spouse. However, if deductions exceed the rental income and the property makes a loss, this can be offset against other assessable income so it may be advantageous for the higher earning spouse to hold sole ownership of the property. You should also consider how this will affect your capital gains tax position at time of disposal before reaching any decisions on whether you should transfer ownership.
If you believe that renting out your UK property after migrating may be a viable proposition, seek specialist tax advice to ensure you stay on the right side of both the UK and Australian tax offices. Few UK accountants or advisers will be able to advise on the Australian tax situation, so talk free to one that does, Montfort International plc, on 0800 018 3571.
0 Comments:
Post a Comment
<< Home