Deductions allowed against UK income??

[fusella]

Hi all,

Here's my situation. I have an investment property in Melbourne that is being negatively geared. I am moving to the UK to work for 2 years in a few weeks. Obviously, normally I would deduct the property expenses (interest etc..) against the rental income and my Australian salary. Once I begin to earn a salary in the UK, can I continue to deduct the property expenses against my salary? The reality is that although I'll be working in the UK and earning pound, it'll still be used to upkeep my property here in Australia.

Thanks in advance,

 

[Tillie]

Hi Fusella,

I assume that you will be regarded as a non-resident in Australian tax purpose (check with ATO) and you will be paying your PAYE tax to UK. If that is the case you have to find out if UK tax office allows negative gearing. My understanding (but not necessary correct) is that they do not allow it even for UK properties. Australian negative gearing is quite unique and I have not heard it to be allowed in anywhere else than here.

Please check that with your accountant here in Aus, but I would assume that you can lodge tax return here as normal and report taxable loss and In the future when your property will turn positively geared you can deduct losses from you property income.

 

[kiwipaul]

I also don't believe you can claim deduction against depreciation on your Oz property on your UK tax return as this concept is not allowed in UK.

You can continue to claim the depreciation on your Oz tax return and you would build up losses each year which you could use against your income in future years if you return.

NZ also allow depreciation on the chattels NOT the house itself (since 2009 I think was when it changed),