Depreciation Schedule for UK Property

[Its Immaterial]

First post, here goes

I emigrated to Aus from the UK last year and rather than sell my house I rented it out. From the ATO website I understand I'm taxed on worldwide earnings and believe the house is treated like any other IP.

The house was my private residence, bought new about 7 years ago, and has been rented since I emigrated. Can I depreciate it the same as any other house of similar size here? There's obviously a difference in pricing, so for example if a new kitchen there costs less than one here - do I use UK prices and convert to $, if so using which exchange rate?

One of my neighbours generally does minor repairs for me, for example he replaced a fence that blew down. I have receipts for the materials, but there was no labour as such. Likewise, the tenant repainted the kitchen for me and I just paid for the paint....Going forward, am I better off ending these informal arrangements and getting stuff done by proper tradies?

What about small appliances, say the microwave packs in, does the tenant just buy a new one and e-mail me a scan of the receipt?

As regards trips back to the UK to inspect the property, would once a year be acceptable/claimable?

As a newbie to this, any advice would be useful, apologies for all the questions!

Cheers.

 

[MartinW]

Getting into slightly more complexity with this You can depreciate it but you will also be claiming the same in the uk on your return there. Bit of work involved in checking ATO depreciation rates align with hmrc. Exchange rates are rates as at date(s) of purchase of items. Any new appliances are fine as long as you have a receipt. Work done by neighbor etc ok - again just need receipts.

Inspection trips are ok but if it is really a holiday might get into trouble.

Rgds
Martin

www.houseofwealth.com.au

 

[ScottyB]

Martin,

My understanding is that HMRC do not have depreciation rates for IP's? It is not an "allowable" deduction, you do however have Capital Allowances which is a completely different thing and no where near as generous as ATO depreciation.

The exact reason most expat's become full Australian Tax "Residents" ASAP so they can claim full depreciation for UK properties. One of the major advantages of the ATO framework.

Another tip is to try and convince HMRC that you are no longer a UK tax resident so that you can discontinue having to complete an annual self assessment. Not an easy process but achievable by digging your heals in, easier if you have full PR of Oz and can demonstrate you have no intention of returning to the UK, e.g. have purchased a PPOR in Oz, moved UK pensions over into SMSF, closed all personal bank accounts except for IP ones etc.

When we travel over we claim a portion back pro rata, e.g. if we are over for 14 days and 7 of those relate to our IP's we give a clear breakdown. Make appointments with your estate agent for inspections etc and keep the proof we would then claim 50% of costs e.g. air fares, hire car etc.

By the way i am a House of Wealth Client so here's hoping when my returns come in over the next few weeks you look after me