I have a questions for expats who have lived or currently living in the UK, on the tax implications for buying a property.
We are moving to London with a 3 years sponsored visa (new job for hubby). We would like to stay between 5 to 7 years (visa needs to be renewed at the appropriate time). After this, we want to return to Australia to retire.
We are currently renting a house in London, but would like to buy something to live in (undecided on whether it would be an apartment or a house) towards the end of 2012. This is because we prefer to live in our own house, instead of living in others with tenants' restrictions in being able to modify the property to our needs and taste. When we return to Australia, we may rent the property out or sell it - undecided on this.
We will be classified as "non-residents" for Australian tax purposes - and pay non-resident tax rates on our properties and investments in Australia. Hubby will pay UK taxes on his UK salary. We do not intend to invest in the UK at this stage - but prefer to maintain our assets in Australia. We have a PPOR (which will be rented out while we live in the UK), a family trust with investment properties and a self-managed super fund.
Two different people in the UK have told us that we should not buy a property in the UK - because this could have severe tax implications for us! They did not elaborate on the reasons, but said that if we bought a house to live in then it could be construed (by the tax authority) that it would be our intent to live in the UK permanently. Thus, we would be taxed on our "worldwide" income, and not just the UK sourced income!
Does any expat have views on the above? Thanks in advance for any comment(s).
We are moving to London with a 3 years sponsored visa (new job for hubby). We would like to stay between 5 to 7 years (visa needs to be renewed at the appropriate time). After this, we want to return to Australia to retire.
We are currently renting a house in London, but would like to buy something to live in (undecided on whether it would be an apartment or a house) towards the end of 2012. This is because we prefer to live in our own house, instead of living in others with tenants' restrictions in being able to modify the property to our needs and taste. When we return to Australia, we may rent the property out or sell it - undecided on this.
We will be classified as "non-residents" for Australian tax purposes - and pay non-resident tax rates on our properties and investments in Australia. Hubby will pay UK taxes on his UK salary. We do not intend to invest in the UK at this stage - but prefer to maintain our assets in Australia. We have a PPOR (which will be rented out while we live in the UK), a family trust with investment properties and a self-managed super fund.
Two different people in the UK have told us that we should not buy a property in the UK - because this could have severe tax implications for us! They did not elaborate on the reasons, but said that if we bought a house to live in then it could be construed (by the tax authority) that it would be our intent to live in the UK permanently. Thus, we would be taxed on our "worldwide" income, and not just the UK sourced income!
Does any expat have views on the above? Thanks in advance for any comment(s).