Refinancing my london property with funds from Australia

[ddan]

Hi..

I own a property in the UK which is currently being rented out, the mortgage on it is with a UK bank. Just wondering if its possible to refinance the property with an Australian bank? and if so, is it worth going through the process?

At present I do not get any tax-benefits in owning it, but if I refinance it with an aussie bank I will do, is this correct? what are the adv/disadv in moving the finance here(if I can do it).

I live in Aus permanantly now (I bought the flat whilst living over there)

Thanks for your advice!

 

[alexlee]

At present I do not get any tax-benefits in owning it, but if I refinance it with an aussie bank I will do, is this correct?

How do you figure that?

 

[ddan]

Im a bit clueless with these things, so maybe you can enlighten me?

I was under the impression that as the finance on my UK property is in the UK I dont get tax breaks on it here?

 

[HLE]

Firstly speak to an Aussie accountant and possibly a UK one as well.

Secondly I think the rates in the UK are lower than here right? If so then there may be less of a benefit in refinancing.

If you have a property in Australia that you can use as security and it has sufficient equity then a mortgage broker can assist you with this.

If not then I doubt you will find an Aussie lender that can assist, it's outside my area of expertise so maybe another broker here can comment on it.

 

[alexlee]

Im a bit clueless with these things, so maybe you can enlighten me?

I was under the impression that as the finance on my UK property is in the UK I dont get tax breaks on it here?

Tax breaks, presumably deductibility of interest, depends on what you used the borrowings for. Moving the finance to an Australian bank doesn't change the purpose: purchase of a UK property. Presumably it's all segregated as foreign income. Changing the bank won't change that.

It's worth it to go to an accountant and talk through what you want to achieve first. 'Impressions' don't stand up in court.

 

[ddan]

so as its foreign income means that its not tax deductible? All the servicing of the property is via my Australian income, but still I cant claim it as a tax deduction?

Yes will have to speak in depth abt this with my accountant

 

[Terry_w]

From Australian side you will be assessed on your worldwide income (assuming u r a resident). But you may be able to claim associated expenses even on an overseas property.

 

[ddan]

From Australian side you will be assessed on your worldwide income (assuming u r a resident). But you may be able to claim associated expenses even on an overseas property.

Thanks for that.
So I spoke to my accountant last night and he's under the impression that I cant negative gear my O/S property.

Coincidentally I was reading and article in this months YIP and to quote from the Tax Traps article it say:
"yes, you are allowed to offset the negative gearing loss incurred on your overseas property against your australian income"

Can you point me to some legislation or online content that I can take to my accountant so we can nut this out?

Thanks!

 

[Terry_w]

Thanks for that.
So I spoke to my accountant last night and he's under the impression that I cant negative gear my O/S property.

Coincidentally I was reading and article in this months YIP and to quote from the Tax Traps article it say:
"yes, you are allowed to offset the negative gearing loss incurred on your overseas property against your australian income"

Can you point me to some legislation or online content that I can take to my accountant so we can nut this out?

Thanks!

You can claim expenses for overseas property. But whether you can negative gear or not would depend on your situation. It is possible though.

See, for starters:
http://www.ato.gov.au/Individuals/I...verseas/Rental-income-from-overseas-property/


This is a complex area and if your accountant doesn't know the basics then they are probably costing you money.

 

[Qlds007]

Regretfully although the Bank of England base rate is only 0.50% and the average home loan is charged at sub 3% you will not get any UK lender (including your own Bank) refinance the loan in the UK.

There is now only 1 lender in the UK that will consider loans for non residents (even if you are UK Citizen and Passport Holder) and their criteria is very limiting.

Purchases only and no refinancing.