Rental property in UK

[cliffandmandy]

Hi all, I have tried searching but without success. I am just trying to find some advice or answers.
A friend who resides in Australia and working here has a PR visa but still owns house in the UK which as they could not sell so they have rented it out. This is running at negative gearing, not through choice.

Are they able to set thier losses from the UK house against their Australian Tax.

Are they able to set Interest on the Loan against Tax

Are they able to set running costs i:e Management fees, repairs etc against Tax.

If they travelled back would they be able to set flight costs against tax.

Any info would be greatly appreciated.

 

[Kristine..]

Hi C&M

We have the reverse situation

No: 1 Son currently lives in London and has rental property in Australia

According to our Accountant, the earnings from each country are completely separate


From memory, and unless something dramatic has changed, there is no gearing in UK so income is income and expense is expense.

I remember staying in a house for sale some years ago and the owners said that they had to pay income tax on the rent, but the interest and other expenses were considered to be 'discretionary' spending, had nothing to do with the rent and could not be offset against it.

As a result they were selling the house as they were not able to afford to keep the place.




However, here all Son's Australian income and all his Australian expense are adjusted against each other before the net taxable income is determined, and he is carrying losses forward.

As a result, he has decided to sell this financial year as he may be earning in Australian Dollars again next year, but this year he has minimal Australian income (and quite high capital gain).




Your friends need to speak to a Tax Accountant in England.


Cheers
Kristine

 

[Jonathon]

The laws in this area changed from 1 July 2008, to the benefit of your friend. Essentially you can now treat the UK property as a normal negatively geared property for Australian tax purposes.

However, as is always the case with tax law, your friend really needs to speak to an accountant to discuss the specifics of their situation.

http://www.ato.gov.au/individuals/content.asp?doc=/Content/00107951.htm&page=5&H5

 

[cliffandmandy]

The laws in this area changed from 1 July 2008, to the benefit of your friend. Essentially you can now treat the UK property as a normal negatively geared property for Australian tax purposes.

However, as is always the case with tax law, your friend really needs to speak to an accountant to discuss the specifics of their situation.

http://www.ato.gov.au/individuals/content.asp?doc=/Content/00107951.htm&page=5&H5

Thanks very much for that Jonathon I shall pass the news on.

 

[chrisrx7]

Hi Jonathon,
can you recommend a Tax guy or accountant that has experience in this area in melbourne. I have some property in the UK and its not particulary straight forawrd either.
it appears that negative gearing would be possible on these and maybe able to offset against myself and wifes Australian tax.
we also want to get a IP here too so we would need someone who can advise on that and be able to do our tax returns.
We are on mornington peninsula, if that helps with recommendations.
cheers
chris

 

[Jonathon]

Hi Chris

Check out James Gatherum Goss - he's based in Fitzroy but location shouldn't be an issue for you, just the property expertise of your accountant. He has plenty.

I think his website is houseofwealth.com.au or something like that.

Cheers
Jonathon

 

[chrisrx7]

Thanks Jonathon, appreciated.
Cheers,
chris