Hi,

I'm thinking of returning to the U.K soon and renting out my property here in Australia. What implications would this have on my tax position in the U.K and Australia? Can I still claim negative gearing benefits if I reside outside of Australia? I have dual Australian/British citizenship.

Regards

MJJ

I am not an accountant nor a tax expert.

You should really ask an accountant for the full implications, but, since no-one has answered yet, I can only offer you my own observations, given that I rent out my house in Australia, and have rented out a house in the UK. I live in the US.

If you become non-resident in Australia for tax purposes:-
You will be taxed in Australia on any rental income (in fact all income arising in Australia). You can offset some expenses against the rental income, including interest paid on any home loan. But, assuming you do have a home loan, you should check if there any conditions regarding letting.

As you will be non-resident for tax purposes, you will not enjoy any tax-free allowance (personal allowance). You will be taxed at 29%

If your house is then considered an investment property you may be liable to pay Land Tax (I do in NSW. I don't know about QLD).

If you sell your house in Australia, you should consider the capital gains liability in both Australia and the UK if you are tax resident there.

The good news is that if you're tax resident in the UK (and a citizen) you will enjoy a personal allowance and also a capital gains allowance. The bad news is you'll also have to declare your Australian rental income in the UK. Luckily there is a double-taxation agreement between the UK and Australia so you should only pay tax once.

There are lots of other things you should consider (inheritance tax/wills etc), and, as I said, you should really talk to an accountant - preferably one who knows both tax regimes. They will no doubt charge you a fee.

Hope that helps.
--
BillyS

PS If you find an expert who knows three tax regimes - let me know :-(