We will rent our home (jointly owned with my spouse) and as we have a small mortage will have an annual profit of approximatly £25k after expenses.
We are able to increase interest by remortaging but UK tax law only allows interest on the initial purchase price which if we increase our current mortage to this level, will only reduce our profit by a small margin
Are there any Oz tax laws that can help us reduce our taxible profit?
When you come to Oz are you coming as a permanent or temporary resident ??
Also don't forgrt that you and your wife will still be entitled to claim the Personal Allowance in the UK even though you are not resident there. So that will knock a bit off your profit for starters (well at least in the first full tax year and subsequent years after you leave the UK).
Posts: 677 | Location: Sydney | Registered: 18 November 2005
What are the diferences in temporary and permanent? Technically we could arrive as temporary. Reasons; with me setting up business in OZ but still keeping biz going in the Uk, keeping family home in UK.
Your status in Oz will make no difference to how much tax you pay in the UK, nor will Oz tax laws help you reduce the amount of tax you pay in the UK either.
However if you are a permanent resident you will have to pay tax on your worldwide income here in Oz. So you would have to declare your UK rental income (from when you arrive in Oz) on your Oz tax return but you would also be entitled to a tax credit eqivalent to the amount of tax you paid in the UK.
If you managed to not pay any tax in the UK i.e. your profit was less than your combined personal allowances, you would still pay tax on it here in Oz as your 'personal allowance' here would have been used up by your Australian income.
As a holder of certain types of temporary visas (not sure if this applies to all temporary visas) you do not have to declare foreign rental income (and other forms of foreign source income I think) here in Oz. So this would save you some money !
Posts: 677 | Location: Sydney | Registered: 18 November 2005
Originally posted by widget man: What are the diferences in temporary and permanent? Technically we could arrive as temporary. Reasons; with me setting up business in OZ but still keeping biz going in the Uk, keeping family home in UK.
We could do this for a few years.
Widget Man
No, technically you either arrive as a temporary resident (holding a temporary residency visa), or as a permanent resident (holding a permanent residency visa).
In circumstances where you have business interests in the UK and are living in Australia I recommend taking competent professional advice.
Best regards.
Alan Collett alan-at-gomatilda-dot-com Registered Migration Agent Number 0102534 Fellow of the Institute of Chartered Accountants in England and Wales Member of the Institute of Chartered Accountants in Australia http://www.gomatilda.com and http://www.collettandco.co.uk Offices in Southampton - England; Melbourne, Perth, Brisbane, and Geelong - Australia
Posts: 2573 | Location: Geelong, Australia | Registered: 01 August 2002
Thank you. We are not averse to taking more money out of the property in the form of an increae mortage. If we did this can the increase in interest payments be used in OZ to offset the UK income from renting?
I understand that increase in mortage payments beyond purchase price can't be used in UK but can it be used in oz?