Paying tax in Uk for Aus property?

[cowgirlfromhell]

I need the idiots guide to paying tax on what and where..!? Sorry I'm sure it's been asked a thousand time already...but I want to be 100% clear on our life decisions!

if we buy property in Australia and live and work in England, do we pay tax in the UK on our investment even if we make a loss on it as a rental?

none of what we earn in the UK is taxed here is it?

thanks for your time...

[Gbye grey sky]

You need someone to help you with the Australian tax rules and hopefully someone will be along soon. Not answering your point, just curious, but why would you buy an Oz propery potentially making a loss on your investment, while living and working in England. Many Australian taxpayers do it because of negative gearing I understand but you would not get that.

[Alan Collett]

The answer to your question depends on your tax residency status in the UK and in Australia.

 

If you are not tax resident in Australia the rental losses would accumulate, and can be claimed as a tax deduction in the year that you resume tax residence in Australia.

 

If you are deriving a rental loss on your Aus property there would be no UK tax payable either.

 

If you would be retaining the property in anticipation of a capital gain, watch the position insofar as capital gains on real property derived by non-Aus tax residents is concerned. No CGT discount, and the first $ of gain taxable in Australia at 32.5%.

 

The strategy can work if you are planning to return to live in Australia at some point - but a clear understanding of what you are planning to do is essential (IMHO).

 

 

Best regards.

[cowgirlfromhell]

Thanks Alan....yes I'm starting to think savings in a high interest account is a better idea...! The tax on the profit is huge! It is a big gamble....