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Money matters

Taxed on renting out house in UK?

Yes, it does, doesn't it? Post here about financial issues, including pensions.

Taxed on renting out house in UK?

Postby Genesis » Wed 18 Jul 2007 20:11 GMT

Our house has been up for sale for 6 months with no offers so far. The market has slowed since the increase in interest rates.
It looks like the only options are:
a) to sell it to one of those companies advertised on the TV that buy any house any condition at a loss of 15-20% (not my preferred choice)
b) rent it out when we emigrate to Oz on a temporary work visa and sell when the market picks up
TWO questions:
1) Will we have to pay tax on the rental income?(the rental income will just about cover the mortgage payments)
2) Will we have to pay CGT when we do finally sell the property?
I don't think we can buy a house in Oz whilst on a temporary visa so this will be the only property we have to sell.
Any advice would be greatly received.
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Postby pmforster » Thu 8 May 2008 14:39 GMT

It depends on how much rent you're getting. If you get more than whatever the current lower tax threshold then you'll have to pay tax on it.

I don't know about CGT.

Peter Forster
Oop North
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Postby peterj » Fri 9 May 2008 13:43 GMT

If you are a tax resident of Australia (check the ATO website for current info - they have many "quiz" type tools to allow you to check these things) you will, I believe, be taxed on all worldwide income including rental. Memory tells me that you MAY be able to offset some rental income against costs incurred such as mortgage interest, agents fees, repairs etc, but you should also be able to find info on this on the ATO website. You will, I believe, only be able to dodge tax if your total worldwide income is below the tax threshold.

If you don't buy a house here, I believe that you MAY be entitled to a CGT exemption on the sale of your last owned primary residence (if this exists at all in your circumstance, there is a time limit, but I believe it is several years).
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Postby rainford1 » Sun 10 Aug 2014 07:23 GMT

Hi - I'd like to join this string. I have been in Oz for 20 years and have rented out my house in London for all of this time. It was my only home when I was in the UK. I have declared it to the British tax authorities during this time as a non resident landlord, however the rental income has always fallen under the tax threshold and I haven't paid tax on it. I have just found out that I should have been declaring this as worldwide income and am scared that if I now declare it I will have to pay 'back tax' on it. Am I to understand that even though the British tax authorities are happy for it not to be taxed, the Australian tax authorities are not? By the way I don't bring any of the income to Oz - it is sitting in a UK bank account. Can anyone help me or refer me to an accountant/tax advisor that can? Thanks
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