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Owning Investment Property while on Working Visa in the UK

Discussion in 'Accounting & Tax' started by Mon15, 14th Jul, 2016.

  1. Mon15

    Mon15 New Member

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    I currently own an investment property and will be moving overseas on a working visa to the UK for 2 years. Am I still required to submit a tax return each year while I am away in the UK?
     
  2. House

    House Well-Known Member Premium Member

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    Yes, as long as you own an income producing asset in Aus you will.

    What will your residency status be while living abroad? IIRC, if you remain an Aus citizen you have to declare all your foreign income too. Might be worthwhile looking into becoming a non-resident ;)
     
    cheekykoon likes this.
  3. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    Holding a working Visa does not count as emigration to the UK and the ATO may consider that your tax residency remains in AU the whole time for that reason.

    House - Citizenship has Nil to do with tax unless you are a US or Eritrean citizen. These are the only countries that tax based on citizenship.
     
  4. MikeLivingTheDream

    MikeLivingTheDream BCOM MCOM MTAX CPA CTA Registered Tax Agent

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    And Philippines as mentioned before
     
  5. House

    House Well-Known Member Premium Member

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    Citizenship may not but residency does. If the ATO classifies you as a 'foreign resident for tax purposes' you don’t include any overseas income in your Australian return. So you can be an Aus citizen but non-resident for tax purposes of you meet certain criteria. Or so is my understanding.
     
  6. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    Test of residency = Use the ATO calculator. The term emigrate requires more than a temp visa. A permanent right to reside in UK is required.

    This residency issue affects a substantial number of AU people who seek to work PT and travel. And it works both ways. The Govt has also announced change to the tax free threshold...The backpackers tax. Its on delay and maybe will never make it. Nationals hate it as it affects fruit picking. ie Rate of tax would be 32.5% v's Nil. UK has similar provisions coming.
     
  7. inertia

    inertia Well-Known Member

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    I didn't have a rental property at the time, but when I did a working holiday in the UK, I was taxed in Australia for that income. Fortunately I that meant I wasn't taxed (as much) in the UK, and got a massive tax return from that. I didn't bother looking into which country would be better to declare my income - I figured I was on a working holiday and it would probably just be Australia.

    One thing to be aware of - I suspended my health insurance in AU while I was overseas, but when I came back and submitted my tax return, I had to pay the levy as I didn't have health insurance for that period. It probably would have been better for me to drop my cover to the minimum instead of suspending it for the ~13 months I was out of the country.

    Cheers,
    Inertia.
     
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  8. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    Medicare isnt always fair and either is the surcharge. I reckon the other bad bit to the surcharge is for defence staff.

    ADF staff get free Medicare (not their spouse). BUT.....They must have private health insurance or they can get slugged with the levy. I dont think its right. They actually arent allowed to use private hospitals for some issues!! The higher risk takers in defence get paid well and its very common. They should be given exemption from the levy too.
     
    Last edited: 15th Jul, 2016