Once you become a permanent resident you are required by Australian tax law in include your total worldwide income in your tax return and this includes your UK property. You may think that the ATO will never find out but in 2014-15 the tax office matched its records with offshore accounts held with 14 different international banking groups.
Does this mean I need to pay more Tax?
Not necessarily is the answer and in the case of a lot of people from the UK who bought houses during the property boom may actually be entitled to a refund and pay less tax now than you do currently.
What do I need to do?
Inform yourself of the deductions available under the Australian system by reading this blog and get yourself a good accountant. We deal with accountants across Australia and if you wish we can recommend one in your area if you contact us through our website at www.ryancc.net.
So what are the deductions available?
Let’s take the example of someone who recently got their permanent residency and now want to include their UK Property in their Australian tax return.
Tom earns $100,000 a year from his job as a plumber. He bought a newly built apartment in Liverpool in 2006 for £200,000. He arrived in Australia in 2010 and just got his permanent residency. The apartment currently rents for £1100 a month.
In Toms tax returns he is obliged to include this rent on his Liverpool property as income, this increases his taxable income by £13,200 a year or $22,308. However, Tom can also the include the deductions shown in the table below.