I'm moving overseas, how does it affect my IP and tax implications.

Hi,
I'm being transferred to Canada in 2010 and will be away for about two years. While there I will be paid in Canadian dollars (from Canada) with a work permit. I have a couple of Investment Properties, one marginally positive geared, one substantially negative geared.

With no income, other than the small positive geared property, what are my options? With only being away for a couple of years, does it make any difference. Should I sell them or hold them and if I hold them what are my tax implications? I've owned them both for about 2.5 years.

Thanks in advance.

Ray

Firstly, speak to your own accountant about your own situation.

My understanding is that once you are outside of Oz for 6mths or more, your income earned overseas is not touched (if there is a suitable tax agreement in place with Canada). 

The investment property income will be taxed in Australia at 30c in every dollar.  You cannot rescue your cash by sinking it into superannuation.

You'll have nothing to negative gear your property against - if it makes a loss, the loss gets carried over and can be counted in future tax years (not sure how long you can carry the loss for - look into that).

I think you will probably be a non-resident for tax purposes so you will be assessed in Canada on your income. You will probably have to declare the rent over there. You will also need a lodge a tax return here, but would get an offset for any tax paid over there. Besides, your income from the property may be close to nil anyway with the positive offsetting the loss.

Terryw
Finance Broker
Solicitor