I have an apartment in London which is cash flow positive. The profit is my only source of income in the UK and as such is below the UK tax threshold so I don’t pay any UK tax.
Does anyone know if I can apply Australian depreciation allowances to minimise my Australian tax liabilities. If so, how would I obtain a depreciation schedule given that I couldn’t get an Australian quantity surveyor to inspect the property.
Regards,
Billyi will take a guess for you billy – ozzie gov’t wants you to pay tax on your worldwide income – so if you are a resident for tax purposes in oz the ato is interested in all your activities. Where are you are resident for tax purposes? (speak to a good tax lawyer)
Then i continue guessing — so if you do your income tax return in the uk and given all the local rules and deductions available to you the number is still a plus number the ato wants some. Although it has been a very long time since i have seen an on paper plus number for a property tax return given the significant depreciation allowance available in most places.
But i am pretty sure they are not interested in offsetting foreign losses against local income.[blush2]
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I am guessing too, but would think that the ATo would allow depreciation on overseas property as this is an asset used in producing income on which you are being assessed. maybe you would need to use the UK equiv of a quantity surveyor.
Maybe contact the ATO and ask over the phone – ring 3 times as you will get different answers.
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Billy, you’d have to use the UK depreciation rules because that’s where the property is. Should be loads of companies over there doing it.
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http://www.depreciator.com.auBilly
I think you’ll find residential depreciation laws are not the same in the UK.
IE you can only depreciate Commercial properties.
Napier Blakely Winter (Who are linked to Napier Blakeley) will be able to assist you.
When googling in the UK -try “Chartered Surveyors” not Quantity Surveyors…you may have more luck that way.
Or try the http://www.rics.org
Regards
Tyron Hyde
www,washingtonbrown.com.auHi, I have the same question but for property in Asia, eg Singapore.
How do I find a quantity surveyor there?
Are there on-line depreciation schedules that can be done by the owner rather than having to send a quantity surveyor out to the property?
I have heard a quantity surveyor could be flown out from Australia to do the schedule.
Any advice or experience would be appreciated.
Hi Billy,
You need to determine your UK income according to UK tax law. So depreciation would have to be calculated according to UK tax law. Unfortunately you can not apply Australian Tax Law (or concepts thereof) in determining your foreign source income, the amount needs to be determined according to the relevant local laws in the country of origin, and then the total amount of FSI is included in your tax return and subject to australian tax law.
Having just had a quick look at it I think your out of luck. Looks like you can claim ‘capital allowances’ for repairs and renovations, but I can not find any mention of claiming any part of the purchase price. there’s also a wear and tear allowance for furnished properties.
Any update on this? From my reading I don’t think this final answer is correct and that indeed you can claim depreciation of building construction costs for overseas property. I’m looking into this currently for my 2 properties in the UK, however the only surveyor I have found who offer a tax depreciation schedule to Australian rules for overseas property is Washington Brown. They seem through, however are expensive at around $2000 per property depreciation schedule, which is a lot more than I wanted to pay!
Anyone have any information or sources?I looked high and low for either a US-based or an Australian-based firm that could produce ATO-compatible depreciation reports for my Texas properties. Washington Brown (Australian firm) was the only one I found. But I only used their reports for my ATO filings, not for my IRS filings in the US. For that I generated a depreciation schedule myself using an online MACRS depreciation calculator. Different country, different rules for calculating depreciation.
Rob: I did find one other Australian-based firm that produces ATO-compatible depreciation reports, and for UK-based properties no less. But I don’t remember the name! I’ll try to find it again and, if I do, I’ll post it here.
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This reply was modified 8 years ago by
luvaul. Reason: at symbol linked to wrong member, so removed it
Rob: the name of the other company was Ryan & Associates (in Perth), website: http://www.ryanest.com. They have a form you can fill in at http://www.ryanest.com/#!tax-depreciation-schedules/c1rkj (click the “UK Property” button). I spoke to one of their associates who said they don’t have people on the ground (yet) in the UK to perform an inspection (which would be required if your e-documentation isn’t sufficient).
Cheers,
Lance-
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