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My husband saw this in Australian Property Magazine October 2009 and thought it would be of interest - unfortunately although this article is in the magazine I can't find it online (Welcome to API National).

This is a subject that comes up from time to time as people moving to Australia try to decide whether to sell their home or rent it out. The ATO (Australian Tax Office) has issued an interpretative decision 2009/93 (ATO ID 2009/93 - Income Tax: assessability of rental income received by Australian resident from the United Kingdom) and API have written about it this month.

I've attached the article but it didn't scan in too well so here is the article typed below too:

Earning Rent From Overseas

The Australian Tax Office has issued Interpretative Decision (ID) 2009/93, probably as a bit of a reminder that Australian residents are taxable on on the net rent (profit) they receive from overseas rental properties writes Julia Hartman.

Most countries where the property is located will also tax the net rent, and most of our double tax agreements give the country where the tax is located the primary (but not exclusive) right to tax the property. Double taxation is overcome by the country of residence of the owner of the property giving a tax credit for any tax paid in the country where the property is located.

This ID related to a property in the United Kingdom owned by a resident of Australia for tax purposes. It's of interest because it gives a practical example example of the UK tax laws and the application of our double tax agreement with the UK. According to this ID,if we were to purchase a UK property, we can expect to have to lodge a UK tax return and pay tax on the net rent, then also declare the net rent in our Australian tax return and include the amount of tax paid in the UK.




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