Hi guys, sorry in advance for the length of this post any input would be much appreciated.
For the last few years I have been preparing to enter into the property market in Melbourne and having finished my studies I was just waiting on the last component which was establishing adequate cash flow.
I have finally been offered an opportunity which will supply me with this cash flow however it comes with a very unexpected situation which has made all my other preparations pretty much redundant.
I have been offered a job working in Dubai for 3 to 6 months with the last week of each month seeing me travel to London to work there. After the 3 to 6 month period I will move over to London more permanently but I will still be working on jobs which are based in Dubai as well as London. My salary package is in pounds regardless of location.
My question is, now with this new situation, how do I continue on with my property investing goals with the main consideration being tax?
With my salary being tax free in Dubai and taxed in London I imagine it will be quite confusing. Is there a way to take full advantage of my situation? Is my only option to invest in Dubai property to retain tax benefits or can I invest in AUS with my earnings without forfeiting all the gains from the tax free income?
I understand that this is a complex situation and I will need to see an accountant before I commit but while my knowledge of AUS tax rules is ok, I have no idea what happens once you start traveling especially to countries that are tax free so any help at all will be very much appreciated or even if you can point me towards an accountant that could help me in this position?
Thanks in advance!
se7en
You would be a non resident for tax puposes. But you could still invest here – assuming you are a citizen, there would be no restrictions.
There are some CGT issues and any loss would be carried forward until the rents increase or your return.
You would have to check the situation in UK as this may affect your tax there.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
As Terry mentioned as long as you are an Australian Citizen you shouldn't have too many issues.
I have a forum client who contacted me a week or so ago who is based in Dubai and asked us to source an investment property for him as well as finance the deal.
No real issues in doing either however some lenders love Non resident applications and others don't.
In most cases they convert your overseas income to AUD and then apply Australian rates of Tax even if you are in a Country like Dubai where it is Tax free (appreciate being paid in GPB this wont be the case).
Tax would be paid in the UK and you will receive a Tax credit here for any Tax Paid (Don't worry being a pom i have UK assets so know all about UK Tax rates).
If you find the right Australian property you will probably find that it may well be neutral or positively geared especially if the yield is right.
Careful property selection will be imperative to enable you to carry on your wealth creation.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Thanks for your comments Terry, I guess my goal here is to just make the most of the situation, I would hate to find out down the track that I was not taking full advantage of the situation..Ill be sure to set it all up correctly from the get-go. Any further advice or direction, would be much appreciated from you.
Thanks Qld007, this info is very helpful!
Just to clarify does the fact that I am being paid in GPB effect my tax even though I will be working in Dubai for the most part? I'm also curious as to how my salary will look going into my bank account… will my pay simply be say 30% lower for the week that I work in London compared to Dubai? Also are you saying "appreciate being paid in GPB" because this means that banks in AUS will not assess my pay as being taxed at the normal AUS rates as they would if I was paid in Dirham but rather British rates which are better than AUS?
Any other advise would be much appreciated, it sounds like you are all over this but as you can probably tell my knowledge in this area is fairly minimal.
Cheers
se7en
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