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Foreign Rent Evaluation

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Newbie

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Dear community,

I'm a PR and a few months back submitted my annual taxes.

I am renting out an apartment in a foreign country and in the form, I had a couple of confusing fields:

1. Assessable foreign source income - Under this I entered the total rent taxable amount (e.g. 20k)

2. Net foreign Rent - Under this field I entered the taxable amount after reducing some minor expenses (e.g. 19k)

Now I have paid the annual tax for this property in the country it is at (e.g. 2k) and would like to claim the amount according to the offset.

How do I go about amending the amounts 1 and 2? I saw a few calculation examples on the website but not sure about these fields.

I hope the question is clear.

Kind regards,

Yuval

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Accepted Solutions

Most helpful response

Taxicorn

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@Yuval_T 

 

If income is derived by an Australian resident from a rental property that is located overseas and interest on a mortgage is paid to a foreign lender there are withholding obligations that may have to be addressed.

 

Generally, for the interest expense to be tax deductible the taxpayer must register as a PAYG withholding remitter and remit to the ATO 10% of the interest paid to the non-resident lender. 

Any deductible foreign interest and associated fees are a debt deduction and claimed at Item D15 (not Item 20).

 

If tax has been paid in another country on the rental income, a foreign income tax offset may be able to be claimed in the Australian tax return. In determining liability to Australian tax on the foreign-sourced income it is necessary to consider any applicable double tax agreement contained in the International Tax Agreements Act 1953 (the Agreements Act).

1 REPLY 1

Most helpful response

Taxicorn

Replies 0

@Yuval_T 

 

If income is derived by an Australian resident from a rental property that is located overseas and interest on a mortgage is paid to a foreign lender there are withholding obligations that may have to be addressed.

 

Generally, for the interest expense to be tax deductible the taxpayer must register as a PAYG withholding remitter and remit to the ATO 10% of the interest paid to the non-resident lender. 

Any deductible foreign interest and associated fees are a debt deduction and claimed at Item D15 (not Item 20).

 

If tax has been paid in another country on the rental income, a foreign income tax offset may be able to be claimed in the Australian tax return. In determining liability to Australian tax on the foreign-sourced income it is necessary to consider any applicable double tax agreement contained in the International Tax Agreements Act 1953 (the Agreements Act).