Tax Loses in Australia

[mayerlogue]

I am a PR in Singapore and think I understand the tax implications of the change in rules over the last few years.

One thing I'm confused about is tax loses in Australia. I have my house in Australia rented out but make a loss on it. I keep getting different advice about tax loses

Can I carry tax loses forward to use if/when I return to Australia in the future. Is there a time limit and $ limit?

[Mad Scientist]

I am a PR in Singapore and think I understand the tax implications of the change in rules over the last few years.

One thing I'm confused about is tax loses in Australia. I have my house in Australia rented out but make a loss on it. I keep getting different advice about tax loses

Can I carry tax loses forward to use if/when I return to Australia in the future. Is there a time limit and $ limit?

No, you cannot . Have you informed ATO of your overseas employment?

[ausinsg]

Hi MS,

I am curious why the tax loss cannot be carried forward? Usually it can be.

The thing to note is that there are tax losses on income and deductions, and there are capital losses based on when you are buying and selling an asset.

When I took a look at the ATO website I found the following to support the idea that a tax loss can be carried forward.

How individuals utilise losses
Individuals, both those in business (sole traders and partners) and those not in business, can generally carry forward a tax loss indefinitely, but must utilise a tax loss at the first opportunity.

That is, if your income in the current income year exceeds your current year's deductions, you must offset any losses you have carried forward from previous years against your current year's income. You cannot choose to hold onto losses to offset them against future income if they can be offset against the current year's income.

http://www.ato.gov.au/corporate/PrintFr ... 262223.htm

Last Modified: Wednesday, 3 August 2011

To the OP,
As MS mentioned you need to determine whether you are still classed as an Australian resident or not.

Australian and foreign income
Australian residents are taxed in Australia on their worldwide income; foreign residents are taxed in Australia on income derived in Australia. For the purpose of tax losses, this means that:

Australian residents now calculate an overall tax loss on the basis of their worldwide income and deductions - but there are restrictions on the utilisation of tax losses incurred in relation to foreign income before 1 July 2008 (see Foreign losses)

foreign residents calculate a tax loss on the basis of their Australian income and deductions incurred in earning that income.

(from the same document)

A final thing to keep in mind if you are renting out your family home, is that you do not exceed six years of renting it out, or Capital Gains Tax will need to be apportioned on the gain exceeding six years.

http://www.ato.gov.au/individuals/conte ... /36887.htm

[Mad Scientist]

I did that when we were living in overseas. When we came back, ATO said no way although we rent out the house while away. My mistake is I did not declare I was a non resident before we left for overseas. I could not be bothered to argue with them on this issue as it came to a point of stalemate.

[ausinsg]

Oh ok. I remember Nath21 post a list of things here on how to be treated as a non-resident.

It sounds quite annoying that the ATO took that stance!