Can I claim a tax deduction from my overseas property mortgage?

Question

I'm originally from the UK and still have a house there which is now tenanted. Can I claim the interest on the mortgage for this property as a tax deduction in Australia where I am now resident?

Thanks for any replies!

Answer 1

As an Australian resident I assume you will lodge an jncome tax return here. In this you are required to include income from whatever source or country. When you show the income from that source you will be able to claim the mortgage interest as a tax deduction.  

Answer 2

If you are an Aust resident then you need to disclose all your income in Australia (and claim a credit for any taxes you have paid in the UK).  This means you can claim the interest you pay overseas as a deduction. HOWEVER, there are rules that require quarantining of foreign income - these rules have recently changed. if you are talking about the year that just ended (Jun 08), this should still apply:

"Foreign losses are quarantined from domestic income and the amount of the loss is determined separately for four classes of assessable foreign income." in effect this means that if you have a loss from the property, you won't be able to use this loss to reduce your taxable income in Australia. D'oh!