My spouse has submitted self-assessment tax returns on our let property in the UK.  I will be submitting a tax return this year for the property that we have let in joint names. We have had property in Australia let for nine years and been submitting tax returns to the Australian Tax Office.  Both Australian let properties have been running at a loss and therefore we have a large amount of tax credit.  Unfortunately, we were not aware that we had to declare foreign rentals to the UK tax office, and therefore have not indicated that we have these properties.

When looking at the income we would not owe HMRC any money and would also be in tax credit if we had filed the tax returns in UK. Obviously, we want to do everything right and would like to record our tax credit in the UK so we could get the foreign rental correct.  It is obvious that this has been an oversight as we have filed returns in Australia.  Would you be able to advise what the best course of action is?

If you look at www.hmrc.gov.uk/manuals/pimmanual/PIM4703.htm you can see that an overseas property business is separate to a UK property business and losses from one cannot be offset against profits from the other. It is in your interest to register these overseas property losses with HMRC so that if one day you begin to make profits from the Australian property you can offset these brought forward losses against those profits. If you look at www.hmrc.gov.uk/manuals/pimmanual/PIM4210.htm you can see that no special claim is required for rental losses.