Author Topic: What to do with your house in UK??  (Read 6938 times)

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Offline loz

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What to do with your house in UK??
« Reply #10 on: September 26, 2005, 23:50:58 PM »
The idea of letting your home in the uk on paper appears to make good business sense, however, what of the tax implications?

Non-resident UK landlords is approximately 25% of the the net monthly rental, ok you may be lucky enough to off set some personal allowance deductions.  

Capital Gains tax, charged on the assets the value increases from the date the property was obtained through to the selling of the property.

Also if there is still a mortgage on the property the mortgage lender will have to be notified, in most cases this is not a problem and no objections are raised.  

The local authority are going to pay the rental whilst the property is vacant, but, do they waiver the whole of the council tax for vacant property or is the owner/landlord still expected to pay the council tax less the 25% vacant property discount, which only applies if the property is not furnished. And don't forget the water bills, are these meter or standard? a dripping tap in an empty property soon amounts to a large bill if on metered water.

Maintenance, insurance, 3 star cover agreements for landlords certificates etc. the bills are starting to mount and you have yet to receive your first months rental.

What of the accountants bills? yes they can save you money but cost you for this service.  So unless you are an accountant or yourself fully conversant with the yearly tax demands and numerous forms it is not as plain sailing as first appears.  



Offline Dippey

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What to do with your house in UK??
« Reply #11 on: September 27, 2005, 09:15:50 AM »
Good points Loz and thanks for raising them, as they say the devil is in the detail.

as an accountant i'll try and answer some in general form, and i won't charge:D. For arguement sake lets say the monthly renatl is £800 pm (£9600pa). Obviously age pays an important factor and if you are still working and earning a wage. For this we shall take it that you are fed up of UK and wish to live abroad but are in your 50's and don't want to touch your pension or your savings yet.

 
quote:
Non-resident UK landlords is approximately 25% of the the net monthly rental, ok you may be lucky enough to off set some personal allowance deductions


So you've made £9600 on rental, then deduct your annual costs for Building insurance, 3* gas service, your personal allowance of 4895 and don't forget your partners allowance of 4895, plus deduct any mortgage payments (interest part only). Now we should have brought the tax amount down to zero or even negative, if not put a provision/accrual in for future maintenance, and we should be looking at paying only 10% tax band on the small amount involved.


 
quote:
Capital Gains tax, charged on the assets the value increases from the date the property was obtained through to the selling of the property.



This is an issue that only arises is you wish to sale the property, there is no bearing on CGT thru renting, and CGT has been covered elsewhere.

 
quote:
The local authority are going to pay the rental whilst the property is vacant, but, do they waiver the whole of the council tax for vacant property or is the owner/landlord still expected to pay the council tax less the 25% vacant property discount, which only applies if the property is not furnished. And don't forget the water bills, are these meter or standard? a dripping tap in an empty property soon amounts to a large bill if on metered water.



The council are responsible for all utility bills from the start of the contract to the end. You need not pay anything.


 
quote:
Maintenance, insurance, 3 star cover agreements for landlords certificates etc. the bills are starting to mount and you have yet to receive your first months rental.



Insurance and 3* cover should not total more than £400, if you can afford to buy a place in Turkey then you should be able to rustle up this amount.
Importantly I'm glad you brought up maintenance, this is an area that you should be aware off, the landlord (you) should make real cash provisions (which are tax deductable) for any major repairs, i.e new roof tiling, new windows etc. The good side is the council will get there people to do any major repairs at a cheaper cost than the yellow pages bridgade.

 
quote:
What of the accountants bills? yes they can save you money but cost you for this service. So unless you are an accountant or yourself fully conversant with the yearly tax demands and numerous forms it is not as plain sailing as first appears.



Flaming accountants, worst than solicitors, taking in consideration of above you should always seek professional advise on any personal money or financial matters. But if they are any good they should get your tax return down to zero and you can even offset there charge against any tax due.

Dipps :)
« Last Edit: September 27, 2005, 09:17:36 AM by Dippey »

Offline pauld

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What to do with your house in UK??
« Reply #12 on: September 27, 2005, 09:50:05 AM »
well answered dipps

Offline loz

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What to do with your house in UK??
« Reply #13 on: September 27, 2005, 10:21:01 AM »
Maybe I am wrong in my thinking but I thought that only one partner could offset the personal tax that being the one having lower rate bands of tax.

What of MIRAS? what are the benefits of opting out? if life does not work out abroad can one opt back in?

All I intend on doing is letting the general joe public see that it is not a matter of emptying the house signing a piece of paper and then living the life of Riley.  



(This is getting to deep for me now, I need another coffee fix)

Offline Dippey

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What to do with your house in UK??
« Reply #14 on: September 27, 2005, 11:10:37 AM »
Make me a coffee too please, actually cancel that, Kate Moss has just arrived..:D:D

No problem Loz your questions were very good for a TB person:D:D and i'm glad you asked even if its not for you there could be questions that others should know about, i myself am on a learning curve here as well, so it gave me some thinking to do.

PS Miras was abolished in April 2000, those were the days! another tax hikes by Gordon, (memo to self to leave UK before the economy really goes tits up in two years time).

dippz

Offline Talk Turkey

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What to do with your house in UK??
« Reply #15 on: September 29, 2005, 16:52:11 PM »
Dippey, thanks very much for taking the time & trouble for your postings on renting your house to a Housing Association. It's an avenue I had never previously considered or was aware of. I will be contacting my local council soon. TT.  8)

Offline crossie

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What to do with your house in UK??
« Reply #16 on: October 04, 2005, 16:13:30 PM »
Well all very informative, but we are selling ours.

Offline puma

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What to do with your house in UK??
« Reply #17 on: October 04, 2005, 19:01:16 PM »
when we go eventually ,we will sell ours too, cannot be bothered with any hassle afterwards

Offline grinrod

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What to do with your house in UK??
« Reply #18 on: October 26, 2005, 21:32:34 PM »
wouldnt want to put my lovely respected neighnours through the trauma either. Hope you are welcomed back with open arms by yours dippey - should you ever need to return.

Offline Dippey

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What to do with your house in UK??
« Reply #19 on: October 27, 2005, 18:07:08 PM »
Unless my neighbours will pay me £60,000 every five years and also guarantee that when they move they will let me vet thier purchasers/my new neighbours- i doubt it. But the financial aspect is immaterial compared with some of the responses.

Interesting responses, i do hope that any person who has children or relations in lease or council care are not offended by some of the responses. Even those CB members or those reading as guests, living in council accomodation or have brought thier property thru the right to buy are not offended by these comments either.

Perhaps if these little english responders "not in my back yard", have a problem with people in lease/council houses, they could get together and put all these what they consider "infidels" in a bus, tube or skyscraper and blow them all up and just get rid of them. Or, the little english reponders can round them up, as done with others groups in the past, and just gas them.:(

Dipps

(edited owing to spelling/gramma!)
« Last Edit: October 27, 2005, 20:46:04 PM by Dippey »




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