Renting out house and working abroad
Discussion
Wondering about taking a job overseas for a for a few years. If I rent out my house in the UK is it treated as second home and taxed differently? Rental income would be my only income in the UK so presumably I can offset any repair costs and just declare the profit via self assessment, or does self assessing become an issue if I'm not resident in the UK?
It depends on your mortgage provider - when I first moved my previous bank didn't allow for me to be out of the country so effectively called the mortgage and I paid them a nice big early redemption fee for the pleasure 
I've now found a bank that is ok with me as an expat and am on more of a residential mortgage rate with a consent to let - I'd try speaking to your lender and seeing whether this is something they offer.
Alternatively (as some people do), you could not tell your bank and hope they don't find out! Most lettings agents, however want proof that your lender is happy for the property to be let and won't manage your place without.
I've now found a bank that is ok with me as an expat and am on more of a residential mortgage rate with a consent to let - I'd try speaking to your lender and seeing whether this is something they offer.
Alternatively (as some people do), you could not tell your bank and hope they don't find out! Most lettings agents, however want proof that your lender is happy for the property to be let and won't manage your place without.
Whilst you own a primary property in the UK HMRC will tax you on all earnings, including overseas (double taxation treaties will negate most of this).
You have to be wholly removed from any connection to the UK to avoid UK tax. Any income you receive from UK sources will therefore be taxed accordingly.
Unfortunately it is not as simple as it once was.
You have to be wholly removed from any connection to the UK to avoid UK tax. Any income you receive from UK sources will therefore be taxed accordingly.
Unfortunately it is not as simple as it once was.
Presumably renting out my house and living full time abroad would mean is not a primary residence? Although I'd probably be doing up up to 6 months away before my wife moves over permanently so it still would be primary residence for a while.
There's a several brits already working here (I'm currently on site as a contractor) but I don't want to start asking too many questions until I'm sure I want to do it.
There's a several brits already working here (I'm currently on site as a contractor) but I don't want to start asking too many questions until I'm sure I want to do it.
Edited by RizzoTheRat on Thursday 24th August 09:05
W99KSY said:
It depends on your mortgage provider - when I first moved my previous bank didn't allow for me to be out of the country so effectively called the mortgage and I paid them a nice big early redemption fee for the pleasure
I've now found a bank that is ok with me as an expat and am on more of a residential mortgage rate with a consent to let - I'd try speaking to your lender and seeing whether this is something they offer.
Alternatively (as some people do), you could not tell your bank and hope they don't find out! Most lettings agents, however want proof that your lender is happy for the property to be let and won't manage your place without.
My daughter is working abroad and part of the reason is so that she can afford to get herself on the housing ladder here. I've now found a bank that is ok with me as an expat and am on more of a residential mortgage rate with a consent to let - I'd try speaking to your lender and seeing whether this is something they offer.
Alternatively (as some people do), you could not tell your bank and hope they don't find out! Most lettings agents, however want proof that your lender is happy for the property to be let and won't manage your place without.
She is effectively more than doubling her salary which will enable her to put down a healthy deposit within a year to 18 months but she intends to let the property whilst abroad. If she really enjoys the expat life, which she seems to be doing so far, she may not return for a few years. She is viewing the purchase as part of her pension arrangement.
Could I be cheeky and ask which bank you use as it seems it would look kindly on this arrangement ?
Cheers,
Tony
RizzoTheRat said:
Sounds like this is more complicated than I originally thought then and will need to sort out properly. Are there accountants that specialise in this area or is it the sort of thing any accountant would deal with.
There is also management of the property and vetting potential tenants to ponder carefullyYeah, I think if I'm going to be away for several years I'd just want to find a reputable agent to manage it for me. I don't really want to be having to fly back to the UK because my tenants washing machine has died 
In Holland managed services like that seem to be the norm, the bedroom window latch on the place I rent over here broke yesterday, e-mailed the agent in the morning and they had someone round to fix it in the afternoon. Having rented several places in the UK, admittedly a few years go, I only ever found one letting agent who actually seemed to care about the condition of the property.
In Holland managed services like that seem to be the norm, the bedroom window latch on the place I rent over here broke yesterday, e-mailed the agent in the morning and they had someone round to fix it in the afternoon. Having rented several places in the UK, admittedly a few years go, I only ever found one letting agent who actually seemed to care about the condition of the property.
Two residential mortgages both on Consents to Let, total income after interest deduction leaves me with effectively zero tax to pay.
I believe there is a special rule / law with respect to working abroad and paying CGT on the main house, if you bought it to live in and not as an investment, Principal Private Residence (PPR), although this is generally considered effective at 90days residence it may be possible to claim if you do not sell the property during your "assignment" and move back in upon your return, I was advised by PwC during my transfer to not sell until I return and can demonstrate residence. Also I am unsure about whether renting this out has an effect, I will worry about it when I return!
The bank didn't care I moved abroad, although I couldn't have got the mortgage initially if I was already an ExPat.
I believe there is a special rule / law with respect to working abroad and paying CGT on the main house, if you bought it to live in and not as an investment, Principal Private Residence (PPR), although this is generally considered effective at 90days residence it may be possible to claim if you do not sell the property during your "assignment" and move back in upon your return, I was advised by PwC during my transfer to not sell until I return and can demonstrate residence. Also I am unsure about whether renting this out has an effect, I will worry about it when I return!
The bank didn't care I moved abroad, although I couldn't have got the mortgage initially if I was already an ExPat.
It's a fairly complicated topic and was partially covered in this thread, but the law has changed a little since then
https://www.pistonheads.com/gassing/topic.asp?h=0&...
I am not an expert but have been through this so have an understanding.
- For exemption, you really need to be sent to work away by your employer. This could be abroad or it might be an "uncommutable" distance from your primary residence.
- If you move away, you really need to move back into the property to prove that it is your primary residence and they talk about 6 months but in reality there is no defined time, you just have to live there e.g. post and bank accounts to be there
- There is lettings relief available
- There are 18 months (used to be 3 years) where you can claim exemption
- If you can prove that this really was your only residence and that you were sent away with work, then it can be a zero CGT answer (It was for me) but you need to meet criteria and you will need to read the thread above, the tax guidance sheets and then I would talk with an expert
If you have specific questions I can try to answer, but it's complex!
https://www.pistonheads.com/gassing/topic.asp?h=0&...
I am not an expert but have been through this so have an understanding.
- For exemption, you really need to be sent to work away by your employer. This could be abroad or it might be an "uncommutable" distance from your primary residence.
- If you move away, you really need to move back into the property to prove that it is your primary residence and they talk about 6 months but in reality there is no defined time, you just have to live there e.g. post and bank accounts to be there
- There is lettings relief available
- There are 18 months (used to be 3 years) where you can claim exemption
- If you can prove that this really was your only residence and that you were sent away with work, then it can be a zero CGT answer (It was for me) but you need to meet criteria and you will need to read the thread above, the tax guidance sheets and then I would talk with an expert
If you have specific questions I can try to answer, but it's complex!
Other things to do if you are moving abroad:
- Open up a bunch of bank accounts with nothing in them so you can move between banks easily when living abroad. Opening a UK bank account with a foreign address did not prove easy
- get lettings consent
- know that you cannot pay into ISA's, but you can retain what you have
- stay on the electoral register and register well in advance to vote. It will also help you get credit/mortgage on your return
- Transfer if possible your UK bank accounts to a parents address/friend you trust etc. It makes it easier to get cashcards etc
- Most insurance companies for BLT will want to see the bank consent before you let. It cost me a fee to get this from the bank.
- Get your EHIC card (or whatever that is called today) depending upon where you are going.
- If going to the US, be aware of health costs... ouch.. If going to Spain, EHIC will help
- Enjoy, it's complex, but if you think about too much before moving, you'll never go and it's worth it
- Open up a bunch of bank accounts with nothing in them so you can move between banks easily when living abroad. Opening a UK bank account with a foreign address did not prove easy
- get lettings consent
- know that you cannot pay into ISA's, but you can retain what you have
- stay on the electoral register and register well in advance to vote. It will also help you get credit/mortgage on your return
- Transfer if possible your UK bank accounts to a parents address/friend you trust etc. It makes it easier to get cashcards etc
- Most insurance companies for BLT will want to see the bank consent before you let. It cost me a fee to get this from the bank.
- Get your EHIC card (or whatever that is called today) depending upon where you are going.
- If going to the US, be aware of health costs... ouch.. If going to Spain, EHIC will help
- Enjoy, it's complex, but if you think about too much before moving, you'll never go and it's worth it
The jiffle king said:
Other things to do if you are moving abroad:
- Open up a bunch of bank accounts with nothing in them so you can move between banks easily when living abroad. Opening a UK bank account with a foreign address did not prove easy
- get lettings consent
- know that you cannot pay into ISA's, but you can retain what you have
- stay on the electoral register and register well in advance to vote. It will also help you get credit/mortgage on your return
- Transfer if possible your UK bank accounts to a parents address/friend you trust etc. It makes it easier to get cashcards etc
- Most insurance companies for BLT will want to see the bank consent before you let. It cost me a fee to get this from the bank.
- Get your EHIC card (or whatever that is called today) depending upon where you are going.
- If going to the US, be aware of health costs... ouch.. If going to Spain, EHIC will help
- Enjoy, it's complex, but if you think about too much before moving, you'll never go and it's worth it
Useful stuff thanks.- Open up a bunch of bank accounts with nothing in them so you can move between banks easily when living abroad. Opening a UK bank account with a foreign address did not prove easy
- get lettings consent
- know that you cannot pay into ISA's, but you can retain what you have
- stay on the electoral register and register well in advance to vote. It will also help you get credit/mortgage on your return
- Transfer if possible your UK bank accounts to a parents address/friend you trust etc. It makes it easier to get cashcards etc
- Most insurance companies for BLT will want to see the bank consent before you let. It cost me a fee to get this from the bank.
- Get your EHIC card (or whatever that is called today) depending upon where you are going.
- If going to the US, be aware of health costs... ouch.. If going to Spain, EHIC will help
- Enjoy, it's complex, but if you think about too much before moving, you'll never go and it's worth it
- I've lived in the house for about 12 years, and it's only property I own, not sure if the fact that I clearly didn't buy it as a BTL makes any difference to anything
- I'd aim to pay off the mortgage before I leave so won't need letting consent, but will presumably need to prove to the insurers that I don't have a mortgage.
- I'd be packing up my UK job and getting a new one with a different organisation so I assume it'd be outside the CGT exemption you mention
- Interesting thought about bank accounts, I could move them to my parents or sisters address I guess, but it makes sense to open an extra one if I'm ever likely to want one. Only just closed down an old Lloyds account the other week, D'Oh
- Can't pay in to ISAs but with the new tax free limit on savings I can presumably have a reasonable amount of savings without issue, assuming that's valid for someone out of the country
- Can I stay on the electoral register for my current area with a postal vote sent to a foreign address, or a family membour in a different area?
- Already have an EHIC card (not sure if they're be any use post 2019) and the job includes a health policy that I think is fairly good and might also cover the wife
HMRC's approach on this area was that if you HAD to move abroad because your employer sent you abroad - and as a result you had to leave your UK main residence (which is normally CGT exempt), HMRC would not levy CGT on the subsequent sale of the property when it was eventually sold.
If you rented it out in the meantime, you would, of course, have to return the rental income on a self assessment tax return and pay any taxes arising (subject to Double Tax Agreements in place between the UK and the country in which you have been living).
As always, the rules are kept a bit open so that the individual circumstances can be reviewed.
If you rented it out in the meantime, you would, of course, have to return the rental income on a self assessment tax return and pay any taxes arising (subject to Double Tax Agreements in place between the UK and the country in which you have been living).
As always, the rules are kept a bit open so that the individual circumstances can be reviewed.
Thanks Eric.
So as a planning assumption:
So I'd then class as Non Domiciled, and looking at https://www.gov.uk/tax-foreign-income/non-domicile...
"You don’t have to pay tax on foreign income or gains (even those you bring into the UK) if you get the ‘foreign workers’ exemption’.
You qualify if:
all your foreign income has been subject to foreign tax (even if you didn’t have to pay, for example because of a tax-free allowance)
So if my only foreign income is from my salary, I wouldn't have to pay tax on any money I move back to the UK?
So as a planning assumption:
- Income from letting the house, less any maintenance etc, would be subject to standard income tax
- Income from savings in the UK would be subject to standard income tax
- If I sold the house I'd pay CGT on the increase in price from the day I moved out
- If I live in the house for a period of time when returning to the UK I wouldn't pay CGT on it if I sold it?
So I'd then class as Non Domiciled, and looking at https://www.gov.uk/tax-foreign-income/non-domicile...
"You don’t have to pay tax on foreign income or gains (even those you bring into the UK) if you get the ‘foreign workers’ exemption’.
You qualify if:
all your foreign income has been subject to foreign tax (even if you didn’t have to pay, for example because of a tax-free allowance)
So if my only foreign income is from my salary, I wouldn't have to pay tax on any money I move back to the UK?
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