Financial Situation & Possible Next Steps
Discussion
I have seen a few threads like this on here and (generally 
) they get some very insightful responses, so here goes.
After living overseas for some time I will return to the UK at the end of 2021 and want to understand what financial planning options I have and which is best.
A summary...
- Own an apartment in UK. Value 240k. Remaining mortgage 158k. Has been let out but soon to be vacant. Likely difficult to rent out again (won’t go into why). Should be relatively easy to sell if go down that route.
- 36k savings
- 14k investments which I would rather leave alone but could access as required
- No student loan remaining
- Pension payments ongoing
When I return to the UK I will be with a family (Wife plus kid) which is opposite to my single status when I left the UK years ago. Life over etc. The apartment is not suitable for us to move into. Want to buy a family home circa 350k. Reason for being cash savings heavy as above is upon return to UK thinking about what we will need to buy (car etc) and having a kid to support with childcare so seems a good idea. Scope to save 10k before returning to the UK so could consume savings if makes sense to...
Scenario proposals....
1. Sell apartment. Buy a house ASAP (maybe enjoy stamp duty window) ready to move into on return to the UK. Challenge of getting mortgage from overseas and with a foreign spouse who has no UK financial record.
2. Sell apartment and buy a cheaper investment property to keep ticking over (say 120-140k). Intend to keep that for long term. Wait to purchase family home until after return to the UK.
3. Keep apartment empty and try to rent it out (again... difficult). Can’t see any real financial benefit to keeping the apartment if it’s empty unless there is a huge penalty for selling it before mortgage deal is up (1.5y remaining of a 2y fixed deal). Main benefit of keeping it would be having a permanent address for wife’s visa application when returning from the UK.
I think roads will lead to selling current apartment eventually, so my simple thinking of it losing its tenant soon, stamp duty holiday could boost sale price now and it won’t be suitable for us to live in makes me think to sell sooner rather than later.
I think there are definitely some complexities in the above and it’s probably over simplifying it a bit; but if any suggestions or input on the above that would be greatly appreciated.
) they get some very insightful responses, so here goes.After living overseas for some time I will return to the UK at the end of 2021 and want to understand what financial planning options I have and which is best.
A summary...
- Own an apartment in UK. Value 240k. Remaining mortgage 158k. Has been let out but soon to be vacant. Likely difficult to rent out again (won’t go into why). Should be relatively easy to sell if go down that route.
- 36k savings
- 14k investments which I would rather leave alone but could access as required
- No student loan remaining
- Pension payments ongoing
When I return to the UK I will be with a family (Wife plus kid) which is opposite to my single status when I left the UK years ago. Life over etc. The apartment is not suitable for us to move into. Want to buy a family home circa 350k. Reason for being cash savings heavy as above is upon return to UK thinking about what we will need to buy (car etc) and having a kid to support with childcare so seems a good idea. Scope to save 10k before returning to the UK so could consume savings if makes sense to...
Scenario proposals....
1. Sell apartment. Buy a house ASAP (maybe enjoy stamp duty window) ready to move into on return to the UK. Challenge of getting mortgage from overseas and with a foreign spouse who has no UK financial record.
2. Sell apartment and buy a cheaper investment property to keep ticking over (say 120-140k). Intend to keep that for long term. Wait to purchase family home until after return to the UK.
3. Keep apartment empty and try to rent it out (again... difficult). Can’t see any real financial benefit to keeping the apartment if it’s empty unless there is a huge penalty for selling it before mortgage deal is up (1.5y remaining of a 2y fixed deal). Main benefit of keeping it would be having a permanent address for wife’s visa application when returning from the UK.
I think roads will lead to selling current apartment eventually, so my simple thinking of it losing its tenant soon, stamp duty holiday could boost sale price now and it won’t be suitable for us to live in makes me think to sell sooner rather than later.
I think there are definitely some complexities in the above and it’s probably over simplifying it a bit; but if any suggestions or input on the above that would be greatly appreciated.
No replies? I'll have a try.
If it was me I would move back to the UK first. Get a short term rental. Then sell the apartment. Avoids the issues of selling while abroad.
After the sale you wil know how much cash you have to play with for a new house. You will be a buyer with no chain so in a good position to buy. You can take your time finding the right house.
Caveat? Look into the capital gains tax issue with the apartment. As it isn't your mains residence it will come under the tax. Someone who knows about this could advise on whether your annual allowances would cover it, Whether there is any advantage to getting the apartment in joint names before selling to reduce capital gains tax.
If there was going to be a big capital gains bill that might effect the decision on whether to sell or not.
If it was me I would move back to the UK first. Get a short term rental. Then sell the apartment. Avoids the issues of selling while abroad.
After the sale you wil know how much cash you have to play with for a new house. You will be a buyer with no chain so in a good position to buy. You can take your time finding the right house.
Caveat? Look into the capital gains tax issue with the apartment. As it isn't your mains residence it will come under the tax. Someone who knows about this could advise on whether your annual allowances would cover it, Whether there is any advantage to getting the apartment in joint names before selling to reduce capital gains tax.
If there was going to be a big capital gains bill that might effect the decision on whether to sell or not.
In not too dis-similar a situation to you, but different timescales.
In your shoes, I would sell the property (sentiment seems positive at that end of the market with stamp duty holiday - humans/Brit house hunters are wired for 'bargains).
Unless you know exactly where you want to live, I'd wait and buy when you return, I don't foresee house prices shooting north in the next 12 months.
If you need a contact for mortgages as an expat drop me a pm.
I'd also seek advice from a tax expert to time your return correctly.
In your shoes, I would sell the property (sentiment seems positive at that end of the market with stamp duty holiday - humans/Brit house hunters are wired for 'bargains).
Unless you know exactly where you want to live, I'd wait and buy when you return, I don't foresee house prices shooting north in the next 12 months.
If you need a contact for mortgages as an expat drop me a pm.
I'd also seek advice from a tax expert to time your return correctly.
How unsuitable is the apartment. Seems to me that living in it when you move back will be one less thing to worry about and reduce any cgt liabilities you'll have. Otherwise you'll have an empty property you're trying to sell and be paying rent for somewhere else, which doesnt make sense to my brain
Beware the split year tax rules if your UK flat ends up being your only property (owned or leased/rented). You could potentially become liable for UK tax on overseas earnings even before you return. It was mentioned above, but get good tax advice before you act. Timing could be important.
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