Emirgrating but renting our house out - Mortgage Questions?

G_M

I think our biggest problem is that we are just on the SVR, and not tied into a fixed rate agreement.

Surely that is a strength not a problem. You are not tied in for a set number of years so can move your mortgage elsewhere if Halifax do not offer you an acceptable product.

Yes we were naive and thought "respectable" tenants would not deliberately rifle through items which were clearly tucked way to one end of loft space

I'm sure these items were listed on your inventory, which the tenants signed, so if they were damaged/removed you doubtless deducted their agreed value from the deposit?........

we will not be residents of the UK for the next 3 years, will not have any taxable UK income

Yes you will. Rent! So read here.

Current Mortgage payment is £680 a month, we have 20 years left. We will be getting a rental of £695pcm (but this is -10% management fee from the Agent) giving us around £625 rental income.

Budget in to receive 10 months rent per year, not 12, to allow for gaps between tenants, tenants who default etc. Add in maintenance /upkeep costs on the property (the fridge needs replacing, central heating repair) as well as inspections (gas etc). Insurance you've mentioned, but also council tax/utilities between tenants.

puddy

your wife had a meeting today but cant tell what interest rates you're either on now, or have been offered with a BTL mortgage??

you seriouslly need to get a bit more savvy

NatD1978

jenner wrote: »

your wife had a meeting today but cant tell what interest rates you're either on now, or have been offered with a BTL mortgage??

you seriouslly need to get a bit more savvy

She couldn't tell me when I posted because I was at work and so we she. Just back in now so going through the finer details with her.

I leave all the 'financial dealings' to her though, she is the responsible one!!!!

00ec25

NatD1978 wrote: »

We have a repayment mortgage,

Current Mortgage payment is £680 a month, we have 20 years left. We will be getting a rental of £695pcm (but this is -10% management fee from the Agent) giving us around £625 rental income.

just to re-emphasise that you must register with HMRC for the Non Resident Tax scheme because you have a UK rental income of £695 and you can only offset the interest element of your mortgage against the rental income not any capital element,

it is however likely that with all the other costs (gas cert, EPC etc) you will make very little or no net profit

NatD1978

G_M wrote: »

Yes you will. Rent! So read here

00ec25 wrote: »

just to re-emphasise that you must register with HMRC for the Non Resident Tax scheme because you have a UK rental income of £695 and you can only offset the interest element of your mortgage against the rental income not any capital element,

it is however likely that with all the other costs (gas cert, EPC etc) you will make very little or no net profit

Just a quick question - how can the money we get paid in rent be classed at income, when it won't even cover the mortgage payments and we won't be making any profit?

housebuyer_abc

NatD1978 wrote: »

Just a quick question - how can the money we get paid in rent be classed at income, when it won't even cover the mortgage payments and we won't be making any profit?

Firstly you can only offset against tax the interest part of your mortgage payment. If you are paying a repayment mortgage the 'capital' payment part isn't tax allowable.

Even if the rent doesn't cover the interest on the mortgage you still have an income, the fact it does not cover the business outgoings is irrelevant. You have to fill out a self assessment form, noting the income, and then claiming the expenses you incur (interest, management fees etc) to prove you have no tax liability.

Secondly Halifax didn't offer you a consent to let because you've told them you will be away for three years which makes consent to let invalid (as I've said before Halifax CTL mortgages are for periods of less than three years)

Thirdly - how will you be paying the shortfall between the mortgage and rent? If it's from a UK bank account you will also have to pay tax on the interest on the balance.

Finally - does the country you are emigrating to have a tax agreement with the UK? The reason I ask is that by retaining property and accounts in the UK you can be seen to have retained residence. I would go and pay someone with some good understanding of the tax regimes in the UK and your country to give you advice on how to structure your affairs. Getting this wrong can be catastrophic, for instance if you were going to N.America and don;t declare your UK property to them at landing if you later sell it they tax you on the whole proceeds not just the profit. Similar pitfalls exist in other countries, please, please, please spend a few pounds now to save a major disaster later.