Being sent abroad - sell or let?

KonaSatori

Hi,

First post so apologies if I've not followed all the rules. I'm being sent abroad with work for 3 to 5 years. All housing etc is paid for while I'm out there but I'm not sure what to do with our house.

It's a 3 bed semi in the south east and easily commutable to London. We bought it on the Homebuy direct scheme with a 25% equity loan 6 years ago. We bought it for 240k and the identical house next door has sold for 330k in the last couple of months. We have a repayment mortgage at the moment.

We would probably be looking to move house when we come back to the UK but can't decide to sell or try and re-mortgage to buy out the equity loan and then rent the house out. We'd like to save as much as possible whilst we are abroad, but earning a profit out of renting isn't essential. My wife will have the full tax allowance and I'll be a higher rate tax payer in the UK even whilst abroad.

Any advice gratefully received.

dragonsoup

I'd let it. I wouldn't even think about selling it for one moment.

Pixie5740

Does the Homebuy direct scheme allow you to let the property?

Fish&Chips

We went on an expat posting, supposedly for 12-18 months and let out our house in Essex. We left the UK in January 1995.....and despite four international relocations we still haven't gone 'home' to the UK!

Our current tenants have been in our house for about 14 years now, and the mortgage is fully paid off. We are not sure when we are returning to England - it may even be this Summer - but we will live in our house in Essex (commuter village near the M25/M11) for a while so we won't have to pay capital gains tax when we decide to sell it.

Pixie5740

Fish&Chips wrote: »

We went on an expat posting, supposedly for 12-18 months and let out our house in Essex. We left the UK in January 1995.....and despite four international relocations we still haven't gone 'home' to the UK!

Our current tenants have been in our house for about 14 years now, and the mortgage is fully paid off. We are not sure when we are returning to England - it may even be this Summer - but we will live in our house in Essex (commuter village near the M25/M11) for a while so we won't have to pay capital gains tax when we decide to sell it.

You might still have to pay CGT. Moving into the property doesn't make it exempt from CGT, if it did then all landlords would do it.

KonaSatori

Homebuy direct might let us rent it but it's not easy to get a certain answer out of them. If we let it we may have to up the mortgage by £60k

lush_walrus

Definately keep it, otherwise there is a risk you will be out priced when you return. Get a good letting agent to manage the property so that you do not have the worry. Or if you have family close by if they are happy to take the role of managing could be an option. But if you are abroad the last thing you would want is calls about a leaking tap.

getmore4less

For 3-5 too long to be out of the market.

What's the rent likely to be.

If you are expensed abroad you should have plenty of free cash flow to attack any debt/save.

If going somewhere nice you may use more cash exploring the region.
Our relative in HK is always flying off around Asia.

specialboy

Fish&Chips wrote: »

We went on an expat posting, supposedly for 12-18 months and let out our house in Essex. We left the UK in January 1995.....and despite four international relocations we still haven't gone 'home' to the UK!

Our current tenants have been in our house for about 14 years now, and the mortgage is fully paid off. We are not sure when we are returning to England - it may even be this Summer - but we will live in our house in Essex (commuter village near the M25/M11) for a while so we won't have to pay capital gains tax when we decide to sell it.

Have you informed your tenants of 14yrs that they may be moving this summer?

booksurr

if you let it (which I think is a good idea in your case because of length away) then you will be landlords. That may sound a truism but many people do not see past the money side of being a LL, read GM's posts so you appreciate what that involves: https://forums.moneysavingexpert.com/discussion/5180214

pay particular attention to selecting an agent or make sure a relative realises what they are required to do when a tenant calls at 2am in the morning for a dripping tap or because they have locked themselves out

For tax purposes you are classed as "non resident" therefore:

1. must provide a contact address within the UK at which you can be reached by the tenant. This could be a letting agent or a relative. Failure to do so means the tenant does not have to pay any rent!

2. must operate the Non Resident LL tax scheme for income tax purposes and given the property remain joint owned the rental profit must be split between both of you so both need to register and each do annual tax returns
detailed guide: http://www.hmrc.gov.uk/manuals/pimmanual/pim4800.htm
dumbed down guide: https://www.gov.uk/tax-uk-income-live-abroad/rent

3. as the move is a requirement of your job, and the cost of living abroad is covered by your employer ("work related accommodation"), you will retain your Private Residence Relief from Capital Gains Tax meaning any further increase in property value will be CGT free.
https://www.gov.uk/government/publications/private-residence-relief-hs283-self-assessment-helpsheet

KonaSatori

Thanks very much. Really helpful.