Expat....expat mortgage from jersey....tax

de1amo

İ am exploring the possibility of taking a BTL mortgage with a Jersey/guernsey based bank and wonder about the tax situation ...are they classed as uk connected and the interest be tax deductable on rental income for a uk home..Skipton İntl is the bank subsiduary.....they wont advise on tax issues!

ACG

You need a tax advisor.

My understanding is that you pay tax baxed on your circumstances, not the lenders.

happylucky

Yes it's fully tax deductible. I assume your mortgage is GBP.

You will also be responsible for submitting tax returns in your country of residence (I am assuming you are not UK based!) according to their deduction and any other rules if they tax based on global income or asset hold go (then claiming back any UK tax paid under any dual tax treaty arrangement if applicable).

What was the Skipton process like, if you don't mi d me asking? It looks like an interesting product.

ACG

happylucky wrote: »

Yes it's fully tax deductible. I assume your mortgage is GBP.

You will also be responsible for submitting tax returns in your country of residence (I am assuming you are not UK based!) according to their deduction and any other rules if they tax based on global income or asset hold go (then claiming back any UK tax paid under any dual tax treaty arrangement if applicable).

What was the Skipton process like, if you don't mi d me asking? It looks like an interesting product.

If UK based, the tax stance is changing over the next year or 2. I have assumed that is why the OP is looking at offshore banks/lenders?

happylucky

Just read your op again.

You refer to UK "home", but I'd understood the Skipton product was very specifically an investment only product to be used with no future "home" intention.

I would be very careful about making sure you are OK with all the t & cs if you're intending to use it as a home (unless you are OK to clear the balance with cash before moving in). Expat (and recent repat) mortgages are pretty thin on the ground so you'd not want to risk getting kicked off this one without being confident you could move to a suitable replacement

happylucky

ACG wrote: »

If UK based, the tax stance is changing over the next year or 2. I have assumed that is why the OP is looking at offshore banks/lenders?

I meant fully tax deductible within the rules of UK tax law......thank you for correcting my grossly misleading post, you are totally correct., of course!

OP s tax obligations to country of residence (if any) will be dictated by that country's rules on deductions, tax year etc, which may (probably) be different

The debt source for both countries is not relevant to my knowledge, the defining indicators will be 1) asset location 2) country or countries of residency with status raising taxation liability, and possibly 3) remittance status of income, depending on country of residences local law.

Depending on exact countries involved. It can be flipping complicated. I've had to submit 3 tax returns in 3 different countries with 3 different tax years and 3 different sets of deductible before....just for 1 UK property. Nightmare.

ACG

It sounds like you know far more than I do and have the practical experience with it. I had to know a few basics for my exams but to be honest, if this ever cropped up with a client I would just tell them get tax advice.

It is a commercial investment, invest in the proper advice to go with it so you can sleep at night knowing HMRC are not going to be sending you fines in years to come.

de1amo

As i understand with my rudimentary grasp of uk tax ...as it stands i will pay no tax on my pension at source in the uk but be liable for tax on the property that is obviously rooted to the spot in the uk?...the mortgage in question is Guernsey based but taken in pounds...it sounds ideal for my needs and i am surprised it isnt a widely offered product!....so as i understand from the answers i can get tax concessions as the rent is paid in the HMRC realm but this may change!?