Paying off mortgage.

peter_the_piper

DD bought her house about 7 years ago. For the last 5 years she has worked abroad and expects to do so for a few more years. She is building up a good deal in her savings and expects to have sufficient funds to pay off her mortgage before she returns to UK.
1) Is it better to completely pay it off and just keep the rent she gets.
2) Overpay her mortgage
or 3) Continue as now but get the best savings rate she can or buy shares.



She currently does not pay tax in UK but also has not paid NI.for 5 years. Personally I think she should top up her NI and start up a private pension using the overpay from her rental fees.
Any advice?

AdrianC

What mortgage rate is she paying, compared to the net interest she's getting on her investments?
What's her attitude to keeping her money in her local currency compared to sterling?


Whether she thinks her long-term future is in the UK, and a state pension is worth paying the NI for is another question entirely, but she's a fool if she's not building private pension provision up.

sal_III

Where does she work? Pretty sure NI like pension contributions in other EU countries count towards state pension entitlement in the UK (Brexit curve ball might change that). It's likely we have similar arrangements with other countries, so might be worth checking out.

peter_the_piper

Kazakhstan.
I don't think she pays any tax or ni equivalent, that's why I'm putting out feelers.
I'll check out the mortgage rate but not sure if it would help to know at the moment as she is about to renegotiate a new deal.

shinytop

You'd be better posting this in the Savings and Investments forum as this isn't really a house buying/renting question. This sort of thing is duscussed a lot there.

moneyistooshorttomention

To me - it would be obvious. Pay off the mortgage as soon as humanly possible.

At least that way there is no risk of her coming back to Britain/deciding to get a job here/not being able to get a job here for a while and then the DWP decides to start telling her to "use your savings to live on" and there they are = gone (apart from £6,000 they graciously allow you to keep..).

I've always taken what chances I could to repay chunks of mortgage asap when I got chunks of money (ie over and above basic salary). I managed to get shot of my 25 year mortgage in 13 years - by using those "chunks" of extra income.

It gives a lot of peace of mind knowing the house is safe and the government can't dip into those savings (ie because they were safely spent whilst knowing I safely had a job).

AdrianC

peter_the_piper wrote: »

Kazakhstan.

Is she employed locally, or is she employed in another country and posted there?

Marvel1

peter_the_piper wrote: »

Kazakhstan.
I don't think she pays any tax or ni equivalent, that's why I'm putting out feelers.

Am I jumping ahead and getting confused:

Tax on your UK income if you live abroad
https://www.gov.uk/tax-uk-income-live-abroad/rent

G_M

Marvel1 wrote: »

Am I jumping ahead and getting confused:

Tax on your UK income if you live abroad
https://www.gov.uk/tax-uk-income-live-abroad/rent

Yes, hopefully she is paying tax in the UK on her rental income.
Or at least declaring it if no tax is due (eg allowable expenses = income).

Do her tenants pay her directly?Or pay you? Or pay a UK based letting agent? If they pay rent direct to her, then hopefully she, and they, understand the HMRC rules involved......
See : HMRC (Non Resident [= overseas] Landlord Scheme)


And of course the tenants have an address for her in England/Wales for serving notices....?
Landlord and Tenant Act 1987 S48

I agree your query is really a savings /investment one, not property, but as you've posted here on a property forum you've opened a potential can of worms!

peter_the_piper

AdrianC wrote: »

Is she employed locally, or is she employed in another country and posted there?

The international school she works for is UK based but the Kazak school hires and fires themselves.

peter_the_piper

G_M wrote: »

Yes, hopefully she is paying tax in the UK on her rental income.
Or at least declaring it if no tax is due (eg allowable expenses = income).

Do her tenants pay her directly?Or pay you? Or pay a UK based letting agent? If they pay rent direct to her, then hopefully she, and they, understand the HMRC rules involved......
See : HMRC (Non Resident [= overseas] Landlord Scheme)


And of course the tenants have an address for her in England/Wales for serving notices....?
Landlord and Tenant Act 1987 S48

I agree your query is really a savings /investment one, not property, but as you've posted here on a property forum you've opened a potential can of worms!

She has a letter from HMRC, after a phone conversation where she declared she was renting it out but they said neither that or her income is uk taxable.
I am the address all correspondence from the tenant comes to and I deal with any problems.
I'll repost this on the other forum as advised.