Couple of questions regarding UK Property Investment

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lettermac

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I have read various threads at length on this website but have a few minor points of clarification.

Situation is this. Looking at buying an apartment in Glasgow for circa £150k. Financing the deposit from existing savings.

1. Should I look to get a mortgage in the UK or Ireland? What are the advantages/disadvantages?

2. Would I need to front 20% of the purchase price?

3. If I get a mortgage in Ireland, can I offset the mortgage interest against the my UK rental income for the purposes of my UK tax return?

4. Are allowable expenses pretty similar in the UK as Ireland.....i.e. even after my mortgage interest, can I deduct house insurance, management company subs, furniture etc etc?

5. CGT - As I am an Irish redident, I will only have an Irish CGT liability. My only tax liability in the UK will be against my rental income which in turn I can offset agaisnt my annual Irish tax return.

Many thanks,
 
lettermac said:
I have read various threads at length on this website but have a few minor points of clarification.

Situation is this. Looking at buying an apartment in Glasgow for circa £150k. Financing the deposit from existing savings.

1. Should I look to get a mortgage in the UK or Ireland? What are the advantages/disadvantages?

2. Would I need to front 20% of the purchase price?

3. If I get a mortgage in Ireland, can I offset the mortgage interest against the my UK rental income for the purposes of my UK tax return?

4. Are allowable expenses pretty similar in the UK as Ireland.....i.e. even after my mortgage interest, can I deduct house insurance, management company subs, furniture etc etc?

5. CGT - As I am an Irish redident, I will only have an Irish CGT liability. My only tax liability in the UK will be against my rental income which in turn I can offset agaisnt my annual Irish tax return.

Many thanks,
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1. We purchased in the UK and released equity on our Irish property rather than mortgage in the UK, because, at the time, the interest rates were much lower here.

2. We needed 20%.

3. Yes, we intend to, and our accountant has not said we cannot.

4. Yes we deduct interest, insurance, letting agent fee, and some major expenses incurred when there was a flooding problem.

5. This is where I get stuck, and I'd love a definitive answer myself. I have posted in this regard previously on AAM and seem to have been told that as an Irish resident I am not liable to CGT in the UK but am, of course, liable in Ireland, at 20%. That would be great. However, when I consult both the Irish Revenue guidelines and the Inland Revenue website I'm not so sure. Does anybody have a definite YES or NO on this please?
 
Andrewa said:
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5. This is where I get stuck, and I'd love a definitive answer myself. I have posted in this regard previously on AAM and seem to have been told that as an Irish resident I am not liable to CGT in the UK but am, of course, liable in Ireland, at 20%. That would be great. However, when I consult both the Irish Revenue guidelines and the Inland Revenue website I'm not so sure. Does anybody have a definite YES or NO on this please?
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Hi,

Im no tax expert but I think there is a legislation, so that any entity outside of the UK, but within the EU & holding property in the UK, will not be charged CGT in the UK, but will be charged the appropriate tax in their home juristiction.

I think this is why we see so many Irish funds investing in UK Commercial property, because they are not the subject of a double capital gains tax on disposal.

Hope I'm right ? :)

Cheers

G>
[broken link removed]
 
The definitive position is that non-residents (of the UK) are not liable to UK capital gains tax.
This differs from the Irish situation where anyone (regardless of residence) selling property situated in Ireland will is liable to CGT on any profit made.
 
San Martino said:
The definitive position is that non-residents (of the UK) are not liable to UK capital gains tax.
This differs from the Irish situation where anyone (regardless of residence) selling property situated in Ireland will is liable to CGT on any profit made.
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Would you quote the source of this information please? Do you have personal experience that this is the case (for example as a non-resident landlord of a property in the UK) or otherwise what is the "definitive" source? I suspect the comments in the above posts refer to tax on disposal of one's home, not an investment property!

Non-resident investors (i.e. someone living in Ireland, purchasing a property to let and for capital appreciation) is not only liable for UK tax on any increase in value between purchase and sale price but the tenant must deduct tax and submit to the Revenue unless you set up a formal arrangement in advance for paying tax.

The information you need is in IR150 Taxation of rents - a guide to property income and IR20 Residents and Non-Residents liability to tax in UK.
 
Marie,

I do have experience in this area, and have checked the position with my accountant.

Does the Inland Revenue guide IR150 not refer to rental income (and not gains)?. (Yes, tenants are supposed to deduct tax at the standard rate from rental income, but the Inland Revenue readily give approval for paying rent gross where a landlord completes a fairly straight forward form.)

Irish CGT will still be payable on the sale of UK property (assuming the seller is Irish resident)

Also, on reflection, my original answer may have been a bit simplistic - see the link below from the Inland Revenue website for further info on CGT for non-residents.


Cheers
 
Saint, OP - as the language in these government websites is so impenetrable it is important to check out your own individual tax liability with an independent financial advisor as well as writing or phoning Inland Revenue. For example there are some unique aspects of property law and organisation of the market in Scotland which need research if you plan to buy there, notwithstanding the fact England Scotland and Wales 'share' an IR site!
 
If I get a mortgage in Ireland, can I offset the mortgage interest against the my UK rental income for the purposes of my UK tax return?
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Yes, we intend to, and our accountant has not said we cannot.
Click to expand...

I'm not a tax expert but is this correct?
 
Thought it was Irish income can be offset against Irish interest on allowable loans & same for UK, not merged incomes / outgoings, but also not a tax expert ?

Anyone ?

Cheers

G>
[broken link removed]
 
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