moving abroad, want to keep house and let out

[gabi]

hi, we're moving to the UK and would like to keep the house and let it out.
We're on an owner occupier repayment mortgage and claiming TRS. have about 250k left on the mortgage, estimated rental income exclusive of cost is 18.5k a year.

i understand the house is going to switch to an investment property once we move. can i really claim mortgage interest relief and letting expenses against rental income? if so does it make sense to have a bigger mortgage (as interest on 250k is only about 12k a year)/bigger interest to offset the tax?

Also since i'm going to be resident abroad and the rental income will be my only source of income in Ireland. Am i still entitled to the personal income tax exemption limit of [FONT=&quot]10,420 for a married person? if that's the case then there's no point having a bigger mortgage to offset the tax.

do i need to notify the lender and insurance company?

many thanks for any comment


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[ClubMan]

can i really claim mortgage interest relief

Not owner occupier mortgage interest tax relief ("TRS") obviously but as long as you are subject to Irish income tax then you can offset mortgage interest against rental income.

if so does it make sense to have a bigger mortgage (as interest on 250k is only about 12k a year)/bigger interest to offset the tax?

You can only offset the interest on the mortgage as it stands right now or when it ceases to be your PPR. You cannot top-up and use the money for purposes other than purchasing or renovating a rental property and then set the interest on the additional amount against rental income.

Also since i'm going to be resident abroad and the rental income will be my only source of income in Ireland. Am i still entitled to the personal income tax exemption limit of [FONT=&quot]10,420 for a married person? if that's the case then there's no point having a bigger mortgage to offset the tax.

Will you eventually cease to be tax resident in Ireland and then become subject to taxes in the UK?

do i need to notify the lender and insurance company?

Yes.

Note that you also need to have the tenant or agent deduct a certain amount of tax from rent paid at source. This stuff is all covered in the Property Investment FAQ and related links/resources.
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[lightup]

I would definitely get some professional advice on this situation.

When you become UK resident you may be laible to UK income tax on the rent but you will also still be liable to Irish income tax as the income is derived from land in the state. There are double taxation agreements which covers this situation but you would need a professional to make sure you are applying these correctly.

Also, it may be an idea to appoint a letting agent in Ireland to collect your rent. If not, the people renting your home would be required to withold part of the rent and pay it over to Revenue as you would be a non resident landlord.