I searched the forum but am still not sure. Could some of the 'experts' on here give me advice/guidance please?
My Mother is moving back home to Ballina, Co Mayo in the next couple of years and I'm assisiting her with her future finances. Bullet points may be best way to explain;
She is currently living in England, where she owns a property (worth £110K) and has some £60K savings/share investments.
Currently has €110K in bank in Eire, plus €10K in shares.
Purchasing a property within next 2 months (€2.5K deposit been put down) for €163,500 (so with fees, etc it will be about €170K total costs).
She retires in UK from part-time employment within 2 years when she will sell-up and move back home.
She would like to rent out the Ballina property for 12 to 18 months until she returns home.
What are the best options with regards to the mortgage and tax.
What mortgage should she look for (repayment/interest only/other?)
She would be happy to pay off any outstanding mortgage when English property is sold, just prior to moving back
Any advice would be gratefully appreciated as I am in the UK and getting advice on such matters from abroad is very hard.
Firstly fair play to her - i have a few relatives over and although they have houses here too they just can't make the break for one reason or another.
Secondly overall her finances are in wonderful shape considering the exchange rate.
I cannot give advice really being new to the market myself but i think it is pertainent to ask if she is thinking of continuing to work in ireland when she moves back? And if her UK pension contributions are up to date (in order to understand her cash flow situation fully).
Paul - as far as I know (I'm currently researching these issues for myself as I am in a similar position to your mother) when she sells the UK property she can choose whether to pay capital gains tax due on the increase in value in whichever state charges the lower rate.
As she already owns a property she does not qualify for first-time buyer status (i.e. it will be an investment property, even though she plans to subsequently live in the house as her principal private residence) and there will be stamp duty liable in RoI at time of purchase depending on the square area of the house and the purchase price.
The conditions for renting out the property in the interim 18 months are that she appoint an agent in Ireland who will manage the rent and arrange for the proportion due in tax to be deducted and paid. She is also required to register as a landlord. She may find this site http://www.revenue.ie/ helpful.
Her pension will be forwarded to her in full to the address she gives on retirement. I noticed in yesterdays Irish Times a statement that individuals receiving pension "may earn an additional Euro 7.5 per week without incurring tax" but suspect it was intended to read Euro75 p.w. Perhaps someone else can clear that up?
