Sale agreed on Irish ppr - purchase small flat in UK

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Mothergoose

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Is it worth buying a small flat in UK?My PPR has hone sale agreed. I'm working in UK since quite recently. Age 58. Going to start reducing my hours in work, initially to 28 hrs. I won't be coming back to work in Ireland before I retire. I don't work in frontline healtcare anymore, but it is in healthcare and I would never return to Irish healthcare system - it is a lot better in the UK despite what the media portrays.

I hope by next year to reduce my hours from full time to 21 hrs. Paying rent in UK is a barrier to reducing hours to 21 hrs per week. I have a holiday home in Galway that I intend to retire to when I reach pension age and which will effectively be the family PPR going forward.I would like to buy 2 bed flat in Wirral, Liverpool. Lots of access to jobs in my field in that area and possibility of working in Leeds two to three days per week if work in Liverpool or Manchester dried up. 2 bed flat in Wirral is 190 stg (Greasby). Hoping to put rest of money from sale in High yield account - haven't looked into this yet though.

My question is, is it a bad financial investment to buy an apartment to do for 9 yeas up to pension age? If I die before pension age, the flat will be left to my children. They will have assets here and from UK in my estate - what complications does this create?

Just as a bit of background - I lived in UK for 7 years 1995 to 2002. Sp know it well and always regretted returning to Ireland. I have also bought back all of the UK State pension that I wad entitled to.
 
Mothergoose said:
My question is, is it a bad financial investment to buy an apartment to do for 9 yeas up to pension age?
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In Ireland, the answer would be no. Rents are so high that buying a house or an apartment even for a relatively short period of time makes sense.
The transaction costs in terms of legal fees and stamp duty are low.

But these factors may not apply in the Wirral.

But by owning your own home, the benefit is tax-free.

In other words, if you invest the £190k in the stockmarket, you will pay tax on any income or capital gains. But you will get no deduction for rent (check if this is correct in the UK.). Whereas if you buy an apartment the rent saved and any capital gain is tax-free.
 
Thanks, Brendan, that makes sense. A two bedroom apartment in the Wirral would rent for about 900stg per month - not crazy prices like here. House prices are supposed to be falling in the UK, but I don't see that and the few apartments I was interested in recently, went for slightly over the asking price in rhe Wirral.
 
Just a follow on question about buying in the UK - I won't be paying CGT if I sell the property in 9 years time, but inheritance tax relief is a lot less here - 325k if passing on to children, or can be up to 500k if passing on to spouse/children and it is a primary residence, but it won't be their residence.. This is lower than the 335k per child here in Ireland and 40% after that. Apparently UK inheritance tax applied to assets in UK and Ireland, if a person dies within the last three years of living in the UK. I'm not planning to die, but life can change in a moment. I'm wondering if the issue with inheritance tax should put me off buying in the UK - on the other hand - I cannot imagine living in rented accommodation for the next 9 years while I live in the UK. I'm thinking now that rather than buy a flat, I should purchase a house in the UK to the value of 325k stg to get the maximum out of CAT allowance in UK - is this correct thinking or not? 325k Stg would still only buy an average semi on the Wirral, UK.
 
I think you should do whats the best thing for your life in the forseeable future and not let the "inheritanace tax" tail wag the dog.
 
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