Should I sell? Rent 30% below market. 50k cap gains

N

nbc

Registered User
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Hi
I have a property let to a nice couple. They are there 7 years.
Rent is 1350
Market 2000-2200
Mortgage free
Bought 120k 1998
Current value 300k
Rents may fall due to covid but I’m looking at poorer than normal rental return over next few years
I live in UK. I’m self employed- income 100k. I have some other properties and overall my loan to value is 40% on these.
I don’t have a pension.
I could sell this property and pay prob 50k plus cap gains . I could put most of the money into my pension and get a 40% bonus effectively.
Any thoughts gratefully received
NBC
 
nbc said:
Hi
I have a property let to a nice couple. They are there 7 years.
Rent is 1350
Market 2000-2200
Mortgage free
Bought 120k 1998
Current value 300k
Rents may fall due to covid but I’m looking at poorer than normal rental return over next few years
I live in UK. I’m self employed- income 100k. I have some other properties and overall my loan to value is 40% on these.
I don’t have a pension.
I could sell this property and pay prob 50k plus cap gains . I could put most of the money into my pension and get a 40% bonus effectively.
Any thoughts gratefully received
NBC
Click to expand...
I'm not an expert on this (far from it) but I think, under UK law, you might be able to transfer it to your pension fund in a tax efficient manner. Might be worth looking into.
 
nbc said:
I could put most of the money into my pension and get a 40% bonus effectively.
Click to expand...

This is the bit which I think is wrong.

You get tax relief on the way in which I assume is the 40% bonus you are referring to.

But when you take it out as pension, you will pay tax on it. Or is the UK system different?

What age are you?
Do you plan to remain in the UK until retirement?

If you plan to return to Ireland what happens your pension fund in the UK?

Will the rules be the same in x years time when you retire?

1) It's very complicated as of now
2) It further complicated by the fact that the rules might be very different when you retire

For example, if you have a £200k pension fund in the UK when you are 65 and you live in Ireland, what happens now?

Brendan

What rules will apply when you actually retire?
 
What is the CGT position?

You pay Irish CGT on Irish property and then get credit for it against your UK liability? As the Irish CGT rates are much higher than the UK, you won't have a UK CGT liability?

You need combined pension, investment and expat tax advice.

Brendan
 
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