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New Landlord with complex Mortgage query


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Hey, I own a flat in the UK but have decided to emigrate to Australia with my wife. We have decided to not sell it just incase we decide we don't like Australia and want to come home and are not stuck on the bottom rung of the property ladder (again!).

Luckily we had some friends who for various reasons cannot get a mortgage (who are both in good jobs and seem reliable) so we rented to them.

We have done everything legitimately, i.e. Gas inspection, Online Deposit Scheme etc, but we aren't sure

what to do with the mortgage.

Because we are going to be on the other side of the world we gave our friends a slightly discounted rent on the understanding that we cannot fix things straight away, it will take time.

If we tell our mortgage provider that we are letting our property they have said they will charge us another 1% on our payments which although won't cripple us will make it harder (especially when you take into account currency fluctuations!)

Does anybody have any advice on this?

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Just to expand on GPEL's comments, you will need to complete a form NRL1 which is available from HMRC's website. This should enable you to receive the rental income without tax deducted at source. If you do not complete this form then your agent (or tenants) will have to deduct tax at source on your gross rents.

Also have a look at form P85 (also on HMRC's website) which will need completing - this is not specifically to do with rent, but rather to do with the fact that you are leaving the UK



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You should inform the management company who hold the building insurance as it'll need to be changed to one that covers letting (if they'll allow it, should do), otherwise it'll be invalid.

Apart from all that, I thought you had to sell up completely and basically cut your rope with the UK in order to get Aussie citzenship, you've obviously made the big step, passed all the criteria, completed the massive amount of forms and waitied best part of 12 months for the nod no doubt. So sell up and be done with it, why would you come back and if you've the answer to that then why are you going!

When I was a kid I worked in Jersey for a year, coming back I had a telly that I just couldn't carry. A 'good friend' said they'd sell it and send the money, it's taken 20 years to sell it so far! The point is if it goes wrong here you are just too far away and are inviting a real load of trouble, at least put it with a reputable agency.

Just my thoughts.

Good luck with your venture.


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The trouble with Australia is that it's full of Australian's, with a culture & climate that isn't always to everyone's taste. Many do return after looking over the hill. Don't throw the baby out with the bath water. Keep your property, put it in trusted hands and leave the decision to sell for sometime in the future.

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Additionally, if the property is likely to cause a UK CGT issue on disposal then consider whether you should hold on to it for now. There are special rules that can exempt the sale of the property from UK CGT after so many years - providing you have stayed out /will be out of the UK for the prescribed period.

However I am not an Aussie tax specialist - so check the rules in Australia too as you will be resident there


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"The trouble with Australia is that it's full of Australian's".

Not strictly true, in Perth 33% are not australian born, I think that is mirrored throughout the country.

Regarding the "to sell or not to sell" dilema..... it is a very good question.

I, like you am moving to Australia in 3 months time. There are so many factors:

Are property prices really going to fall in the UK?

Is Australian property a safer bet as they seem to appear less affected by the credit crunch?

What is the exchange rate going to do?

An example:

UK House prices go down by 5% in 1 year

Australian house prices go up by 5% in 1 year.

The exchange rate goes from about 2.2 to the pound (which it seems to be teetering around at the mo) down to 2.

If this was the case, on a 300,000 house you would have lost 15K on the value of your property, the Australian property would cost another 15K, and assuming no mortgage you would have lost about 27K on the conversion to australian dollars. You would be a total of 57,000 pounds worse off.

So my advice is seek advice on all 3 of those variables and take that into your consideration as well as the risk you may not like it and have to come back.

By the way I am selling my home!

But I am keeping my 2 BTL's.

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