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Okay, here's one for all you experts out there - I would welcome any advice.

I am being seconded overseas for a year. My wife and I own a house worth £400-500k with a mortgage of under £150k on it. Its in the london commuter belt, and is a family home.

So - do I rent the house out for a year and try to get executive tenants (I'm told the income for this area for 'normal' tenants would be around 1500/month?) What are the income tax implications? What are the implications for CGT?

Any comments gratefully received.


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If you want to keep the property I'd certaintly think about letting, it's not as scary as you might think!

I don't operate in London so I can't comment on the likely rental value, however if you could get £1500 per month and your mortgage is only £150k I guess you stand to make a healthy profit :D

Just a few pointers though...

If you're renting, you need to tell your mortgage company and they will probably charge you more! :D

You need to get a gas certificate valid for a year covering the gas appliances (if you have any)

I _believe_ you will be exempt from CGT if the property has been your primary residence AND you sell within 3 years of moving out (check this with an accountant or solicitor - I'm neither!) So if you are renting for only a year it won't affect you.

Any rental income is subject to tax, however there are lots of "tax deductable" things which help, get a good accountant to advise you :D

Hope these pointers help! Let me know if you have any specific questions.


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  • 2 weeks later...

the profit from the let would be nice...

but also have a look at how much you actualy NEED to let the property out at...

if you can arrange to get a fantastic tenant at a reduced rent that understands that you are comign back, might be better than looking to maxamise the income and get someone that has money to burn and might not take as good a care of the property.

making sure that you home is kept safe and resepeted as a home > profit

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Hi 2b

Income Tax - you will each need to prepare an income tax return for each tax year that the rental spans. You will pay tax on your profits - ie. income less expenses (mortgage interest is the main one, but also, if you are renting, weat and tear allowance)

CGT - you can leave the property for any reason for up to 3 years and providing you return to the property, the period will remain PPR exempt. There is also an exemption when you move for employment, either will get you the exemption you require

Incidentally, I do not know your circumstances, but if you need to extract cash for your move abroad - consider increasing your mortgage - you can claim interest for a value up to the value of the property at first let - therefore, if your house is worth £400k, and you have loans etc of say £50k, cash needed of say £100k, consider topping up your mortgage up to the full £400k - this obviously assumes you havent previously let the property out. I would point out that I am looking at this from a pure tax perspective - obviously you would need to weigh up interest rates, commitments, etc etc

Hope this helps


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