[renew]

I got a job in december last year and put the house on the market. Its all gone a bit **** with buyers dropping out and playing about. 2 agents own adverts in paper, own website and google adwords. There is nothing more that we can do short of virtually giving the house away. So rather than lose the job we are thinking about renting out our UK house. It is far from perfect solution as this will leave little in the way of savings.
So those of you that have been there before what are the hoops and loops I have to jump through. How does the tax work - will I end up with a capitals gains tax when we eventually sell?) How does the 4 year overseas tax exemption in NZ come into play?

Stress stress stress.

cheers

Ian

[Joolzr]

Hi Ian

Sorry to hear about you stress. But renting at the moment may be a good move as the property market where we are is very flat/falling.

We're renting our place out- or trying as we've just had our tenants fall through. We used an agent and that turned out to be a good move as the had taken a holding deposit as we had taken the propoerty off the market for two weeks. So we have £300 to cover the lost rent and hopefully can find someone else in 2 weeks.... (My current major stress)

In Cambridge, full management rates vary between 8 and 11%, but many places can be upto 15%. They take this then add VAT. Be prepared to bargain on this. We also have to pay £35 for the tenant deposit scheme which holds the deposit safely for the tenant. Our agent wants a £200 float for repairs. But other that that he makes no charges to us. He charges £70 to the tenant to check references. Ours does detail;ed reference checks and it is worth asking about this as some just check if the tenant is a bankrupt. Some agents can charge 2-300 £ which I think is a lot. Often they charge an inventory fee to one or the other party. I'm going to do ours myself as I want to be clear on the state of everything and dont want to pay £100.

Regarding tax, you need to fill out a form which allows the agent to pay the rent on to you without deducting tax. Then you have a number of things you can count as expenses:

The interest portion of your mortgage, insurance premiums, agents fees, 10% of rent for wear and tear- it's worth doing a internet searcha s these are uts the ones I can remember. So you take the income from the rent and subtract all of these things. The left over portion is subject to tax.

This is how I understand things and I'm a bit of a beginner at all of this. Don't know how folk make money at it though as we wil barely cover costs.

Good luck


Julie

[mgbridges]

We rented our flat out back in 1999 - 2001 and it worked out that we were taxed on the 'profit'. i.e. Gross Income from flat (i.e. how much the tenants paid each month) MINUS agent fees, repairs & maintenance costs, ground rent etc.

We had a number of costly repairs (e.g. shower broke down and leaked) so we ended up making very little money at all therefore hardly paid any tax.

Have a look here: http://www.hmrc.gov.uk/cnr/nr_landlords.htm

Can't answer the question regards then selling whilst you are overseas as we returned to the UK and moved back in.

HTH
Anneliese

[Moorf]

No capital gains tax will be levied as it will remain your principal U.K. residence. You may, however, be liable for Overseas Landlord Tax on any profits made - check with your rental agent which, as a previous landlady for 10+yrs, I highly recommended employing.

[Drover Jess]

As a uk resident now living in a tied house (hubby's job) our 'let' house has a 3 year waiver on CGT as it was our family home, starting from the date (and the value at that date, not the purchase price) when we moved out..
so the 'gain' only comes in anytime after 3 yrs, if the markets increase, which they may not... most of the 'gain' of our house was when we lived in it..

we will investigate if there is any waiver on account of the aspect that he has to live on the job.. but have no need to do that now.

not sure if going to NZ changes this 3 yr ruling, but others may know.. and 3 yrs is maybe all you need to know if NZ is right for you...

[Caroline and Dave]

For those of you not sure re letting in the UK I would thoroughly reccomend joining the Landlords association. For a single year it costs GBP 88 approx and less for longer. it is well worth it for the advice and help you get and discounts on things like Landlord's insurance. We have been with them for years now and still use their services.There are many good but also some not so good letting agents and it is a good thing to check out what they are telling you via the Landlord's association.Once you have paid your subscription there is no extra charge for advice no matter how many times you contact them, even from abroad and they even rung us back in New Zealand once.

http://www.landlords.org.uk/index.htm


Dave and Caroline