Questions regarding renting out property and moving to UK

M

moondance

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Basically considering a move which will entail:

- will have apartment (as owner occupier) for just over 2 years when I rent it out and move to UK
- mortgage will be interest only and rental income will be less than mortgage payments (so interest only payment will be approx 450pm and rental income will be 400pm)
- moving to UK where I will be working part time and looking after a relation most of the time (so free lodgings, will get part time / weekend job to cover food, bills, etc; savings will cover extra bit of mortgage payment after rental income)
- move would be 1 year minimum and 2 years maximum

What would do I need to do? I would want to have everything done right with regard to taxes, etc. So would rental income be declared as earnings in UK or would everything be separate to each country?

Thanks in advance! :)
 
Could be costly - if you didn't pay stamp duty on the purchase you are not living there long enough to qualify for the waiver so basically you would have to pay the stamp duty that would have been due if you had bought the apartment as anything other than your PPR (primary private residence).

Renting as an overseas landlord means your tenant would be legally bound to withhold 20% of the rent to forward to revenue for your tax liabilities, so you're down another €80 a month. Can you afford to pay €130 a month for an apartment you don't live in?

Then add in PRTB registration, the chances that you won't have tenants for all the time you're away (breaks between tenants etc), repair/replacement costs, upkeep, management fees.....

Starting to look like an expensive move?
 
I thought the clawback period was 2 years for stamp duty? OP will have occupied for 2 years so there won't be a clawback?

Would be a good idea to appoint an agent here in Ireland for the rent payments. Would save the tenant having to go through all the 20% withholding and reclaim by you from Revenue, never mind the risk that th tenant won't bother handing over to Revenue and you could be left out of pocket.

As shesells said you need to consider all the additional costs involved. PRTB registration is very important. Unless so registered you are not entitled to an interest deduction against the rent for tax.

What would happen if something goes wrong? Have you someone that can call round if there is a problem and also be willing to sort it out for you?

You would be required to submit an income tax return to Revenue so this could be an extra cost if you get an accountant to do it, although you could probably do is yourself.

You also need to consider whether your UK income could be liable to Irish tax - unlikely but needs to be considered (should be ok as long as it is employment income).
 
Appoint an agent to act on your behalf with Revenue, otherwise tenants have to withhold standard rate tax on rent.

Register with PRTB - otherwise no relief for interest paid against rental income.

For 2009 onwards, only 75% relief for mortgage interest allowed against rental income.

You will have to prepare rental accounts and Irish tax return each year.

If you remit your income to the UK you will be liable to UK tax on your rental income, but will receive a credit for any Irish tax paid
 
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