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Doubt it. Even if it was possible you would have to pay stamp duty as an investor on the new property and would then be liable for income tax on the rental income. Either it would be very complicated and possibly not worth it or simply not allowed either under standard Revenue rules or anti-avoidance rules. You need professional advice.We have just sold our property putting us in a position to now purchase a brand new house ideally in the area that we are renting approx 850K. We do not want to rent out this house to anyone else.
Q Is it legal to employ a rental agency to set up a new tenancy agreement that allows us to rent the new house back to ourselves for the following 24 months (62K). In other words can we be landlord and tenant?
That would seem to be the best course of action. You benefit in every respect.
Inflation is about 5% at the moment. Other than some regular saver rates of 7-8% most lump sum rates are in or around 5% gross or 4% net of DIRT. Your money could well be losing value in this case.Ok many thanks, having slept on this maybe would be better to get a higher rate of interest return by smacking the proceeds from the house sale 600K + in a hight interest account?
please explain why no
You cannot take a lease from yourself its just a principle of law.
You could do something like form a company to buy the property and lease the property from the company but this has so many different tax consequences that might not be worth the hassle.
Possibly not. However I don't really understand you.Or am I talking rubbish?
You cannot take a lease from yourself its just a principle of law.
You could do something like form a company to buy the property and lease the property from the company but this has so many different tax consequences that might not be worth the hassle.
He's correct on the not granting a lease to yourself. It's a nonsense in law, in the same way as you can't transfer property to yourself, and can't enter a contract with yourself. No interest in the property is actually passing, so any deeds/documents are meaningless.
It could be done through a trust where you pass the legal title to someone else (but retain the beneficial interest), and you take a lease from that legal owner, or else form a company as dazza said.
Edit: Or your partner cold own it and you take the lease.
We get a rental allowance of £3K per month from our employers as part of a temporary relocation agreement due to last 3 years and have just signed up for a 12 month tenancy agreements with an agent (31K per year) so we have now tied up twelve months allowance.
We have just sold our property putting us in a position to now purchase a brand new house ideally in the area that we are renting approx 850K. We do not want to rent out this house to anyone else.
Q Is it legal to employ a rental agency to set up a new tenancy agreement that allows us to rent the new house back to ourselves for the following 24 months (62K). In other words can we be landlord and tenant?
As I understand it, inflation rates ex-mortgage costs are about 3.8%Inflation is about 5% at the moment. Other than some regular saver rates of 7-8% most lump sum rates are in or around 5% gross or 4% net of DIRT. Your money could well be losing value in this case.
I would think there would be BIK either way.Presumably there will be BIK issues in this case - or maybe regardless?
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