UK Property - ROI resident -tax ?

[Seamuslad]

Hello experts.

I jointly own a house in England with my partner and we have both recently moved to the Republic of Ireland. The house is valued at approximately 210k and there is no mortgage on the house. We were going to sell it, but are now thinking of renting it out. Where do we stand on the issue of tax ?

Slan Leat
Seamus

[mart]

Hi Sea,

I'm not an expert but as you don't have a reply yet I thought I would let you know of an excellent book i am currently reading which would answer your question. It is called 'How to avoid propery tax' by Carl Bayley. I recommend you buy it- for 25 quid it could save you a lot of £s in tax. At least you would be making an informed decision.

Good luck.

[Tax Accountant]

Hello experts.

I jointly own a house in England with my partner and we have both recently moved to the Republic of Ireland. The house is valued at approximately 210k and there is no mortgage on the house. We were going to sell it, but are now thinking of renting it out. Where do we stand on the issue of tax ?

Slan Leat
Seamus

You would be liable to pay tax on your rental profits.

The letting agents are obliged to with-hold basic rate tax from the rents collected but you could apply to the tax office to receive rent without any deduction. You would need to agree to submit tax returns to the tax office every year and to pay the right amount of tax.

In calculating the tax, you and your partner may be able to claim the standard UK personal allowance.

Ramnik

[johnj]

It is generaly the case that non residents do not qualify for UK personal allowances. There are exceptions however for Commonwealth citizens and citizens of the Republic of Ireland.
See Income and Corporation Tax Act 1988 s 278, Finance Act 1988 s 31 and other references.
If the property were to be sold to an entity (owned by you) that had to borrow to buy it then interest relief may be available to reduce the UK taxable rent and the interest payable, perhaps to yourselves, could be enjoyed free of UK tax.

[Tax Accountant]

It is generaly the case that non residents do not qualify for UK personal allowances. There are exceptions however for Commonwealth citizens and citizens of the Republic of Ireland.
See Income and Corporation Tax Act 1988 s 278, Finance Act 1988 s 31 and other references.
If the property were to be sold to an entity (owned by you) that had to borrow to buy it then interest relief may be available to reduce the UK taxable rent and the interest payable, perhaps to yourselves, could be enjoyed free of UK tax.

If you sell a property to an entity (a limited company), you will be deemed to have made a chargeable disposal as if you are selling it to a third party. This may give rise to a CGT liability.

There may also be restrictions on interest paid tax-free by the company to non-residents.

The company in the UK would need to account for tax on rents, the company would need to be set up and operated etc. You would need to weigh up the pros and cons of the action of transferring a property to a company.

Ramnik