To Rent or Sell
Oct 12th 2017, 7:42 am
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Joined: Apr 2017
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To Rent or Sell
So now my CR-1 is approved, we need to get all the wheels in motion.
I am guessing we might need to talk to a tax advisor, but hoping people can give a high level insight.
My wife and myself bought our property in the UK this time last year, so exchange rate was close to 1.20-1 so selling now we would have an exchange rate loss.
Property was bought for £485k and now might sell for £505k (mainly due to money we have put into the property). We would also incure a £6k penalty for settling early.
In total we should be left with $130k to tx over if we sold. I know i wont owe HMRC a penny, but by the time completion happened we will probably be in the US, so concerned about money we would owe the IRS?
Our other option is to rent. if we keep for another year we will of paid another big chunk off the mortgage and not have an early settlement penalty . So in theory if we sold in a year the equity would increase nicely to lets say $160k. I dont see exchange going below 1.2-1 so again we might still have an exchange loss.
BUT - if we rent our rental income will be around £18k, but mortgage payments £24k. I dont understand the tax implication here in the UK and US.
My wife also own a small condo in the US already where essentially rental income = mortgage payement. Wil we owe tax to someone ?
We will certainly want to sell one property and buy in the US in around a year. Wife still has a good credit rating so hopefully we would get a good rate.
Any insight really appreciated.
I am guessing we might need to talk to a tax advisor, but hoping people can give a high level insight.
My wife and myself bought our property in the UK this time last year, so exchange rate was close to 1.20-1 so selling now we would have an exchange rate loss.
Property was bought for £485k and now might sell for £505k (mainly due to money we have put into the property). We would also incure a £6k penalty for settling early.
In total we should be left with $130k to tx over if we sold. I know i wont owe HMRC a penny, but by the time completion happened we will probably be in the US, so concerned about money we would owe the IRS?
Our other option is to rent. if we keep for another year we will of paid another big chunk off the mortgage and not have an early settlement penalty . So in theory if we sold in a year the equity would increase nicely to lets say $160k. I dont see exchange going below 1.2-1 so again we might still have an exchange loss.
BUT - if we rent our rental income will be around £18k, but mortgage payments £24k. I dont understand the tax implication here in the UK and US.
My wife also own a small condo in the US already where essentially rental income = mortgage payement. Wil we owe tax to someone ?
We will certainly want to sell one property and buy in the US in around a year. Wife still has a good credit rating so hopefully we would get a good rate.
Any insight really appreciated.
