helenmaine

For all of you who have sold your houses in the UK and paid off a mortgage early to move the money to oz, what was your experience of this. Were you charged a fee for early payment? Did you have any problems? Are there any things that need to be considered? We are 6 years into a 25 year mortgage but want to sell up and buy in oz (we've already been here for 2 years and have been renting out Uk property out)

Thanks!

thebears

Think from memory you have a 3 year grace period before CGT kicks in.

GinaUK

Whether you will be charged a fee for early repayment of your mortgage will depend on the terms of *your* mortgage. For example: on our current mortgage, we have no penalty for early repayment. Other people may get stung for 3 months interest (or more ) if they repay early. Get out your paperwork and have a look what your particular terms are.

What "thebears" wrote about Capital Gains Tax (CGT) is incorrect. If the house was your "main residence" when you lived in the UK, and you've been renting in Oz then your UK house will still be classed as your "main residence" and there is no CGT payable. There is no time limit in this (i.e. doesn't matter whether you sell now or in five years - no CGT payable).

Gina

thebears

Gina
The 3 years is from the tax office and based on you renting the property out in which you loose the "main residence" exception. They give you 3 years grace.

What I am unfamilar with would be the OZ tax implications.

frogboy

Earyl repayment fees are dependant upon your mortgage, your provider should be able to tell you this. We were told that there wasn't any early repayment fees but there was a £175 admin fee because we were paying it early - is this not an early repayment fee I asked? No this is just an admin fee!!!. Also we were charged £50 by them to send our deeds to our solicitor.

So they want £225 from us just so that we can give them all of the money back we owe - absolutely incredible.

One thing I have learned selling the house is that everyone wants money of you for doing the simplest of tasks, and its not just a couple of quid its absolutely pathetic how they can get away with it. Oh well rant over, good luck dealing with the parasites involved in your house sale.

cheers

pete jackson

We set up a 3 year fixed morgage about 6 months before we decided to try for the visa. now we have a £2500 penalty to pay when we leave because we still have about a year left on it!! pete

thebears

Gina I dont pertake to being a UK tax expert but based on the information from my tax partner my info does have merit. I refer you to the following:

http://www.hmrc.gov.uk/helpsheets/ir283.pdf

What also needs to be considered is the gain in value and the offsetting of normal annual CGT exemptions by husband and wife.

uk+kiwi

But if the UK property is your main residence (which I believe the OP can claim) then there is no CGT regardless of timeframe as Gina mentioned.

Additionally if there's any debate over whether it is a PPP or not, a week spent in the house could also change everything. Should consult a tax accountant if there's any doubt, but if the OP doesn't own a house in Aus then it's clearcut - no CGT to worry about.

Mortgage redemption costs are another matter entirely and no-one but the OP & someone from their mortgage company can answer that one since it depends on the individual terms & conditions. The paperwork should clearly show this.

GinaUK

Thebears, the above only applies if the person who owns the property is regarded as UK domiciled for tax purposes (even though they may physically live abroad). Then they will have to pay UK tax according to UK tax rules.

But the OP is an Oz resident for tax purposes and pays Oz tax. Therefore, the info you posted does not apply to them, doesn't fit their situation. They will *not* have to pay UK Capital Gains Tax on the sale of their UK property. ("Gain in value, husband/wife annual CGT exemptions" - none of this applies in this situation.)

Hope this helps.

Gina

demigrate

Nearly all of the banks have early replayment charges, however these have rocketed over the last few years due to the mortgage providers rates being squeezed through competition.

We decided to pay our mortgage off 4 years into a 25 year mortgage. We spoke to the bank who said the exit charges were GBP 225. I searched through my documents to find that 4 years ago the fees were GBP 75. After a lot of discussion with the bank, I threatened to send the case to the FSA (Financial Services Auhority) at which point they backed down and said that the fee would be GBP 100 (not great but a lot less than 225). At the moment The Times are doing a feature on these early repayment charges as they are unreasonable, effectively fines not admin charges.

Well worth looking into when you redeem your mortgage.

Darren

TheAshleys

I got stung UK£8000.00 !!!!

Bloody Portman Building Society, never ever use them !

They conned me on a re-mortgage. Linked the new deal to the old deal. The new deal was only small, so was £1000.00 redemption, but they stung me on the other which was well outside it's original penalty period.

Got legal advice, and was told it would cost more than £8k to fight it, and there were no guarantees, so best to swallow it !

Absolutely gutted.

Jimmy Cliff

We have got a redemption payment of £4,700 with only 6 weeks to the end of the mortgage term. We accepted the offer on the house knowing they wanted to be in to settle their kids into the area/new school. We took the offer and are swallowing it. We thought, if we dont take this offer, what if the house does not go for a few more months, we would then have to spend that on a validation trip for 4 of us.

You win some......