mudcat

Hello,

I'm looking at buying a property in Scotland close to my parents, for extended trips, remote working, and family use. Primary residence is Ontario and I also live and work here permanently. The fact the myself and family would get use out of it, plus it's actually in our budget as compare to Ontario cottages, makes it attractive. I would have family available to check-in on the place, deal with any contractors, etc

I'm looking at using my Canadian HELOC for this.

I'm wondering if anyone knows if I can tax-deduct the interest paid on the HELOC for what is a foreign investment?

I'm also looking for general advice on buying/owning property in Scotland while living/working in Canada - is it more hassle than it's worth? Are there estate planning/tax implications (I know of course I'd need to declare the property and income appropriately) - Not sure if it might make sense to put a local family member on the title, or create a trust. it would be good to discuss with a professional however not sure if I can find someone who knows about the implications in both countries.

Thanks

mudcat

Please can an admin move this to "the maple leaf" or tell me how to do it? Thanks

christmasoompa

Only mods can move threads - for future ref, just hit the report button (the exclamation mark at the bottom of each post) to bring a post to a mod's attention. I'll move it to the main Canada forum as I think that's the best place for it, hopefully somebody will be able to help you.

HTH.

Gozit

Following this, I may be interested in doing the same with a flat in Malta...again, I can actually buy something in my budget there vs. here, the only viable options involve taking a mortgage for 600-700k.

There is definitely estate planning involved, you would want to make sure you have Canadian and UK wills up to date. Do not think it would be a good idea to put local family on the title unless you want those family to inherit the property when you die instead of your children. But plenty of people do this.

Pulaski

Opinion on BE is divided, but I would caution against having two wills. One will is adequate even if you have assets in two (or more) countries, and two wills may cause significant complications, including that one of them may be ruled invalid and voided by a court after your death. .... In short, legally speaking you can only have one "last will and testament".

Atlantic Xpat

Do you plan to rent it out? If yes, then potentially, but of course the income is also subject to tax. If its just a purchase for you and family to use with no investment/income potential (beyond property appreciation) then IMHO the interest wouldn't be tax deductable, irrespective of where it is located.

Gozit

Does there not carry a risk of the other country refusing to acknowledge the will created in another country, and thus dividing the property as if there was no will? That would be the only thing I would be worried about.

Pulaski

No. Having a will is pretty much universally acknowledged. There is the possibility of there being national rules on how an estate is divided, but those trump having a will no matter where the will was written. So if the country you're living in says that 50% of the assets go to the surviving spouse then 50% of the assets in that country must go to the spouse no matter where your will was written. And in fact I suspect that having a local will might actually ensnare you in the situation that you are trying to avoid. For example if you have a holiday home in Spain but live in the UK, then under UK law you can leave your estate, including your holiday home, to pretty much anyone you choose, but if you had a Spanish will for your Spanish holiday home then you may find that your Spanish estate has now fallen into the jurisdiction of Spanish inheritance laws, with some fractional interest in the holiday home being inherited by your spouse. (I am not an expert on Spanish inheritance laws, so that may not be the case anyway, I just made the example up to illustrate the point.)

Bear in mind that the standard wording of wills, in English, and I believe generally in other languages, specifically voids all prior wills, so the beneficiary of which ever will your wrote last likely has a legal right to enforce that in any country where you left assets, and in the event of a legal challenge would likely prevail as the holder of your last will and testament.

And anyone who honestly thinks that their heirs will "do the right thing" and not fight amongst themselves over their estate is either a pauper, or IMO is probably being more than a little naive.