House In UK
 

Dear forum,

I and family are planning to move to Canada.

We had moved home last Nov.

We have a mortgage with Clydesdale with fixed interest for 2 years (Nov'14).

I bought the house with 15% deposit.

We are planning to move in June/July'14.

I am keen on keeping the house.

Should I rent or should I leave the house empty?

Ideas/suggestions welcome.

Thank you.

Re: House In UK
 

Get a valuation on the property, as you may be liable for capital gains tax on if you sell it and make a profit after becoming (and remaining) a tax resident in Canada.

Re: House In UK
 

Are you planning on buying over in Canada? Will you need to sell the house to do so?

Re: House In UK
 

Hi Tirytory,

I would like to buy in Canada.

Initially I would rent for a year in Calgary, save some money and then buy.

I am more inclining towards keeping the house vacant and asking someone (?who) to look after the house.

Re: House In UK
 

Hi Aviator,

It may sound silly but I don't understand what 'liable for capital gains tax' means. I don't even know what capital gains tax is.

Will google it now though.:)

Re: House In UK
 

Just read about it.

But, what if I want to keep the house and not rent at the same time?

Re: House In UK
 

In the tax year after you become tax resident of Canada, your home in the UK will cease to be your principal residence.

If you sell it while a tax resident in Canada and make a profit between the value on the day you become a tax resident and the day you sell it, minus expenses and mortgage, you pay tax on half the profit at whatever tax rate you are paying in the year you made the gain.

This is all calculated in CDN$ based on the rate you take up residency and the FX rate on the day you sell, so the FX rate can affect profit or loss as well.

Conversely, any capital loss can be offset against future capital losses.

Re: House In UK
 

I think it depends on your plans for the UK house in the future, either short term or long term.

Having someone look after the house if you intend to sell is probably a good idea, I think selling while you have people renting is tricky.

If your house is your main residence in terms of ownership, you do not pay capital gains tax, if you rented it out and bought somewhere else, then you are exempt for three years (?) but then will cop for capital gains tax.

Re: House In UK
 

Rent is income, so any rental income, minus reasonable expenses and mortgage interest is taxable as income.

If you sell the house it is assessed as in previous post.

Re: House In UK
 

Aviator, if you're just renting in Canada, surely it is still primary residence? Or is it completely different to Uk tax law?

Re: House In UK
 

Ok. I am getting the idea now. Thanks to you.

But what are the pros and cons of keeping the house empty?

At least I and family have a place to stay when we go on holiday (which, I think, will be at least once a year).

Re: House In UK
 

Why would you want to keep an empty house apart from an occasional holiday home?

Re: House In UK
 

Re: House In UK
 

2 reasons-

1- I have read many horror stories re renting.

2- The comforting idea of having a place to go back to whenever we would like.

Re: House In UK
 

Here are your options from my POV

if you are sure Canada is going to be your home for an indefinite period - then sell the UK house.

If you are planning on only staying in Canada less that 12 months you can either rent the house (god knows what condition will it be in 12 mths after you rent it) or you could sell it

I would suggest 'sell it' to use the money from the sale for life in Canada. Emigrate & make a clean break. If all hell breaks loose & you go back to the UK, it'll be after an open minded life experience in Canada to a new (different somewhat) start-up back in the UK, to a different house in a different part of the country to a new position.

Either way, its your choice/decision & I'd be interested to know what your thoughts or ideas on what you were going to do with the house before posting the OP?