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Re: UK rental property while living in Canada
Let me get this straight - if you keep it for 5 years and then sell, you owe nothing in terms of UK CGT? How does that make any sense?
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Re: UK rental property while living in Canada
Originally Posted by amlangford
(Post 9234990)
hey John, funny to see you reply. how's it going?
Were mortaged with britannia building society. I spoke to nationwide yesterday and they wouldnt touch us, a) because is classed as "buy to let", technically, I didnt "buy it to let it", I bought it to live in it, and now I want to let it...and b) because were non UK residents. Ill call Santander to se if they can help us Things not going to bad, not all to plan yet on the job front but something will come soon. I'll PM you soon and explain more. Cheers JB |
Re: UK rental property while living in Canada
Originally Posted by G77
(Post 9235724)
Let me get this straight - if you keep it for 5 years and then sell, you owe nothing in terms of UK CGT? How does that make any sense?
However, if you choose to settle in Canada, Canada assumes you sold and repurchased your assets on the day you become tax resident. The subsequent sale or disposal may create a capital gain in Canadian dollars. Or more likely, given UK house prices and the pound sterling over the last few years, a capital loss. |
Re: UK rental property while living in Canada
Originally Posted by JAJ
(Post 9235007)
Don't be ridiculous ... you don't have to give it away, you just have to sell it for what it is worth. Which is a figure greater than zero, although perhaps not in line with your aspiration.
If we sold it for less than we owe on it just to achieve a sale, that I would term giving it away!!! |
Re: UK rental property while living in Canada
Originally Posted by amlangford
(Post 9234985)
Hi mags1972
Yes, its a very annoying situation. Like you, we are actually at a loss from renting our house, when youy take the management fees into account...and that's on a rate of 3.89%. If we're forced to take out a buy to let, we'll likely be on around 7%, and thus even more loss. We're being tainted with the same brush as the people who rent properties for a living ... At this stage Im stuck. I'm contacting an IFA for advice, ill keep you posted |
Re: UK rental property while living in Canada
Originally Posted by mags1972
(Post 9237022)
Why am I being ridiculous???? :frown:
If we sold it for less than we owe on it just to achieve a sale, that I would term giving it away!!! http://www.merriam-webster.com/dictionary/gift Definition of GIFT 1 : a notable capacity, talent, or endowment 2 : something voluntarily transferred by one person to another without compensation 3 : the act, right, or power of giving |
Re: UK rental property while living in Canada
We are currently renting out our property. It's on a standard mortgage.
I don't believe it's fraud. The banks use buy to let mortgages because they require a larger deposit in case the property remains empty, you can't afford to pay the mortgage, and they end up re-possessing it. Good luck |
Re: UK rental property while living in Canada
Originally Posted by skippy2107
(Post 9237442)
We are currently renting out our property. It's on a standard mortgage.
I don't believe it's fraud. The banks use buy to let mortgages because they require a larger deposit in case the property remains empty, you can't afford to pay the mortgage, and they end up re-possessing it. Good luck |
Re: UK rental property while living in Canada
Originally Posted by skippy2107
(Post 9237442)
We are currently renting out our property. It's on a standard mortgage.
I don't believe it's fraud. The banks use buy to let mortgages because they require a larger deposit in case the property remains empty, you can't afford to pay the mortgage, and they end up re-possessing it. Good luck We had that for 3 years after that Nationwide said we must pay the extra 1.5% as they say its additional risk. |
Re: UK rental property while living in Canada
Originally Posted by PeterF
(Post 9237658)
The mortgage provider must give written permission to enable you to rent it out. If you have not informed them then it could possibly be seen as fraud on their behalf.
I have never heard of something like this being considered fraud (especially as it relates to an existing mortgage, not a new one) but of course I could be wrong. However, a breach of mortgage conditions may give the lender the option of a number of civil remedies, including requesting immediate repayment of the loan. Read the mortgage conditions and consult a lawyer experienced in this area. |
Re: UK rental property while living in Canada
Originally Posted by mags1972
(Post 9234855)
Hi Adrian,
We are moving in 9 weeks to Alberta and have a similar problem, our house is not going to sell unless we give it away so that isn't an option, we are currently on a tracker mortgage and have been told the same as you that we need to take out a buy-to-let mortgage to rent which I don't get as it is a higher interest rate. The way it is looking at the moment that monthly repayment is more than the house is valued at rentwise, how is that right??? Anyway if you get any answers I'd be interested to know the outcome :thumbup: To ensure you protect your money and the lenders money, make sure you have a landlords buildings insurance and not just your normal policy. |
Re: UK rental property while living in Canada
Originally Posted by Cape Blue
(Post 9237738)
I know plenty who have not told their lender they are letting and have had no problem - its a risk, but what are your alternatives?
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Re: UK rental property while living in Canada
Originally Posted by JAJ
(Post 9237796)
Sell the house.
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Re: UK rental property while living in Canada
Originally Posted by Cape Blue
(Post 9237809)
Indeed, but if you crystallize a loss that you can't afford, continuing to rent (even without telling the lender) may be the most sensible choice.
If we were to sell it and get nothing out of the equity after living in it for 12 years, what's the point honestly?? The exchange rate and house price slump has made our future plans much harder than they should have been, simply selling at a loss or no profit is not an option we can take as we still have UK debt to pay off also after our move. |
Re: UK rental property while living in Canada
Originally Posted by mags1972
(Post 9238581)
Exactly, thanks CB. JAJ doesn't seem to realise that in our case we are not particularly well off, we have saved every penny we can to make this emigration possible and we we're planning to use the small amount of equity we had approx $18000, for a deposit on a house in Canada.
If we were to sell it and get nothing out of the equity after living in it for 12 years, what's the point honestly?? The exchange rate and house price slump has made our future plans much harder than they should have been, simply selling at a loss or no profit is not an option we can take as we still have UK debt to pay off also after our move. - rent it out, don't tell the lender and hope not to get caught. This gets messy because the lender needs an address for correspondence and, if that's not the house, they'll wonder what's up. You can't have the post forwarded forever and, anyway, that's not very reliable. If you use a foreign address they'll work it out exactly, if you use a friend or relative's address in the UK then that probably is fraud, besides which, they'll still know you're not living in the house. - negotiate a mortgage that allows rental use. Make a loss on the rent, hope for a recovery in house prices to make it all worthwhile. The merit of this depends a bit on the likelihood of wanting to move back. - sell, live with the loss. - don't emigrate. Live in the house. None of these, except perhaps the last one, look like great options but it's hard to see how, after twelve years of owning the thing, you have no equity in it. I'd have thought this more commonly to be the case for someone who's owned the house for a much shorter period. None of this is "fair" of course and, to compound the problem, emigrating to Canada means giving up indexing of any state pension you might receive. |
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