Owning a property in the UK
#1
Forum Regular
Thread Starter
Joined: Jan 2016
Location: Northern California
Posts: 71
Owning a property in the UK
So, I've sold my house and am thinking about buying a small bolt-hole for visits home, that I can rent out to tourists when I'm not using it. (Also planning to use it to bolster my meagre pension.) I'm in Cornwall, so the rental trade is good. However, I'm concerned about potential tax issues. I'm not even remotely au fait with US tax, but while browsing the internet, I've seen some articles that warn about having to pay tax on overseas properties if the exchange rates rise against the dollar. These articles suggest that even if the price of the property falls, I might have to pay tax on any 'gains' if the pound rises against the dollar. I'm assuming that's just when I sell the property?
Additionally, am I right in thinking that any property held overseas would be considered 'available equity' when applying for student finance for my daugher? I'm wondering if it would make better financial sense to forget the bolt-hole and use that money to reduce the size of my mortgage on my house in the US, as the main residence is not counted when applying for student finance.
Any other things I should be concerned about with respect to owning property in the UK while resident (green card holder) in the US?
Thanks in advance for any advice from those who've been there before!
Additionally, am I right in thinking that any property held overseas would be considered 'available equity' when applying for student finance for my daugher? I'm wondering if it would make better financial sense to forget the bolt-hole and use that money to reduce the size of my mortgage on my house in the US, as the main residence is not counted when applying for student finance.
Any other things I should be concerned about with respect to owning property in the UK while resident (green card holder) in the US?
Thanks in advance for any advice from those who've been there before!
#2
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Joined: Mar 2017
Posts: 315
Re: Owning a property in the UK
Others who are more informed hopefully will jump in on this but l believe there shouldn't be an exchange rate gain as the dollar is currently very strong against sterling and unlikely to get any stronger. the gain will be based on the exchange rate on the day you purchase and the day you either sell or remortgage. Obviously the dollar is at all time (almost) high and so repayments will become more expensive if sterling strengthens but that won't incur tax penalty as on paper your loan has become more expensive to pay off.
The only other tax l can think of that you may not be aware of is an additional 3% stamp duty on a 2nd property.
Hope that helps.
The only other tax l can think of that you may not be aware of is an additional 3% stamp duty on a 2nd property.
Hope that helps.