epymsam

Hi, I wonder if you could help me with a quick question re. my property in the UK.

I'm moving to the US on an L-1 but may well go for the green card once I gat married to my fiancée who is a US citizen. I'm planning on letting my property but I doubt that I'll get enough rent to cover the mortgage payments. So here are my questions:

1. I understand that mortgage interest is tax deductable - can you confirm this please?
2. Since I will be making a net loss each month (my rent will be ~ £300 short of the mortgage payments) is this also tax deductable? And if so under what rules and how do I file for this?
3. I understand that the capital gains tax kicks in in three years time. I've been in the house for 2.5 years, I move away to the USA, so long as its been my principal residence for at last two of the last five years its CGT exempt? Can you confirm this?
4. What about tax relief on refurbishments in order to make the property rentable - i.e. laying carpets to protect the floors. Can I claim these as deductions?
5. Are there any other reliefs for standard wear and tear on the property?
6. Are estate agency fees tax deductable too?

Any help / advice would be much appreciated.

Kind regards,

e.

Elvira

You will have to declare your rental income to both the IR and the IRS, but you can claim a foreign tax credit if you do pay tax on any profits. Not sure what happens if you make a loss.

Both the IR and the IRS publish detailed information on how to deal with rental income.

However, bear in mind that if you become a PR and then sell the UK property at some point in the future, you could potentially land yourself with a large tax bill on any capital gains.