Help please as non resident landlord tax, ltd or individual?

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    Help please as non resident landlord tax, ltd or individual?

    Hi,

    I am currently a UK landlord with 2 BTL on individual name and 1 BTL under ltd company.
    I am planning to move to Australia and before to make the move I would like to re-structure my properties in the most efficient way to have cash flow while I live in OZ.

    Is financially better for a non resident landlord to own rented properties under individual ownership or ltd?

    I am open to sell and buy new properties under the best way in order to live off rent while I live abroad (hopefully).

    Any help please?

    Thank you so much!

    Z

    #2
    What is best for you - or anyone else - will depend on tax etc rules (income, CGT, IHT etc) when you/ltd co enjoy the income or sales in future).

    Nobody knows what those will be: especially the current or future governments
    I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

    Comment


      #3
      I understand the political uncertainty however if I need to plan the move I would like to understand what it will be better to do with my UK properties before to relocate.
      I am planning no to work in OZ and I am aware there is a treaty between Countries to don't double tax me.

      Any further ideas/suggestions?

      Comment


        #4
        Do your properties have mortgages?

        Do you manage through an agent?
        When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
        Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

        Comment


          #5
          Yes all mortgaged and yes I managed through an agent

          Comment


            #6
            OK, you're going to have to have a look at your mortgage terms and conditions, because most lenders won't allow a non-resident borrower, so you'd be in breach of the mortgage terms.
            And if you eventually weren't a UK citizen that would be another issue.

            You'd need to talk to an accountant who has experience of ex-pats in Australia.

            For your personal properties, you would contact HMRC and (almost certainly) they will require your agent to send any rent to you less basic rate income tax, pay the basic rate tax twice a year with a simple return confirming what it was for, and you would complete an annual self assessment which might result in a rebate if you had any allowable expenses.
            Obviously, your agent might charge you for the privilege.

            Your company is presumably UK based, so its income would remain in the UK until you wanted to move it overseas (probably using dividends or loan repayments) and I have absolutely no idea how they would be taxed in the UK or Australia.

            Which means that I can't really comment on whether the limited company structure would be better than the personal ownership!

            It's worth bearing in mind that transferring the properties into the company might be quite expensive.
            But fundamentally I think the issue is going to be the mortgages - your personal loans are probably not going to work, and I can't see many lenders keen to extend loans to a limited company who's only or main owner isn't local.
            When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
            Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

            Comment


              #7
              I do understand the point of having a mortgage for UK British resident, however can people not move Country because own properties?
              Perhaps within the fixed term lender and I are tight, then I should remortgage to products for non resident?

              Is this sensible?

              Comment


                #8
                Originally posted by Zaffiro View Post
                I do understand the point of having a mortgage for UK British resident, however can people not move Country because own properties?
                It can be done, but UK banking regulations make it very difficult for the lenders to allow it.
                https://www.thisismoney.co.uk/money/...-UK-expat.html
                When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                Comment


                  #9
                  When you move overseas, you must register with HMRC as a non-resident landlord , which allows the rental income to be paid to your bank account without deduction of income tax. Subsequently HMRC will send you an annual tax return to your overseas address for reporting the rental income from properties held under personal name.

                  You can claim the personal tax free allowance of £12K and expect to pay 20% UK tax on rental income from £12K to £45K for properties held under own name. Your rental income is liable to tax under the OZ tax net if you become resident in OZ.

                  Your ltd company ( incorporated in UK ) will submit annual accounts to Companies House and submit annual tax return to HMRC and pay corporation tax at 19%. If the surplus profit stays in UK bank account and not sent to OZ , the company has no OZ tax to pay.

                  The mortgage lenders operating on the High St are not set up to offer mortgage loans to borrowers living overseas due to difficulty in making checks on job income in overseas locations. So overseas borrowers may have to apply to a mortgage bank with branches in Jersey or Isle of Man or in Sydney.

                  Comment

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