Returning to Blighty: maybe ... maybe not?

Business Money
1

Hoping others in the forums have some suggestions.

I have been an expat for more than 20 years… Been a blast… In my own way. However, I’m now considering my options…

to buy a place for my mom to reside for the remaining years of her life (likely 10+ as she’s already hit her 80’s). She’s confessed to me that she’s fed up moving, and feels that her current tenancy arrangements don’t provide much security (my words, not hers). So, I’m thinking of offering to buy her a small place she can call her own.

Sounds simple, doesn’t it? It’s not. It can’t be in her name. I don’t want to give her the money to do it, worried that it’ll get swallowed up by her spending, or taxed as gift taxes, or some such ‘issue’. Also, the house can’t be in her name, if it’s my money. On her death, the house would be sold and the money would be divided with other siblings. No way to avoid that under Scots Law.

So the house has to be in the name of either myself/the spouse or a separate company. Legally, this should not be difficult. On her passing (since we don’t live forever, I have to consider this), we’d probably keep the place and rent it for a while afterwards. Property like that should be highly rentable as it is in a very good location in Edinburgh.

But I was wondering (after all, forewarned is fore-armed… or is that four-armed? )

  1. if I buy a house, and remain an expat… what would the implications be for obligations, such as taxes? I believe there might be some withholding taxes on any rental income…
  2. If I buy the house, and decide to return to the UK… how would I re-establish my residence in the UK?
  3. If I buy the house, and and decide to be a dual resident… could I take advantage of the tax treaties between the two countries?

The last is quite interesting… because I’d be able to take advantage of the best of Britain (before it disintegrates(?)), such as bank accounts, opportunties to make money, etc while living in Taiwan. I wouldn’t mind paying additional taxes in the UK… and if we do decide to go to the UK, then everything would be arranged for #2 previously.

Has anyone else ever owned property in the UK, rented it out (or let it to family), and lived in Taiwan? How did you do it? What problems did you face? Did you do this before you were an expat?

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We rent out our house in the UK, which was paid for before we left.

When you say you want to buy a house, do you mean buy it outright or get a mortgage. You would struggle to get a mortgage without being resident in the UK I think.

To answer your questions:

  1. You may be liable to pay tax on rental income. We pay tax, but that’s because my husband is still paying UK tax generally. If you aren’t resident for tax purposes in the UK, you may not have to pay any tax. Also, it may be the rent you charge will be below the tax threshold - though that doesn’t mean you shouldn’t declare it. Every year our letting agent sends us a form declaring we’ve paid X amount of tax on our rental income, which we then send on to our UK accountant.

  2. If you’re still a British citizen, the only thing you need to do to re-establish your residence in the UK is to go and live there. If your wife isn’t a UK citizen you’ll have to apply for her indefinite leave to remain, which is expensive these days.

  3. From memory, there’s little or no advantage to be gained by paying UK and Taiwanese tax. You’d be better off remaining resident in Taiwan for tax purposes (though owning a property in the UK will make the UK tax office more likely to consider you resident in the UK regardless of how long you actually spend in the country).

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I was going to PM you, ilikecoffee, but you seem to have that turned off. I have been renting out a property in Edinburgh for the past 11 years while living in Taiwan. PM me if you want more details.

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Sorry turned off PMs due to harassment from another forum member, who criticized me in a rude PM when I tried to help someone. After that I stopped using PMs pretty much. I’ve turned on PMs temporarily.

Actually, I’m not looking to rent any property. I’m just interested in finding out the ins and outs of renting out a property when you’re not physically in the country. I guess we’d probably use a factoring service, even with my mother’s property because of some of those things.

Thanks, Irishstu. And thanks, Petrichor. I realize the mortgage situation might be tricky. I wouldn’t fall within traditional measures of credit worthiness at all. Not sure how I can get around that.

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May I be the very first to congratulate you on being an astute stu :slight_smile: