How many are renting their UK homes without telling the bank?

[bwatt99]

Anyone know what halifax do or charge etc to do this

[RobertaSparrow]

Or informing the Australian Taxation Office. A dangerous thing to do these days with the close links with Inland Revenue not to say potentially very costly.

 

Eh? HMRC don't care about consent to let - you just need to put the right numbers in the right box and pay the right amount.

[Flathead]

Eh? HMRC don't care about consent to let - you just need to put the right numbers in the right box and pay the right amount.

He is talking about the Australian tax office.......you will be liable for tax on the rental income in australia...depending on your visa

He means you have to declare the income.....nothing to do with consent to let

Edited January 11, 2013 by Flathead

[Taylors4]

Or informing the Australian Taxation Office. A dangerous thing to do these days with the close links with Inland Revenue not to say potentially very costly.

 

Really don't think any one here has implied they are going to evade paying tax!! All overseas income will be declared. You have to fill out a tax form to rent your house out whilst overseas anyhow, so don't really see what this comment has got to do with the subject in hand.

[Taylors4]

I think they do, I also consulted a mortgage broker and she said that at the moment if you have a mortgage with Halifax they will let you do it. This was my other option to transfer our mortgage to the Halifax as they allow you to sub-let. No sure of the charges if you are already a customer, but to get a new mortgage with them at the moment there was no fee and free legals, so its worth asking the question.

[Taylors4]

OOps this is for Bwatt99

 

I think they do, I also consulted a mortgage broker and she said that at the moment if you have a mortgage with Halifax they will let you do it. This was my other option to transfer our mortgage to the Halifax as they allow you to sub-let. No sure of the charges if you are already a customer, but to get a new mortgage with them at the moment there was no fee and free legals, so its worth asking the question.

[lozzachino]

We told our mortgage provider, sent forms to us and that was it. No

Higher payments nothing. Very pleased to say the least

 

You are lucky!! Are you allowed to say who your mortgage is with?

[lozzachino]

Bear in mind that if you end up paying more interest on your loan,because of renting it out, that you can offset the interest against your Australian tax

We are in this situation, how do we do that? Is it just australian tax due on uk income or can you offset against employment income in australia?

 

we rent our house out for less than the mortgage payment so technically we make no money on our rental and pay into it every month as well as having upkeep costs.

 

its all so confusing!

[lozzachino]

Our mortgage is with halifax. We had to pay a fee to get permission to let and were forced to switch to a buy to let product with a £1500 product fee and 2% higher interest rate. No choice in this whatsoever. Also had to switch to interest only as the rent paid is £550, of which we get £470 after estate agent fees. On a repayment mortgage this would have been over £700 but on interest only it is £570, so we are still paying £100 in every month.

 

hubby often says we shouldnt have told them in the first place. Estate agent did say they are obliged to advise that we have a consent to let in place. We have landlord insurance too through halifax, its £11 a month. I just wouldnt forgive my self if the tenant burned the place to the ground, insurance wouldnt cover it and we still owed a full mortgage on it!

 

if i could give my house keys to the bank and have rid of it i would.

 

on top of which our tenant of 19 months handed her notice in 2 days ago!

 

it is stressful but i guess less stressful than trying to sell by a deadline.

[bwatt99]

Our mortgage is with halifax. We had to pay a fee to get permission to let and were forced to switch to a buy to let product with a £1500 product fee and 2% higher interest rate. No choice in this whatsoever. Also had to switch to interest only as the rent paid is £550, of which we get £470 after estate agent fees. On a repayment mortgage this would have been over £700 but on interest only it is £570, so we are still paying £100 in every month.

 

hubby often says we shouldnt have told them in the first place. Estate agent did say they are obliged to advise that we have a consent to let in place. We have landlord insurance too through halifax, its £11 a month. I just wouldnt forgive my self if the tenant burned the place to the ground, insurance wouldnt cover it and we still owed a full mortgage on it!

 

if i could give my house keys to the bank and have rid of it i would.

 

on top of which our tenant of 19 months handed her notice in 2 days ago!

 

it is stressful but i guess less stressful than trying to sell by a deadline.

 

your saying this about halifax and below is what was said by another:

I think they do, I also consulted a mortgage broker and she said that at the moment if you have a mortgage with Halifax they will let you do it. This was my other option to transfer our mortgage to the Halifax as they allow you to sub-let. No sure of the charges if you are already a customer, but to get a new mortgage with them at the moment there was no fee and free legals, so its worth asking the question

 

So what do halifax want when it comes to this,i would rather not say to be honest,im really getting confused about all this,i cant see me getting the house sold soon so be looking to rent,im not sure if using an agent or if to get my parents to look after etc,and did i hear right that australia takes tax from you on what you earn on the rent?

I would still be paying my mortgage,hoping that the rent im charging would cover it and also a bit left over to send over to oz,did i hear you get taxed on this,how would they know in oz,is there taxes to pay in uk also,there seems to be a lot of issue,info on just renting a house in the uk while living overseas is it worth it to be honest renting property in the uk or is it we have no choice and cant sell so other option is to rent?

[Flathead]

I would still be paying my mortgage,hoping that the rent im charging would cover it and also a bit left over to send over to oz,did i hear you get taxed on this,how would they know in oz,

because you are legally obliged to declare it. Australia taxes you on your worldwide income from any source

 

Tax evasion is a serious offence

[Taylors4]

because you are legally obliged to declare it. Australia taxes you on your worldwide income from any source

 

Tax evasion is a serious offence

 

I really don't think anyone discussing this topic is wanting to evade their tax responsibilities they are just wanting sound, factual advice. Obviously renting property offshore is going to attract a tax implication, but people want as much information about this. The next thread I was going to start are exactly what are the tax implications of renting overseas, as people need the facts.

 

As far as I know, when you rent out your UK home you do fill in a tax form, informing the tax man you are overseas. From what I can gather so far, the country in which you are a resident is the country you file a tax form from, so as you are in Aus, you will be taxed in Aus, declaring your overseas income. As in Europe, they have have a double taxation agreement (which means you will not be taxed in both countries). But I'm not totally sure on any of this so I will start another thread and hopefully people who have done this will be able to shed a little more light on the situation for us. What happens though if you are a temporary resident and don't have PR status, what happens then?

 

Also, think I have read that you should get in writing you property valuation before you leave the UK, as if you sell, you are liable for capital gains on the amount the property has increased AFTER you have left (not on the whole amount). If it goes down in value though, I'm pretty sure they won't be giving a refund! Again, if anyone has any further experience or advice on this issue - please let us all know.

[RobertaSparrow]

If you're on a temp visa then you don't declare foreign rental income in Australia but, obviously, you do decalre it in the UK.

 

You should've told HMRC that you're no longer resident (temp or otherwise) via a P85 so that you no longer have to do tax returns, etc. I assume this means that you'll get taxed on all of your rental income because you'll no longer have a personal allowance. But not sure about this having not done it yet.

[Guest Julz]

We rented it to the MOD (via their agents HCR) who told us they were putting a military family in it and then stuck a bunch of squaddies in (who used it like a barrack block). The tenants actions (disabling fire alarms, leaving live ammunition in the house, moving girlfriends in etc) invalidated our insurance anyway, so we could not claim the excess back, and we were over the limit to take them to the smalls claims court, and county court meant solicitors. Thus we were left heavily out of pocket

 

Rubbish!! I am a military family and I know that they will only accommodate married couples or single parents in married quarters or private housing if their is none available. They will NOT house couples who are not married or single soldiers. As for leaving live amunition around the house, what a load of sh*t, they very rarely get to use live ammunition and it gets accounted for so it just doesn't happen. Do you really think they are allowed to walk about the barracks with live amo? We are given white glove inspections when we vacate properties and are charged for the slightest mark so the property is left in a very good standard.

[Taylors4]

If you're on a temp visa then you don't declare foreign rental income in Australia but, obviously, you do decalre it in the UK.

 

You should've told HMRC that you're no longer resident (temp or otherwise) via a P85 so that you no longer have to do tax returns, etc. I assume this means that you'll get taxed on all of your rental income because you'll no longer have a personal allowance. But not sure about this having not done it yet.

 

Thanks for that I'll look up the P85, I should be having a meeting soon with the our friend (accountant) who does our company accounts so will have a heap of questions for him on this matter. I'll post on here all info he gives as it may help people. Yep think you are right as in the UK, as it stands you get taxed on the profit you make from your rental income, so I think they take the amount of rental income, then deduct all your mortgage payments, landlords insurance, life insurance, repairs etc, then tax you on your overall profit, after these deductions.

[Taylors4]

So what do halifax want when it comes to this,i would rather not say to be honest,im really getting confused about all this,i cant see me getting the house sold soon so be looking to rent,im not sure if using an agent or if to get my parents to look after etc,and did i hear right that australia takes tax from you on what you earn on the rent?

I would still be paying my mortgage,hoping that the rent im charging would cover it and also a bit left over to send over to oz,did i hear you get taxed on this,how would they know in oz,is there taxes to pay in uk also,there seems to be a lot of issue,info on just renting a house in the uk while living overseas is it worth it to be honest renting property in the uk or is it we have no choice and cant sell so other option is to rent?

From what I've seen and read so far, I'm ASSUMING that if they find out if you don't tell them then what the mortgage company are within their right to recall the debt, as the condition of the mortgage would be in breach. You would then have to get an ex-pat mortgage from Oz to repay the debt.

 

But, as everyone had said already, how can they find out if you continue to pay the mortgage, obviously if your tenant burnt your house to the ground, then you would be in a sticky situation, as they insurance probably wouldn't pay up (unless you had landlords insurance, but knowing what tow rags they all are, if they can find a loop hole not to pay up they will, i.e if they found out you hadn't told your lender). However, all of this is highly unlikely and I don't personally know anyone this has happened to.

 

When I discussed renting our house with an agent, they said they needed to know if we had agreement from the lender - but didn't ask for evidence. They give you the tax form to fill in for being overseas. With regard to taxation, I'm pretty sure it would work the same as it does here, yes you are taxed, but on the profit, so you take what you have earned from your property and then deduct all your expenses; mortgage payments, insurance, life cover, repairs etc. So your tax bill may not be as high as what you might expect. It all probably depends on what you are earning in Aus too. There's another can of worms to consider!

 

If I were you I'd me making a couple of calls to your mortgage provider, to an estate agent and ask them and get it from the horses mouth - it would only take half an hour and then at least you know what you can and can't do. Also if you know an accountant, ask their advice.

 

Its a hard one as we are all trying to protect the equity we have in our house if we can't or don't want to sell at this present time. Selling in a depressed market, to then ship your money over to Oz on a crap exchange rate - doesn't do it for me at the moment. Its taken half a life time to get this far and I for one don't want to give that away. If I didn't have much equity though I'd sell as it probably isn't worth the it. Hard decisions ahead, good luck and if selling is what you need to do.

Edited January 13, 2013 by Taylors4

[Incata]

Rubbish!! I am a military family and I know that they will only accommodate married couples or single parents in married quarters or private housing if their is none available. They will NOT house couples who are not married or single soldiers. As for leaving live amunition around the house, what a load of sh*t, they very rarely get to use live ammunition and it gets accounted for so it just doesn't happen. Do you really think they are allowed to walk about the barracks with live amo? We are given white glove inspections when we vacate properties and are charged for the slightest mark so the property is left in a very good standard.

 

Happy to post the photos of the damage done. We too are a military family and felt that, due to the high standard we are required to leave married quarters in, that the house would be treated well and left in a good condition. We also thought that any damage would be rectified (indeed this is what the agents told us). We were horrified at the damage done - £5500 worth in fact. We only got £3700 back which left us significantly out of pocket. We were also horrified that they let it to squaddies. We were told that it was going to be let to a military family. However the situation in Plymouth is that they do not have enough barrack block accommodation for the number of ratings they have down there. Feel free to check this if you would like to. The first agent to start with is Beresford Ward who currently have about 20 properties let to the military who have squaddies in.

 

We have just vacated military married quarters (our third lot since we got married) and you are quite correct, they charge for every single mark. However, when you let it to them as a private landlord (via their agents HCR) it's whole different ball game. Feel free to call any number of estate agents in Plymouth (Beresford Ward is a good starting point) who have let properties to HCR and their experiences with the damage done by said sqauddies. When we evicted them out of 20 properties, Beresford Ward had 3 claims for damages in with HCR.

 

My husband, being military and somewhat of an excellent shot (shooting is also a hobby of his), is very good at identifying live ammo. We too were amazed that they got it into the house - what on earth were they doing with it there and why did they need it in the house? Beats me, I'm not military, but my husband is.

 

Perhaps you should check your facts a little better.

Edited January 13, 2013 by Incata

[RobertaSparrow]

Thanks for that I'll look up the P85, I should be having a meeting soon with the our friend (accountant) who does our company accounts so will have a heap of questions for him on this matter. I'll post on here all info he gives as it may help people. Yep think you are right as in the UK, as it stands you get taxed on the profit you make from your rental income, so I think they take the amount of rental income, then deduct all your mortgage payments, landlords insurance, life insurance, repairs etc, then tax you on your overall profit, after these deductions.

 

Also ask your accountant about something called the Overseas Landlord Scheme. Or something like that. I've read somewhere that if you haven't applied to HMRC to pay your own tax on your UK rental income then your tenant or agent has to take 20% off what they pay you and they have to account for it and pay it to HMRC instead.

 

How do other people work this?

[RobertaSparrow]

From what I've seen and read so far, I'm ASSUMING that if they find out if you don't tell them then what the mortgage company are within their right to recall the debt, as the condition of the mortgage would be in breach. You would then have to get an ex-pat mortgage from Oz to repay the debt.

 

The banks are more likely to automatically move you to a higher rate mortgage than to recall the loan. http://www.ft.com/cms/s/0/e5d2fd34-1c34-11e1-9b41-00144feabdc0.html#axzz2HuNdlBiW

[WarriorSteve]

Hi we have a mortgage with Santander, advised them we were emigrating but liked to rent our house out, we had to pay £200 for consent but no changes in the monthly payments and no limit on the amount of years we can rent the house out for, so we were made up with this.

 

We also have to send the tax form off about the rent, I think it's called nr11.

 

Nicola

 

From what I've seen and read so far, I'm ASSUMING that if they find out if you don't tell them then what the mortgage company are within their right to recall the debt, as the condition of the mortgage would be in breach. You would then have to get an ex-pat mortgage from Oz to repay the debt.

 

The banks are more likely to automatically move you to a higher rate mortgage than to recall the loan. http://www.ft.com/cms/s/0/e5d2fd34-1c34-11e1-9b41-00144feabdc0.html#axzz2HuNdlBiW

[Flathead]

You can not claim all your mortgage repayments against tax.......you can only claim the interest not the capital

Edited January 14, 2013 by Flathead

[NowPerth]

We had a mortgage with the Nationwide. We explained the situation to them. There was no extra fee for the first 6 months from when tenants moved in, then just a small amount increase from then on. I was glad we told them for the peace of mind if anything had gone wrong and we needed to claim on insurance.

[Guest]

most of them you can just tell them and there's no difference if you say intend to come back in a year or two.

The only one that I know of that dont like it is nationwide as they dont offer buy to let.

 

However you arent buying to let if you have lived in it and going to live in a different country.

 

all you are getting is permission to let on a short term basis - they will just forget about it after you have tod them anyway.

 

i just told mine and didnt suffer anything. I thought they might try to charge a higher percentate but they didnt as I said I would be back.

[Gareth 666]

So I've checked my mortgage with Lloyds and I'm on a Cheltenham and Gloucester mortgage.

They put me through to the 'consent to let team' and so I'm thinking, if they have a team dedicated to it then it ain't gonna be cheap!

Turns out that I have to change my mortgage to a higher interest rate but no fee to change. It added around £120 a month on a £170 mortgage, I reckon that's around a 70% increase!!

Thank god we don't have a massive mortgage.

Time to shop around and change lenders before we look to move me thinks

[lozzachino]

Just did some googling and looks like we had to move to a higher rate product as we were on standard variable at the time and to have a consent to lease you have to be on a product. Sneaky so and so's.