Mortgage in homecountry and moving to the ME?

[Skyjob]

The solution for one in the UK is to create what is known as a SPV, a Special Purpose Vehicle, essentially a company-style run paper exercise which works in its simplest form like this:
- You set up the SPV with the sole intention to purchase and rent out your property;
- You hold 100% of shares in the SPV (or distribute them at your choice to others);
- As you run it as a company interest relief as per above remains valid as company is based in UK;
- Additional corporate expenses can be subtracted from running your SPV, think of required travel costs for (bi-)annual inspections, running costs, insurance;
- As per any corporate entity in UK, the SPV can reinvest or pay its shareholders;
- Residency does not have value in this case as the reinvest option allows moneys to be reinvested into another SPV in future for a separate purchase;
- Shares can be in future transferred to wife and/or children or others as you wish;
- SPV remains free from inheritance if constructed properly;
- SPV can get mortgage as a corporate entity, your living status is not a problem, a UK family member could set up a SPV for £1, additional shares then made available to you;

[777boyo]

Skyjob - a good plan if the SPV is set up prior to buying a property, and you complete the purchase/mortgage arrangement as the SPV, rather than as a "personal" purchase. However, as I understand the situation, once you (as an individual) own a property (with or without a mortgage), a subsequent transfer of that property to an SPV would require the sale of the property to the newly set-up SPV, thereby incurring Stamp Duty once again. This might not be too painful on a single property - £10,000 on a £500,000 property,for example, but on a buy-to-let or second and subsequent properties the Stamp Duty would be £30,000 on a £500,000 property. There would also be the additional set-up costs for any "new" mortgages required by the SPV. Total cost involved would be possibly acceptable on one property, but for more than one it could become an expensive exercise.
Once again, I'm open to correction on this, and would be interested to hear other opinions.
7B

[Avenger]

777, yes that's correct, the existing mortgage would need to be settled, the new purchase completed via the SPV and then the land registry title completed. As you observe, this is a costly exercise, SPVs work well if you have a chunk of cash to buy outright or with minimal loans, if you wanted a new mortgage via an SPV you would need to get a buy to let and the deposit could be north of 30%. The other sting is the interest rate SPV rates tend to be about 2% higher than standard rates. Even if you have an SPV in the UK you will need to fill a self assessment and and declaration under the non-resident landlord rules or the should stop tax from the rental. For one property, it's much easier just to declare the income and pay the tax... if any Profit exists after regular maintenance and service costs, improvements are not tax deductible.

[ironbutt57]

Originally Posted by seven3seven

Permission from the bank to rent out my property? Oh bullshit it has nothing to do with them.

it ain't yours if there's a mortgage, it's THEIRS

[hunterboy]

The only other thing to watch out for is once you haven’t been living in your UK property for 3 years, you lose the tax free exemption if you end up selling it. It is worth getting the property valued when you leave the UK and after the 3 years for a baseline to be used when calculating any capital gain due if you sell it.