It’s a personal Brexit for this landlord!

by Readers Question

12:33 PM, 16th August 2018
About 2 years ago

It’s a personal Brexit for this landlord!

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It’s a personal Brexit for this landlord!

I couldn’t think of a title for my article so i will leave that to the clever people at Property118.

With Brexit, Section 24, Selective Licensing and all the other crap the Government are throwing at us I am still undecided on what to do, at least in part anyway.

Being an avid reader of almost everything Property118 publish I finally decided to sit down and crunch my own numbers to see exactly how badly affected I will be. So, I got my credit card out and forked out the £97 that Property118 charge for their tax planning software. What an amazing piece of kit that turned out to be! The detail it goes into blew my mind, and it has been made so easy to fill in as well. It must have taken months to produce that. Well done to whoever built it. I always thought I was a bit of a whiz with spreadsheets until I saw the Property118 one.

Anyhow, the bottom line for me was that if me and the wife decide to sell up it will cost us around 900k in capital gains tax if we are still resident in the UK. However, that figure reduces to under 100k if we are living abroad.

I’m not sure yet whether I want to sell up, but if we do, paying an extra 800 grand or more for the sake of the privilege of living in crappy weather most of the time, in a Country where the roads are falling to bits along with the sanity of the politicians is a bit steep if you ask me!

The spreadsheet also told me what i had always thought, which is that my wife and i would be much better off being incorporated if we decide to hang onto our properties for the long term, even if we stay in the UK and draw 100% of the profits out of the business and pay the tax on the dividends. It would cost us around 20k to make the transition ‘all in’, but I’d make that back in tax savings the first year or so.

Then I read the article a few days ago about no tax on dividends if we live in Portugal. Now that really was an eye opener. I’d be even better off doing that whether we decide to sell, incorporate or do a bit of both. So that’s it, decision made, sod it, I’m off and hopefully the Mrs will come with me!

I’ve booked a consultation with Mark Alexander just to sanity check all my figures and I’ve booked two weeks in the Algarve for me and the Mrs in October to have a good look around. I just can’t see the of point remaining in the UK.

I’m building a list of things we are going to have to deal with like post, property management, what to do with our house, health insurance and such like, so if you can think of anything else to add to my list please let me know.

Good luck you you all, regardless of whether you decide to Bremain or Brexit yourselves.

All the best

Phil



Comments

Rob Crawford

13:44 PM, 17th August 2018
About 2 years ago

Apparently investment property prices in Portugal and Spain are forecast to increase!! Move fast if your going!!

Appalled Landlord

14:20 PM, 17th August 2018
About 2 years ago

Hi Phil
There's a lot of info here: https://www.gov.uk/guidance/living-in-portugal

Whiteskifreak Surrey

14:55 PM, 17th August 2018
About 2 years ago

I wonder what will happen after Brexit, especially if it is a no-deal one? What will be tax consequences for Non-EU citizen residing in the EU? What about agreements limiting double taxation (or whatever it is called)? As residents of a third country - what will be their rights to actually own assets there? We already have dual nationality and would consider living in our native EU country, but even now the taxation laws are so complicated that you can visit a number of specialist lawyers / accountants and get several different advices. Just a thought.

Monty Bodkin

15:12 PM, 17th August 2018
About 2 years ago

The UK already has double taxation treaties with most countries, in the EU or not;

https://www.gov.uk/government/collections/tax-treaties

Mark Alexander

15:24 PM, 17th August 2018
About 2 years ago

Reply to the comment left by Whiteskifreak Surrey at 17/08/2018 - 14:55
Brexshit is not an issue in this particular set of circumstances , see the linked to the HMRC website posted earlier by Appalled Landlord.

user_17131

15:49 PM, 17th August 2018
About 2 years ago

Obfuscated Data

Appalled Landlord

15:50 PM, 17th August 2018
About 2 years ago

Reply to the comment left by Whiteskifreak Surrey at 17/08/2018 - 14:55
After Brexit, British citizens will be treated in the EU like other non-EU foreigners.

I’m no expert, but it seems to me that as you also have the nationality of another EU country then Brexit will not affect you in this way.

Christopher Marsden

18:45 PM, 18th August 2018
About 2 years ago

Hi, just to come from another angle, I am sitting writing this from the west Algarve. And don't get me wrong some parts of Portugal are lovely. We have owned this place for 14 years and lived here (but did not take up residency) for 4 years. Just remember that you need to be able to settle and live in these places. It's not always easy to up sticks and things like health ( seen lots of couples sell up and go back to uk because of their health), language, winter rains, summer fires, councils, laws, etc etc. Plus the wrench of family and now grandchildren is difficult. Building standards are generally lower than uk, We had difficult time with builders and just for an extension and pool took 2 years for permissions and first builder was a crook. we were lucky and found a good lawyer. F... Knows what brexit will bring but take your time. Property market is rising now and apparently Lisbon is in a bubble.
Be careful if you buy its not like the UK
Money and tax isn't everything I'm not sure you can live your life based on taxation.
Good luck

Jay James

18:50 PM, 18th August 2018
About 2 years ago

Reply to the comment left by Appalled Landlord at 17/08/2018 - 15:50"After Brexit, British citizens will be treated in the EU like other non-EU foreigners" - to my knowledge, this is undecided. (Unlike EU nationals being here for which our Government seems to have promised they will retain a lot of thier rights)

Mark Alexander

18:50 PM, 18th August 2018
About 2 years ago

Reply to the comment left by Christopher Marsden at 18/08/2018 - 18:45
Hi Chris

What’s been the attraction for you to live in the Algarve for the last 14 years then, taxation aside?

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