Deed of trust on US holiday let?

Deed of trust on US holiday let?

15:42 PM, 1st August 2022, About 2 weeks ago 3

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Hello everyone, My wife and I jointly own a holiday let in the USA. We have a small US Dollar mortgage but finance costs have risen sharply which looks set to continue with the Fed currently increasing interest rates on a monthly basis.

My wife earns around £7000 pa and I earn in excess of £50000 putting me in the UK high rate tax bracket. As I am unable to fully offset my share of finance cost due to Section 24 mortgage interest relief restrictions and my high rate income I was wondering if we could use a beneficial deed of trust to maximise tax efficiency?

We have already done this for a UK rental property.

Many thanks

KSD1137



Comments

Mark Alexander - Founder of Property118 View Profile

16:05 PM, 1st August 2022, About 2 weeks ago

Finance Costs on furnished holiday let’s do continue to be fully eligible for finance cost relief.

They are regarded as a separate BUSINESS

Mark Alexander - Founder of Property118 View Profile

16:07 PM, 1st August 2022, About 2 weeks ago

PS - I don’t know whether beneficial interest is even recognized in the USA anyway. Even if it is, you would need to seek advice from a US CPA and a US Attorney because British Law will not apply

CMS View Profile

3:15 AM, 7th August 2022, About 7 days ago

Following on from Mark's comments, i had to look into a similar situation for someone recently. Like here the USA do. i believe, acknowledge there is an equitable and legal title to property but their Trust deeds are very different to here so, as Mark suggests, you will need a US attorney,

Also you need to keep in mind that in the US attorney's qualify by state so you would need to seek advice from an attorney in the same state as the property...not that i can think of a reason why you wouldnt! Best, Charles

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