rental profits - how are they taxed in the UK

A

Arnaud

Longterm Registered User
Hi y'all,

France is getting so VOLL-KAK these days, that I am selling everything and re-investing in the UK, probably Scotland. Profitability seems attractive to say the least. I would be very proud to walk on Mr Cameron's "red carpet". Expect many others like me !

Is there a special tax for income from capital / real estate ? Or is that taxed like a normal income ? Does anyone have figures ?

Thanks very much in advance.
 
There is indeed some huge profits to be made in the UK residential letting game. I would suggest a few places better than Scotland - Yorkshire and parts of North Wales and the North West have the most attractive yields! Rental income is taxed as per standard income tax, possibly through a self assessment, you may wish to put it through a company (sole trader or limited). Capital gains tax then comes into play (at the end should you decide to sell (but not on commercial property!)) and or inheritance tax (should you fall into this bracket). Dependant on your situation there are loop holes which you can exploit ...pm me for further details if you wish.
 
1) UK won't necessarily include Scotland ! If Scottish parliament has it's way UK Tax legislation may well be irrelevant North f the border !

2) Find a good accountant ! Profit ? What profit ?

V :)
 
Thank you all for taking part !

Carl Dowd : good link, thanks !

lrmart1n : brilliant and encouraging post, I'll PM you shortly.

Visioneer : profit can't be worse than in France ! If Scottish Parliament has its way I'll be more afraid of them joining the Eurozone....
 
Arnaud, DO NOT discount Scotland, there is a massive Student population in Edinburgh, St Andrews, Glasgow, Dundee, Aberdeen and the Highlands. We're not Independent yet and it is doubtful at this stage we will be.

My Son is at EDI University, trust me mate you would not go far wrong in investing your money here in Scotland... The Whisky Industry? although barely owned by Scots or Brits these days? still the Major exporter in the UK... Aberdeen? the Capital of OIL and GAS in both the UK and Europe... Tourism, Golf and Adventure... a multi million pound industry and I suspect there is more but I haven't got time to go through it all. But, above all? The most beautiful country in the world and trust me I have climbed and operated in many... I don't think that at this time your choice to invest in Scotland will disappoint you!

Good luck...

CD
 
I have several properties in Edinburgh which are all managed by a letting agent. There is a big rental demand in Edinburgh and I have never had a problem getting new tenants.
Don't discount buying in less attractive areas as you are picking up a 2-3 bed place in the West of Edinburgh (Wester Hailes Murrayburn, Westburn) for around 70-90k with an asking price of 600 a month for a 3 bed. I know these places didn't have a great name a few years back but there is money to be made there.
One other thing I would look at is getting a flat in the city centre and renting it is a serviced apartment (there are managing companies that do that). When the Edinburgh Festival is on in August you can easily get £1000 a week minimum for a 2 bed place in the city centre.
 
I can see the appeal in letting an agency manage the letting to someone who lives in a different country, but for me this eats into profit. The student market has its disadvantages that every treats them like crap because they won't be there the next year and has 3 months where no rent will be coming in, however they keep coming every year and have no other choice. i am not saying 'get personal' about where you rent - it is to make money no live there yourself, but i have aimed at supplying to tenants who are not at the bottom of the social spectrum so I don't end up going to a house to where they have stopped paying to find all of the gas pipes have been taken out (I have experienced that - going with a landlord as security to a none paying household), although you always be exposed to some risk / odds wherever you choose. Visioneer - no profit, I have played very safe and am getting 15% - so after 14.5 years the houses have returned their original investment leaving £575 per month income per house which is just enough to keep the children below the tax threshold ;) £1150 a month and keeping the capital (which can appreciate / be indexed linked) ...do let us know what bank account is offering that tax free!
 
the north east is the best bet,its a buyers market,i've just bought a 3 bed semi in the country for 124k,you can pick up a decent house for anything from 30k to 80k here aswell
 
Thanks again everyone for your valuable inputs.

I will probably do a mix of Scotland (mostly Glasgow), and Northern England.

Biggest challenge is now to pull out of France without leaving too much behind...
 
Biggest challenge is now to pull out of France without leaving too much behind ...

Yeah, Dunkirk all over again.

Mates in southern England are buying rental properties in the n. england regions described but putting them in the hands of local agents for 'control', a no-effort investment if you will, at 50% of the capital expense of s. england. Don't buy south of Watford for sure, and university cities within 70 miles of London have artificially inflated property selling prices based purely upon the expected student harvest over, say, 15 - 18 years and are no reflection upon the quality of the property or its location.

Go north.
 
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