Posted to Germany. Own my own property, advice needed!

Discussion in 'Army Pay, Claims & JPA' started by fusdavetucker, Jan 21, 2011.

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  1. I'm posted to Germany in March which is great news. I'm sure there are loads of people who are in the same position as me, so any advice would be greatly appreciated!

    I own my own property and I've decided to put it on to the rental market. My first query is regarding tax. Will I need to register with HM Revenue and Customs that I will be an overseas landlord? I have been given conflicting answers from different letting agents, some saying I do, and others saying I do not as I am in the Army.

    My second question is to do with allowances! Great timing I know. Are there any allowances in place that you can claim to aid in returning to the property during your overseas posting, or anything else I can be taking advantage of?

    Finally, will I be able to bang in an MMA claim for my journey over to Germany?

    I'd as a clerk at work but I'm at a training battalion and their always in high demand.

    Thanks in advance.
  2. Cant help you with the allowances part of the question but the house I can. As an overseas landlord you have two options:

    1. Register as an overseas landlord and claim tax relief (advisable if you are out of the country for more than 6 months) or;
    2. Dont register and continue to pay tax

    Obviously option 1 would be more lucrative for you when it comes to tax returns, a good financial advisor would be a good thing to look for also as a landlord you will be able to claim for certain things against purchases for the house. The rental agent should provide you with all the paperwork for the Revenue & customs. Depending on your location you may wish to choose a local firm or you could try Marble Property Services as they do a deal with Forces personnel via Forces Property Direct (They may also do the same for you) worth a try.
  3. You can register with HMRC as a Non-Resident Landlord. If you don't, the letting agent will be required to withhold a portion of the rent that they would normally pay in order to pay your tax bill. You are still required to fill out a self assessment form and pay the tax. The only difference is whether you letting agent takes it off you each month or whether you pay your tax bill at the end of the financial year. Being in BFG doesn't mean that you are exempt from paying the tax on the unearned income from you property if you let it.
  4. Might be an idea to take out additional landlord's insurance. I would also say to prepare yourself to have to re-decorate the whole house, replace all the carpets/curtains and gut the garden when you return. We were lucky when we let our house, other people I know weren't.
  5. P_T is spot on with the landlord insurance. The majority of tenants in my place have been no problems at all, but one set did a runner owing three months rent, and having left dog shit tramped into the carpet. There is still an excess to pay, usually one month rent, but I got the majority of the rent and the cleanup costs covered, as well as changing the locks etc.

    Its galling most of the time to be handing over cash to a letting agent for what is bugger all most of the time, but it situations like this they are useful.
  6. Some really great advice,

    Its the first time I've been in this position, and in my naivety I probably would of overlooked all the important stuff. It's hard enough coming to terms with having to let it out full stop, so insurance is something I certainly wont be skimping on. I hate the thought of people coming in and treating the place like a giant bouncy castle, but better to let and have somewhere to come back to in the long term.

    Many thanks for taking the time to reply.
  7. My property was let out for 14 years while I was overseas - advice below is based on that experience.

    Get yourself a decent accountant to manage your money - shouldn't cost more than c £250 pa. Get yourself a reputable local letting agent - go local as the big buggers couldn't give a fcuk about what happens to the property as long as they get the monthly fee (I went with a big London one originally and really got shafted; the next one I used was a small, local affair - very good). When your place is let out, get the agent to deal direct with your accountant - saves misunderstandings.

    If you let it furnished, don't leave anything valuable in it - tenants can be amazingly clumsy. And leave just basic but serviceable furniture.

    Take the accountant's advice on insurance and any other financial matters, especially tax - they know best. And do NOT become personally involved with any tenant - contact, if any, should always be made through the agent.

    Hope this is of help. :pirat:
  8. Also don't expect march out standards of cleanliness when you get it back. View the property before your missus and sell her the idea that it's an opportunity to do a complete makeover. Less tears!
  9. Absolutely correct - however good your agent, you will find all sorts of things which need to be fixed when you eventually re-occupy. So save your funds while you're away - they'll disappear super-quick when you return to the UK, anyway, so use them for something useful!

    Points I forgot earlier: instruct your agent to go for a "family" let rather than a "shared" one - families take more care. And make sure you get insurance for the building and for the contents.

    I think that's all for now - I may think of more later ........
  10. If you own on a mortgage, you will need to let your lender know. Forces families renting out their main home for a posting is a well-trodden path and should be unproblematic. You do not need to convert to "buy-to-let".
  11. Knew there'd be something else - thanks, vampangua!

    Also, if you are lucky enough to be extended beyond 3 or 4 years in Germany, you may find that your mortgage lender will want to up your mortgage rate a bit, thereby increasing your repayments. Their view would be that you are making a profit (hopefully) by renting out a property you bought with their financial help. This is quite fair as all they want is a small cut of your profits. (In the unlikely event that you do not make a profit in this way, tell the lender!)
  12. private_army

    Any chance you can expand on that last sentence? I've been in BFG for the last 7 years & have paid tax each year after completing a tax return. Thanks.

  13. I have done this renting palava on a few properties whilst serving, my advise is not to get emotionally attached to the 'Home' we made a decision after the 1st house that we would never live in the property again - it worked for us only to keep a foothold in the market. Please take heed of all guidance given above because once the Taxman has got you by the balls it is difficult to shake them off!

    Good luck in Germany!
  14. Also dont think that by taking a deposit for damage you will be safe. The new Tenant Deposit Scheme rules are very much in favour of the tenant in this respect. For example, our tenant cut a whole out of the bedroom carpet for a tv cable. We got 15 quid damages for it! Its designed to stop dodgy landlords from keeping all the deposit but it doesnt help people like us. More info here Tenant Deposit Schemes (TDS): A Beginner's Guide
  15. Steiner,

    apologies; that was me being a complete knob and not proof-reading! Should read 'doesn't mean' NOT 'does mean'. I've edited the original post.

    As an aside, I believe the only tax break you can get is that HMRC recognise the fact that the only reason your buy-to-let is not your main residence is because you are serving, so you don't have to pay as much capital gains tax. I've haven't confirmed this myself, as I'm still a few years away from selling the place (or indeed, making any profit on which CGT would need to be paid...)