Has anyone had experience investing in the U.K??
I am interested in buying an investment property over there while our dollar is so strong.
I know a loan can be secured with a 40% deposit at better rates (not as good as a few years back though) than Australia but have also read they are expected to continue rising.
I am interested in the tax benefits/disadvantages of owning property over there i.e can I negative gear on a shortfall of a U.K investment on my Aussie income??
I know the U.S seems to be the flavour of the year but our dollar is equally as strong against the pound-surely that alone would present some good opportunities??
Look forward to your thoughts….I'm interested in exactly the same questions and intend to speak to an Australian tax accountant with UK experience over the next couple of weeks. I was in the UK a couple of months ago and met with a tax accountant there. His knowledge proved sketchy but the key point I learned is that there is a significantly different tax treatment if you buy a property with a 'buy to let' intention than if you buy with a 'holiday let' intention. Holiday let is much better if you are in this for capital growth.
I did look at this 8 years ago when I emigrated and at the time the implications were just scary – the ATO would want an annual valuation and would tax on this even though no material gain was realised.
A close friend with 5 lettings properties in Nottingham (50 people in total rent from him) who is also an accountant has just fixed his interest rate on 50% of his loan as he expects rates to rise at some point in 2011.
Thats interesting Barry as I have heard of the ‘buy to let’ but not of ‘holiday let’ intention, however my research is only just beginning.
I guess another big factor is if British financial institutions will allow the use of realised equity on capital gains to refinance for further investments as they do here in Australia-I can’t imagine any different.
My partner is visiting her family in Wales next month and will do a little more research on financing investments over there and will be sure to explore the holiday let intention you mentioned-thank you.
I will also look forward to any information you discover or contacts you make that are savvy with investing Australians investing in the U.K.
As I mentioned in my previous post that negative gearing on my Aussie income is a major factor on my decision to invest there and it is likely only an Aussie accountant will know the possibility and benefits and/or disadvantages of this.
I was working in the U.K during the GFC and couldn’t believe when I heard interest rates were like 0.5% over there but I sent my money home and bought in Australia.
It would be nice to send it back the other way now our dollar is strong but rates have risen and look to continue to rise so as your friend has done-fixing would seem a smart approach.
Anyhow, all the best with your quest for information…..I look forward to hearing how you go:)
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