buy to let tax implications for expat?

[ExpatQuestions]

Very long - sorry and thank you for bothering to read!!!

There is a strong possibility that we may be moving abroad to work later this year, and renting a property in our new country. It will not be an permanent emigration as such -just an international job move, although it will be a permanent job, not a contract.

Now then - what do you think of my plan - and what are the flaws I'm not seeing?

We are thinking of selling our house in the UK and using some/most of the equity to buy one (or possibly two) smaller cheaper houses (either outright or with a small mortgage on one of them - maybe 30%-50% of the value.)

The idea would be that my son will live in one of them whilst at university, and sub-let the other rooms to friends, and a second house (if we can stretch to that) would be wholly let, either to students or just a normal let.

When we come home in July/August the student house would be vacated, and we would have somewhere to stay without having to pay out for hotels or impose on relatives, plus we'd keep a foothold on the property ladder here in case we needed to return in a hurry.

If we do not own, or live in, another 'main residence' in the UK do we have to pay any tax on the rental income, and what are the capital gains implications on the second house? Presumably if we returned and lived in one or other as our main residence for a length of time it would not be subject to CGT should we sell it?

If one house was in my name, and one in my husband's could we argue that both are main residences? Who is to say we do or do not live together in a few years time?

Also, re: tax, my DH is currently a higher rate tax payer but we will be going to a country where his earnings are tax free. I am a SAHM so I earn nothing anyway, and would therefore have full allwances on anything I 'earn'. Right? Wrong?

Would the rental profit even be classed as earning under these circumstances?

Is there any benefit in putting one house in our children's names? Can we just gift them an equal share of one of them? (I'm guessing the purchase price would be about £200k.)

Sorry for so many questions! The benefit of your collective wisdom and expertise is gratefully received. Ta xx

I am a very regular name changer BTW - just not ready to broadcast this possible move yet, plus it would out me in RL.

Even if a property is your main residence you have to pay tax on the rental income you only get tax relief on the capital gains on sale of the property. I believe as a married couple you can only have one property as your main home, you can only split properties when you are not married.

As for splitting the tax and gifting to your children I think you are getting into specialist tax territory here and it would probably worth paying for some advice to get it right. My parents have gifted company shares to me of a not dis-similar value and it had to be marked down over a certain amount of years and they have to live a certain amount of years beyond the last year to make it tax free. There were special letters draw up stating this to make the tax position clear.