Buying a holiday let

[slithytove]

I don't know if this is in the right section, but I need some advice please.

My parents do not live in the uk. They have retired outwith the uk and visit for a couple of months a year.

They want to buy a place for them to stay in when they visit. However, they wish to rent it out as a holiday place when they are not here so it washes it's face. They would only need to let it for 2/3 months to achieve this.

They do not want any ties to the uk property wise.

Can they put the property in their grandsons name? What are the implications? Will this affect him if he one day wants to buy a house? He is an infant.

Can any income from the property be put in his name in the same way? They want to start building up a fund for him and thought this would be a good way to do it - as I understand he will avoid income tax under £10k?

What are the tax rules on a holiday let? Do they have to be declared if under the threshold? What makes it classed as a holiday let?

Any and all advice would be very welcome.

Thanks in advance.

They haven't taken on the retiring mindset, I thought I had made that clear? They have just 'retired' from the job my dad did for 35 years.

They are currently undertaking a lot of building work which is very tough and stressful and contributing to my mums feelings. When it's over, they will have a substantial income, and be able to move back to the country they used to live in, where they will work, where they have friends etc. I am hopeful and almost certain this will change my mums mindset.

I don't think there are discrepancies in my posts other than where I have found out more information from my parents, and discounted thoughts and ideas based on research I've been given.

They have retired early to put into place their massive retirement plans. In retiring at this age, dad could take redundancy and his lump sum pension. He did very, very well. Given 2 years, their plans will be active and money won't be an issue.

Until then, they are living off a smaller pension, and the btl income once the mortgage has been paid. I believe they told me the penalty was around 5% of the total loan. Which is enormous.

I moved back for uni at 18, but still classed our home abroad as my home until I left uni. At that point I was in a long term relationship and just desperate to work - so I took a job here. Only then would I say that I was based in the uk. They had no idea where I would end up. I'm married to a child of expats too which will affect our future. Siblings have just finished uni and their immediate futures are up in the air.

I don't think it's reasonable for parents to choose where they will live based on kids, they can't forward plan for that especially as they don't know where we will live, there is more than one of us, they didn't know who would be producing GC etc. Retirement plans were set in motion well before GC were!

And once more, before doing a thing they will go back to the person who has advised them all these years on being non dom and non res. But when they mention to me putting a property in my sons name or in trust - I will do what research I can. I do not need to pay for a solicitor which I cant afford, to discount the idea thanks to some kind and helpful posters on here.

when you said this, I assumed you meant they were embracing total retirement.

yet mum has been happy for 10 years now living abroad without her kids. It is only since they retired it has become an issue. A common thing in retirement I suspect and luckily for them, temporary.

ah well..

It's all complicated. I thought you said your dad and mum owned a business but now you say your dad can 'take redundancy' which means he's an employee and will have a company pension. Is it enforced redundancy or retirement that is on the cards?

sorry- I know you can't tell people everything but I am TOTALLY confused about the building work going on which will produce an income, but it's not in the country where they live, but your dad will be made redundant and get a lump sum, then they will move back where they came from ( but not the UK) and your dad will them work again..............arghhhhhhh!

Just too complicated by half for me :)

Nope, hence the comment about it being temporary. They are essentially setting up a business.

Dad took redundancy and cashed in his pension from the job he has done for 35+ years. He is classed as retired. That has already happened. I said "could take" meaning "was able to".

They intend to run/own a business in their retirement. Which is the set up and building now, miserable but temporary.

If you like, the uk is their birth country, country a which they left decades ago. They have ties here in respects of us kids and GC, but nothing else really.

The country they have lived and worked in as expats, where they have residency, is country b. They will be returning there once their retirement project is completed. Would be working again, but not in the same capacity as before (big career).

The country they are in now, country c, is temporary, they are setting up a business and it is very difficult currently. But it won't be forever. The business will be run by someone whom they are in the process of employing, and they will visit.

But honestly, all of this is irrelevant really to my mum wanting to own a place near me.

And yes, it is insanely complicated!

Sacbina...I and others have given constructive informed advice throughout which in my case extended to recommending building in lifestyle considerations ....what has been frustrating and exasperating is the that OP is drip-feeding, ill informed and keeps changing the story as well as repeating the same things that have been already been addressed by PP.

A few posts back she was talking about an existing "family home" in the UK which was not subject to CGT - my suggestion was to sell this and buy another "family home" with the beneficial cgt near to where she lives which was the main goal - I said this would not impact their non-dom status -- but then she tell us it is in fact a BTL with a substantial mortgage and a critical revenue stream....

deepest - your posts may have been informed from whatever knowledge it is you have, but I found them to be rude to the OP and her family. it was unnecessary.

I'm not drip feeding! How on earth could I have given all this information in my first post? Plus I've gone back to my parents as and when to find out stuff.

It is our family home, or was. When they remortgaged throughout the years, they changed it to a btl. The two aren't mutually exclusive. Neither is having a home with a substantial mortgage. Yes it could be sold, there is loads of equity, but they don't want to. Regardless of your opinion.

And yes, temporarily they are relying on that income. Hardly unusual.

And I will repeat myself when pp keep repeating themselves. I can't count the amount of times I've had to say that they don't want to rent, or don't want to break the law, or will be taking legal advice IF they choose to proceed, etc.

And as for calling me ill informed - well, pot kettle black there. I am giving the information I can. And I can hardly be expected to know that when asking about a prospective trust for DGC, I need to give details of emotions, retirement plans, pensions, redundancies etc.

Sacbina - thanks for your support.

And they can only maintain non dom status if there is no home available to them. I think for a consecutive 91 days. So they can own the flat because it's rented out. But even if they sold it and bought up north, if they lived in it, it would certainly domicile them here. So I'm not sure you are as informed as you think you are.

slithy

I think you are confusing residency (which is - broadly speaking - staying in the UK for more than 91 days) and domicile, which is pretty permanent. They appear to have changed domicile from the UK to country B, and, whilst owninga home in the UK could potentially mean they re-domiciled in the UK, it is not as simple as that and they can own a UK property which they stay in without breaking domicile of country B. This is where the HMRC rules I linked earlier are useful. All they need to show is they have permenantly settled overseas, and spending a couple of months a year in retirement visiting the GC would not necessarily hinder this.

they can only maintain non dom status if there is no home available to them. I think for a consecutive 91 days.

So if they bought their own holiday cottage, or bought one that they owned and wasn't let out for most of the year, this would be construed as their property.

Are you sure that you or another relative owning a property which they store their stuff in wouldn't also be construed as them having a home available? Especially if they regularly stay in it for a few months a year?

If they want to invest in something for you/GC then that's one thing.

If they truly want somewhere that will definitely be available for them to stay in and store their stuff in then that sounds like "their home" to me.

I don't imagine that a rented storage facility could count as a "home" and neither could a series of different holiday cottages. But it does sound like having the use of your holiday cottage (even if it was originally bought with your money, not theirs) could easily look like "their home".

Yeah it was from those rules - they don't want to flout any of them, and having somewhere available for them for 91 days would do that.

Again, thanks for the link, it has been very informative and useful, if no touch hard going!

The same would apply if it was our property yes. But I would not make my home available to them for that long! Although they stay with me and have stuff stored here, they have proof of flights going back some 5 years that they have never been here that long, and Hmrc would struggle to prove that my home was available to them for that time. My husband would certainly make it clear that it's not!

The difference would have been we would have made sure any property in whoevers name was not available for that stretch of time. But that would necessitate making it available for rent for x amount of months, which is a lot of hassle.

It looks right now as though it is not viable. Which is absolutely fine.

They actually have a couple of storage facilities here, but they have to pay a fee to open them and are some distance away.

Easier for them to keep their few boxes of bits more accessible at mine.