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Discussion Starter #1
Its been a long time since I posted on here, but after 3 years we have finally sold our cottage in Scotland. STC.:fingerscrossed:

The long delay in selling changed our plans somewhat, as we originally intended to buy in Cyprus.
However we are now in the process of buying a smaller property here, to rent out, and renting long term in Cyprus.
I would like to know the pros and cons of this.
My husband will be on a full pension and I am on a reduced pension. How we would stand tax wise etc.
Any help and advice would be greatly appreciated.
Thanks in advance!

Pearsews.
 

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If you live abroad for 6 months or more a year you are classed as a non resident landlord by HMRC, you need to fill in the NRL1 form and post it to HMRC, if your application is approved the HMRC will inform your letting agent and no tax will be deducted from your rent.
You will need to declare your rental income in a self assessment tax return unless the HMRC tell you not to.
Your letting agent (if you are using one) should advise you.
You may also need to register as a Landlord depending on your local authority rules.

Good Luck :)
 

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Quite a lot of people here do a similar arrangement I believe.

Pros - the rent you receive will probably cover what you will pay for renting somewhere here, as long as the exchange rate is good
Renting here is generally deemed to be more sensible than buying at the moment
You can choose where you live and if it all goes a bit pear shaped for some reason you can move relatively easily.
There are plenty of rental properties to be had, and deals to be done


Cons - you will have to use a good rental agency in the uk and you will probably worry a little that all is going well with it. There may be gaps when you have no tenants
If you are used to living in an owned house I think it takes a while to get used to the fact that where you live isn't 'yours'. But you do in time

I'm not an expert on the tax implications, but if you are on the Cypriot tax system you will be liable for defence tax on your rental income, 3% I think. Not sure about the income tax side of it, maybe someone else will know
 

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Discussion Starter #4
If you live abroad for 6 months or more a year you are classed as a non resident landlord by HMRC, you need to fill in the NRL1 form and post it to HMRC, if your application is approved the HMRC will inform your letting agent and no tax will be deducted from your rent.
You will need to declare your rental income in a self assessment tax return unless the HMRC tell you not to.
Your letting agent (if you are using one) should advise you.
You may also need to register as a Landlord depending on your local authority rules.

Good Luck :)
Many thanks for your informative reply. and for the good luck wishes! Its been a long wait but hopefully we will be in Cyprus before too long.
 

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Discussion Starter #5
Quite a lot of people here do a similar arrangement I believe.

Pros - the rent you receive will probably cover what you will pay for renting somewhere here, as long as the exchange rate is good
Renting here is generally deemed to be more sensible than buying at the moment
You can choose where you live and if it all goes a bit pear shaped for some reason you can move relatively easily.
There are plenty of rental properties to be had, and deals to be done


Cons - you will have to use a good rental agency in the uk and you will probably worry a little that all is going well with it. There may be gaps when you have no tenants
If you are used to living in an owned house I think it takes a while to get used to the fact that where you live isn't 'yours'. But you do in time

I'm not an expert on the tax implications, but if you are on the Cypriot tax system you will be liable for defence tax on your rental income, 3% I think. Not sure about the income tax side of it, maybe someone else will know
Thank you very much for the information, and will enquire about using a rental agency. We would probably be on the Cyprus tax system so 3% seems very reasonable.

I have lived in Cyprus in rented property before, many moons ago, so am used to that! And as you say could easily swap property if it doesn't work out. Hopefully we will make it out there before too long!
 

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Best to get hold of one of the free guidance booklets on Cyprus Tax from someone like Deloitte or PCW . My 2014 tax submission shows UK rent is chargeable to Special Contribution at the rate of 3% on 75% of your share of the gross rent (no further deduction for costs, repairs etc), assuming the property is in you and your wifes names, for example. Interest received is charged at 30% and dividends at 30% for Special Contributions.

For Income Tax, the full amount of your share of the rent is included with your other income (National Pension etc, but not interest received or dividends, which are exempt). However, for deductions, you may include all your Special Contributions plus 20% of your share of the rental income (which means of course only 80% of your gross rental share counts for tax).
I hope this helps but you do need latest guidelines.
 

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Discussion Starter #7
Best to get hold of one of the free guidance booklets on Cyprus Tax from someone like Deloitte or PCW . My 2014 tax submission shows UK rent is chargeable to Special Contribution at the rate of 3% on 75% of your share of the gross rent (no further deduction for costs, repairs etc), assuming the property is in you and your wifes names, for example. Interest received is charged at 30% and dividends at 30% for Special Contributions.

For Income Tax, the full amount of your share of the rent is included with your other income (National Pension etc, but not interest received or dividends, which are exempt). However, for deductions, you may include all your Special Contributions plus 20% of your share of the rental income (which means of course only 80% of your gross rental share counts for tax).
I hope this helps but you do need latest guidelines.
Many thanks for that info Ben, will certainly get the guidance booklet you suggest. It is all a bit above me, but I'm sure hubby will be able to understand it all!
 
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