Live aboard finances

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rolfbudd

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Hi All, we are going to live the dream and move aboard. We are both divorced and are in the lucky position of having a house each. We are going to rent them out while we travel so we have an income and also so we have somewhere to go back to if we don’t like it. How do those of who rent sort out tax and NI in the UK while you are away? Do you bother? Not sure I will ever come back to the UK to live, can you claim a UK pension if you are not resident? Been trying to get info from DWP but it’s a bit like pulling teeth and before I pay a financial adviser I thought I would ask the people who are already out there doing it.
Also can we live on 12k a year?
 
Lots of questions there and no simple answers. First thing is annual living costs - people live (couple) of £12k a year if you choose the right places and keep marina usage down. In general ongoing costs (food etc) are much the same across Europe, but what you eat may be different from "home". The big variables are boat maintenance and berthing and they depend on where you are and how much work you need to do on the boat.

It is not easy to become non resident, particularly if you own property in the UK, unless you become resident in another country, so people tend to remain officially resident and pay taxes etc in UK. Not difficult to rent out property as an absentee landlord and pay tax on your income. For NI you need to ensure you have paid the minimum yo qualify for your pension, which you can draw as soon as you are eligible. You do need to take advice on this and tax as rules are complicated and will vary according to individual circumstances. It can be worth keeping an appearance of still living in UK as otherwise you lose entitlement to all sorts of benefits, particularly healthcare.

If you are intending to leave and become resident elsewhere, how you arrange your affairs will depend on where you decide to live. Whatever you decide, don't leave things in limbo, so don't just sort out the everyday things but think long term and ensure that you know what will happen if you die - if only to save your beneficiaries hassle!
 
I'm not an expert but I do know exactly what my tax liabilities are for income from property and I do know that I will receive the full UK state pension, whatever that might be, when I'm 66 because I've fulfilled my lifetime NI obligation.

You must pay the appropriate tax on your UK income, including income from property. Remember also that if you do have a tax liability on any income from your property then you can offset any allowable expenses. In my simple mind that means that you pay tax only of your profits, not on the gross rental income. If you make a loss in a particular year then you can carry that forward to future years.

As for 'allowable' expenses, they are listed on the Government's income tax website and elsewhere. You might need to do a bit of research for yourself or take advice as to the definition of each of the allowable expenses.

You can submit your income tax returns on line. It really is quite straight forward. Just make sure you register and receive your PIN and any other paperwork before you depart UK shores. You need to keep your property accounts for 6 years, as I recall, during which time they can be called in for auditing. So you should maintain proper records.

I don't know a great deal about NI other than you need to have made full contributions for a minimum period (don't recall how many years but it's in the order of 34 years) if you are to receive the full pension. I'm sure it's all explained in the Government's website.

As I said, I'm no expert but I do hope this helps inform your research.
 
The only advice I can give to add to the others is , unless you have someone who can look after the houses then it would be best to go thought an agent , you will get charge up to 10 % but they will do every thing for you and deal with problems , and in that case because you are no longer living in the UK they as liable to remove the tax off your income and pay it to HMRC on your behalf .
 
sailaboutvic said:
The only advice I can give to add to the others is , unless you have someone who can look after the houses then it would be best to go thought an agent , you will get charge up to 10 % but they will do every thing for you and deal with problems , and in that case because you are no longer living in the UK they as liable to remove the tax off your income and pay it to HMRC on your behalf .
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+1 - it really does make it easier, we lived abroad for several years before casting off and were amazed how often friends had to fly home to sort out property issues costing more than the savings they thought they'd made by not having an agent - we have an arrangement with our agent that repairs under an agreed amount can be done from the rental income without consulting us first which saves time for trivial things like the dishwasher catch going.

I personally would also avoid renting to friends or family or having them as agents - we've seen lots of issues there too
 
It helps to have a Uk address (family or friend) for official purposes (bank, tax, medical, driving licence etc).
 
Try to maintain your UK resident status by being on the electoral role. Banks are very iffy about opening accounts for non-residents and these days savings often have to be moved annually to get the best rates. There are also residence rules about ISA savings and annual increases may not be added to state pensions if outside the EC. Friends who declared themselves non-resident have also had health treatment problems on returning after several years. I do on-line tax returns but we don't have any rental income to worry about, just pensions and savings interest. £12k can be enough to live on unless you're a marina dweller or, eat out a lot.
 
Thanks, we will have about 12k a year between us after mortgages etc. we prefer anchoring and small harbors to marinas so that will hopefully keep our costs down. As for the property rental income do you just register as being self employed?
I have some friends (3) that will be looking after the property for me and my partners family will be looking after hers, we are also going to use them for a mailing address, hadn't thought about the electoral roll, will look into that. Most of our savings will be ploughed in to the boat with some held back as a disaster fund and our income coming from rental on the property and banking done on line using postal address when needed. There is so much to sort out, beginning to wonder if we will ever escape.... what have i forgot???? :-)
 
Register with HMRC for online tax returns. You will need to complete the property income section annually. I suspect you will also have some interest which also needs declaring. Unless you intend to have income from self employment, there is no need to register as self employed.
 
rolfbudd said:
Thanks, we will have about 12k a year between us after mortgages etc. we prefer anchoring and small harbors to marinas so that will hopefully keep our costs down. As for the property rental income do you just register as being self employed?
I have some friends (3) that will be looking after the property for me and my partners family will be looking after hers, we are also going to use them for a mailing address, hadn't thought about the electoral roll, will look into that. Most of our savings will be ploughed in to the boat with some held back as a disaster fund and our income coming from rental on the property and banking done on line using postal address when needed. There is so much to sort out, beginning to wonder if we will ever escape.... what have i forgot???? :-)
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Look on the HMRC web site and search for Non Resident Landlord regarding the tax situation.
Keeping your address at a house rented to a tenant is a little dodgy. It can work for years, but may run into problems with the tenant paying the council tax and utility bills, as those are often used as proof of residence at the address.
12k per year will keep you out of marinas, so look for cruising grounds where there is still plenty of free and safe anchoring to be found.
 
rolfbudd said:
what have i forgot???? :-)
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Kit the boat out for hot weather, solar panels, large battery bank, LED lights, bimini etc. before leaving the UK, it's cheaper. Also, stock up well on spares, antifoul and any other consumables such as filters and nuts & bolts. Cosmetics, sunscreen and medication are also generally cheaper in the UK.
 
GrahamM376 said:
Kit the boat out for hot weather, solar panels, large battery bank, LED lights, bimini etc. before leaving the UK, it's cheaper. Also, stock up well on spares, antifoul and any other consumables such as filters and nuts & bolts. Cosmetics, sunscreen and medication are also generally cheaper in the UK.
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If you need to make some large capital purchases AND you can call in to Gibraltar but not stay there AND can wait until you are in Gib to receive them then you will be able to have them sent to Gib tax free. I'm told, but I have no first hand experience, that you can refit an old boat tax free on UK if you are leaving the EC but I don't know anyone who has achieved it other than on a new yacht. It might be worth making enquiries.
 
My advice is to cut as few ties as possible at this early stage.

If your partner's family are in agreement, get both of you on the electoral role, change your address with the DVLA, register with a local GP surgery, register with a dentist, have your mail re-directed to their address for at least a year (to enable you to sort out the wheat from the chaff), join the local library ........whatever it takes to ensure continuity.

As time progresses on your travels you will be able to refine all of this according to your needs.

Far better to make the effort now rather than try to jump back on the escalator in the future. Sailing off into the sunset, starry eyed, with the world as your oyster is a dream few can achieve - or at least maintain for long. Sooner or later reality will creep in and you may be glad of the rather boring safety net you created years earlier.
 
bjl said:
I'm told, but I have no first hand experience, that you can refit an old boat tax free on UK if you are leaving the EC but I don't know anyone who has achieved it other than on a new yacht. It might be worth making enquiries.
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As a general rule, no, unless you are a non resident and apply for exemption to have the work carried out and then exported. Still possible to buy a new boat tax free for export. Well established procedure through the dealer or builder, but also very restrictive and few people can take advantage of it.
 
If the income from the rental of your oases falls below the tax threshold the you can declare this to HMRC and get the gross income paid direct to you. I agree with recommendations above about an agent. Friends and family are fine until things go wrong; a good agent will resolve all this for you and cost a good deal less in the long run than flying back toUK to sort things out.
 
What ever you do, contrive to keep a UK address for the Banks etc. We didn't, lived out of the UK for nearly 20 years and had a lot of fun when we came back for few years with phone companies, utilities and banks.
Only the NHS and HMRC managed to cope, after a fashion.

Mostly because we were not in any database that they could access. Better a bad record than no record it seemed.
 
Your income from your houses, after all expenses have been deducted is likely to be well below your tax allowances of £9,400 each of you are entitled to. So would not try and become non tax resident as it is probably not worth the effort, just fill in the self assessment forms, which as others have said, can be done online.
 
Interestingly enough you can be non UK residents without being resident anywhere else. The question is really Is that a good idea? It all depends on your personal circumstances.

After many years non resident in the UK looks like it suits our circumstances to become UK residents next year. You need to get specialist professional advice, this will usually cost but IMO is worth the money.

I would strongly advise NOT to use family to manage proerty uunless they have experience of doing that. A good agency is worth the fees.
 
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