We are in the process of selling our main residence (4 bed house in South East) in the UK. We then head off to Eire for 6 months and then emigrate to Australia in January.
I am considering using some of our equity to purchase a smaller house in Telford with a small mortgage to rent out while we are away. The rest of our capital we would take to Australia to buy a property with a topup mortgage over there.
The intention of the rental property is to...
* Keep us on the property ladder as it will be probably a year from selling this house until we buy in Australia
* Give us an small income from property rental
* Try to keep us in touch with UK property prices should we decide to return to the UK at a later date.
Firstly, does anyone think that seems like a reasonable plan?
If so what are the tax implications with this arrangement?
Do we pay tax on the rental income in the UK or Australia?
If we sell the property at a later date can we argue that it is still our main residence and avoid CGT?
I am the main wage earner currently in the 40% tax bracket. My wife is in the 20% tax bracket (housewife but also secretary of my UK company).
All guidance greatly received.
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