buying a home/offshore mortgage - tax advantages?

Hi,

We want to buy a home here, but are concerned about the tax implications... Now we can deduct out living expenses including rent... do you loose that benefit if you buy? We only plan to be here 3 or 4 years so we are right on the break even point for buying. Someone told me: if you buy you are basically saying you are not temporary, so you lose the living expense deduction... Once you leave, could you retroactively take the tax credit???

We currently have offshore (isle of Man) checking/savings accounts. Any income left off shore and not spent in the UK is not taxed. I have heard you can get an off shore mortgage so that the money you pay to mortgage is not payed into the UK and therefore is not taxed... can anyone confirm this???

Thanks, Oski

You are confusing US and UK taxes.

1. US -  The housing deduction for rent disappears if you stop paying rent.  However as most folks have loads of excess foreign tax credits this usually makes not a penny of tax difference.

2. UK - You could only deduct the living expenses for a maximum of the first 24 months so I guess this is not what you are thinking of?

3. US - You get to take foreign tax credits anyhow each year so nothing retropective is relevant.

4. UK - NOR relief might be reinstated retroctively if you SELL the house and leave the UK within THREE years of your first arrival.  Again I don't think this is what is in your mind?

5. US - Mortgage interest relief is deductible whether the mortgage is onshore or offshore.

6. UK - For those with non-UK unremittable income offshore mortgages still work a treat!

7. US - Don't forget that gains on sales of residences and repayment of foreign currency mortgaqes are taxable in the US.

Do take good advice here!