Hi Chris and Ian,
I am puzzling over this and am hoping one or both of you could shed some light to this: Should we re-mortgage (borrow against) our UK property to pay off our NZ debt on our Family Trust.
Cashflow wise it makes sense:
Our UK property is making a profit. We could re-mortgage and have the rental income cover the increased mortgage and expenses. Currently we are paying tax to the NZ IRD on the profit from the UK property. If we re-mortgaged we would be paying less tax as we would be making less profit.
Bringing the money across we can pay off a chunk of our NZ mortgage held by our Family Trust. Then we could start paying off a table loan mortgage with the current repayment amounts to our interest only loan.
Is there anything we need to be aware of with bringing the money over from the UK - eg. flutuations from foreign exchange ? I was told that the interest on the additional sum of money could not be tax deductable on the UK rental income. This I do not understand - am hoping you could shed some light? Thanks in advance.