Buying property in the UK

My daughter is a UK citizen but has lived and worked in Switzerland for several years and is married to a Swiss national.

At present they rent their home in Switzerland.

They are considering buying a house in the UK which they would rent out.

My understanding is that they would have to pay tax in Switzerland on the rental income they receive from a property in the UK.

I have a number of questions:

Is it possible to get a mortgage in Switzerland for a property in the UK?

Could they claim tax relief on the mortgage interest for this house in Switzerland?

Any help or advice would be much appreciated.

Thank you

Alistair

Good day

Unfortunately, in most cases Swiss banks do not grant mortgages for real estate abroad. The reasons include a lack of collateral and other legal systems. 

One (although not probable) possibility might be to find a bank that has a branch both in Switzerland and in the corresponding country. Or then just look for a bank directly in the UK.

Best wishes

1. Is it possible to get a mortgage in Switzerland for a property in the UK?

No, Swiss banks do not accept mortgages for UK properties.

2. Could they claim tax relief on the mortgage interest for this house in Switzerland?

Yes. Interest paid for loans is tax-deductible in Switzerland for income tax purposes. This applies to loans from both Swiss and foreign lenders.

The mortgage principal itself can be deducted from taxable wealth for wealth tax purposes.

3. My understanding is that they would have to pay tax in Switzerland on the rental income they receive from a property in the UK.

Residents must declare all of their income, both local and foreign, to the Swiss tax office. However, Switzerland has a double-taxation agreement with the UK which should let them reclaim or deduct any taxes levied by the UK. Additionally, many costs related to the property and maintaining its value should be tax deductible.