X

Sign Up

or

By signing up I agree to Property Tribes Terms and Conditions


Already a PT member? Log In

Sign Up

Sign Up With Facebook, Twitter, or Google

or


By signing up, I agree to Property Tribes Terms and Conditions


Already a PT member? Log In

Log In

or


Don't have an account? Sign Up

Forgot Password

To reset your password just enter the email address you registered with and we'll send you a link to access a new password.


Already a PT member? Log In

Don't have an account? Sign Up

  • Property-a-holics

    Help before I jump!

    I must remember that not everyone is in the South East like me! I started landlording in 2008 (it is a verb isn't it?) and I've just calculated that in the time since then our rents have gone up by 18%, even though they're now generally a bit below the going rate to help minimise voids. This has been helped by a steady programme of refurbs, but strategically this could be the way to go for the OP if funds are available across the next 5 years - it could mean increased income, but also increased property values which would help with the negative equity? Or am I seeing it all through 'South East eyes' again?

    Sorry, this reply crossed the OP's last post.
    0
    0
    Has anyone considered Incorporation Relief, which was mentioned in a reply from an MP to one of the landlords on P118? It appears to be the case that no CGT is payable on the transfer of assets into a company in exchange for shares - it's deferred until the shares are disposed of.

    https://www.gov.uk/incorporation-relief

    The next problem will be persuading lenders to transfer a personal mortgage to the company.
    0
    0

    Stockbrokers, Estate Agents, Bookmakers, Scrap Dealers and Gamblers are all cut-from the-same cloth. This week the Stockbrokers wishing to drum up business pressed the time to sell button, (by) lowering stock prices using some barmy excuse that the Chinese Economy was in free fall, afterwards these City gents (sic) ordered a dozen boxes of red chalk and new Bentleys - but - we'll let that go for now.

    What's important is property prices are going to collapse in a similar fashion. Property sales panic is going to commence, caused by word of mouth rumours that have been picked up in press reports headlined: Chinese Property buyers desert market.

    To value an house today you must deduct 50% of the asking price, and to view any purchase monies paid over and above this sum has key money. Fergus Wilson recently posted he was speaking to potential buyers, follow his example and head for the door marked exit. This downturn might last two years, maybe it might last three, and lets be honest the prices of property in London screamed out loud and clear property as an investment is doomed. £500 000 pounds for a grotty London terrace house reveals all.
    0
    0

    Dear Miaken,

    The important aspect to consider is that your rental “profits” will be a different value come 2020. Your profits are then taxed, with only a 20% relief for your mortgage interest.

    Looking at your figures, prior to the change, your rental profit was £82,000.

    Unfortunately, after these changes fully phase in come 2020, your profits will be £269,000, as you would have to add back the mortgage interest to arrive at your profit figure. You would be taxed on this £269,000, and then 20% mortgage interest relief would be available at the final stage of calculation.

    A company may be an option, but as with all these cases, there are a lot of considerations first of all, and would highly recommend you seek specialist bespoke advice on this area. Given that the properties were purchased 15 years ago, there is no doubt a capital gains consideration too, as transferring property to a company is in essence, a sale. With mortgages too, there could be stamp duty implications. The long term plans need to be factored in too, and whilst companies offer a lower rate of tax, there are tax implications on distributing these profits arising.

    With regards incorporation relief, I would recommend having a good read through the 2013 case of Ramsay Versus HMRC.

    Hope that helps and best wishes,

    RITA4Rent
    0
    0

    RITA4Rent (Rental Income Tax Advisors)

    Specialists in Landlord Taxation

    Recommended tax advisors of the Residential Landlords Association

    Follow us on Twitter @Rita4Rent

    clients (at) rita4rent (dot) co (dot) uk

    http://www.rita4rent.co.uk


    Its nice to see a real professional such as yourself bothering to help on forums like this.
    however your last comment wasn't very helpful,
    could you please give your professional opinion on the below,

    "With regards incorporation relief, I would recommend having a good read through the 2013 case of Ramsay Versus HMRC."

    As your opinion is what really counts, as you are the professional in this field who can help shape our knowledge, what do you believe its message is for us ?
    0
    0

    Hi Paul

    I am new to the forum and don't see a thank you button but I just want to say thanks for your full understanding and kind words.

    Maybe allowing us to convert to "a business" (which I genuinely thought I was) could be the answer... How many other "investments" involve meeting tenants, clearing flats after they leave, painting, dealing with agents, employing contractors, buying things from B&Q, merchants etc, how many other investments need hard wired smoke detectors, co2 detectors, landlord registration, legionnaires checks, pat testing, new washing machines etc etc........ Now that I know it is not a business maybe I will take the day off LOL

    Impossible to put all the flats into a ltd company as I would have to sell to the company who would need roughly £5 million liquid to buy them. When I started off and considered the company route I was told by most lenders that they couldn't do it this way. That way would have needed to be done by one bank and I didn't like the thought of them dictating everything hence going the individual bank and building society route. It has worked out well and I have had a good run.

    This will have an effect straight away as guys like me plan ahead. I have already asked my letting agents to start increasing my rents where possible, so the vulnerable tenant who can barely afford to eat loses! I have worked out who is in a three bed flat and only paying a two bed rate so they will now be asked to pay the full rate or leave; again, the tenant loses! I know it is all a bit previous but I am in survival mode and other serial landlords need to do the same.

    It is probably the governments plan, and a simple way to increase available housing to meet demand quickly. Not sure if it makes any sense, as the people that buy the flats after I have gone at auction (cash only) will most likely be less understanding and knowledgeable in my market It will be pensioners with newly released cash going into something that can be 24/7 and unpleasant at times or hedge funds from overseas who will see people as numbers only.

    A worrying unstable time indeed.
    0
    0