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I plan to retire in 5 years and I will still have 10 BTL mortgages of around £30k each (properties worth around £100k each).
The properties and mortgages are owned jointly with my wife.
I was thinking that I could maybe have my kids take over the mortgages in due course to 'pass the baton' on to them.
Does anyone see any issue with this ?
Do I have any other options ?
There will be CGT implications on the transfer from your joint names (you and your wife) to your children - it is not an exempt transaction as it would be from you to your wife. There is also the issue that the mortgage companies may not accept your children as being suitable to carry the loans, even at the low LTV you quote. Too much to consider to give a straight answer here except to say that it is a situation where good (paid for) advice from an IFA is needed.
Managing Director Hamilton Square Estates Ltd
Proprietor Wirral Property Group
Sourcing and renovating investment property since 1994
I can only comment in relation to the mortgages and as already stated, your children will need to go through a mortgage application process and meet lenders criteria.
You can contact me via Direct Message, or 07788 219647 or call the team on 01206 654444 for personalised quote and advice
I would also think a tax advisor might be needed too, if the properties were sold at say 40k each to kids, then there should be no stamp duty to pay and maybe no CGT also. It might count as a PET so as long as you or your wife would live for at least 7yrs then no tax to pay. I'm no tax expert so could be completely wrong!
regards Andrew Peers - property investor / sourcer - 07912674181
Property Redress Scheme Number 011436 NLA member 174404
This is interesting and I am sure you are not alone on what you need todo
this is where company formation has such merit
its so much easier to deal with
my most highly levarged properties will be sold to my company in the next 8 years as the old tracker mortgages end
as I age I will then have the option on what to do with the shares but the great thing is I don’t need to worry about the mortgages because they will be company mortgages
I wish I had done the company thing when I started it would have saved so much grief now with S24 alone
Learn Change and Adapt ?????
All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.