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  • Section 24 HQ

    Swapping property for shares?

    Has anyone considered selling their portolio of properties for shares in say warren buffets berkshire hathaway?

    I know properties can be swapped for shares in a reit in a tax efficient way but the reit in question has not been around long enough to tempt me but what about move abroad say to Portugal, rebase all properties to 2015 by becoming a non uk resident, then sell. CGT will be seriously reduced. Then with the cash buy Berkshire Hathaway shares.

    Just imagine all that passive income without the hassle.I could spend the rest of my life travelling the world instead of wasting it thinking about s.24.

    Is this a good idea?

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    I suspect you would get a very different answer to that question on a stock market forum compared to a property forum.

    I suppose it really all comes down to the return you believe you are likely to receive over, say, a 10 year period from the shares, compared to property. Both options can have an income element and a CGT element. Shares are more liquid, at least for large stocks. CGT on equities is lower than on property. You can raise money on properties, but usually not on the equities (unless leveraged buying through spreadbets for instance).


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    If your starting out I think people will prefer property because of gearing.

    But what if your not really out to make money but you want to protect what you have.

    I suppose a mixture of the 2 might be a good result.

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    If you are out to protect what you have, then what's the old adage, never put all your eggs in one basket? You could invest the proceeds into lots of different asset classes, lots of different shares, a few different properties/types, bonds, gold etc etc.

    All comes down to an individuals attitude to risk, what they are looking to achieve etc. Just trying to provoke your thoughts, I am not qualified to give advice in this arena, and my comments above should not be taken as such.


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    Hi Brian,

    Very interesting question!

    I’d agree with Neil that if you asked this on a different type of forum you would probably get a different answer. Neil also makes a great point that it comes down to the return you believe you are likely to get.

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    I would be interested to know what you mean by tax efficient way. Most people won’t sell their property due to large capital gains.

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    Chartered Accountant, Tax Advisor and Mortgage broker

    (and BTL portfolio owner)

    stuart@johnsonsca.com

    02039077022


    With a REIT you can exchange your property for shares without suffering cgt if you qualify for s.162 hold over relief.

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    Berkshire Hathaway doesn’t pay dividends does it?

    So you’d loose the monthly “cash in your bank” safety of your property from rent, and risk a higher value of shares when you come to sell them in X years. What if the shares drop 2 weeks before you were going to cash out? X years wasted

    The only risk with property is if the value of the property drops. But even then - you’ve had X years of rent.

    its a tough one - im also looking into the same idea — but I want shares that pay dividends. A 3% yearly dividend would make me consider shares.

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    Plenty of blue chips out there paying 3% or more - e.g. water companies

    Div yield on Severn trent is 4.25%

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    DISCLAIMER just my personal opinion - for legal advice consult a qualified professional grown-up.

    A good alternative to Berkshire Hathaway might be the SP500 index fund.

    I plan to hold the shares indefinitely so the ups and downs of the price becomes less relevant.

    SP 500 index gives around a 7% return after adjusting for inflation on average.

    The  buddhists say "Anything that costs you your peace is too expensive.  Let it go" This is where shares are better than property and time on this earth is limited.

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    How would you buy these shares people? Would you buy them yourself online - or go and see an advisor and buy them through a company?

    I’m not knocking shares - as it’s something I’m looking into - but let’s say you were going to buy £30k of shares (Same as a deposit)

    A property would make you £2,400 a year (before tax and expenses)

    if you could get 7% on shares - that would be amazing - about as good as a property with no hassle.

    But 4% - that would only be about £900 a year?

    That doesn’t seem a good return for £30k?

    Are my numbers correct?

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