we own currently 3 properties (1 to her and 2 to me)and hope in the not too distant future to rent them out while we cruise ( we may have a 4th property by that time).....that been the case what is the most beneficial way to 'own' these properties?
we have no 'special' financial circumstance nor very wealthy and will use the rental income to finance our cruise and supplement any other income. With this in mind should we just keep them in private ownership or manoeuvre them into a holding company(ies)?
I remember reading some time ago of some idea where each of us would re mortgage them to an offshore company that the other owned and so could reduce tax paid on income because of the repayments or some such like?
Don't want to do anything illegal though open to debate about some thing possibly 'immoral' !
any ideas please?
Excuse the double posting with the lounge forum!
Results 1 to 5 of 5
06-05-12, 14:23 #1Registered User
Location : Humber
- Join Date
- Dec 2001
Form of property ownership for rental?
06-05-12, 15:19 #2
With 4 properties how much profit do you expect to make? You get the best part of £20k in allowances, 10% of the rent for depreciation if furnished. After costs, the fees and costs of setting up companies etc., could be more than the tax saved.
Do some sums, find out some costs, and think long and hard.
I went through all this about 6 years ago with a few more properties, and it didn't seem worth changing from sole proprietor.Narrowboating From Stretford!!
08-05-12, 13:17 #3Registered User
Location : TURKEY
- Join Date
- Mar 2004
Houses and Rents
We are in a similar position. We have multiple properties. Some owned jointly others solely by my wife and I. We looked into setting up a company and came to the conclusion that it was not worth while not with the number of rental properties we own.
If you do your own tax returns its easy and make sure you claim your individual tax free allowance. When I retire in about a year or so I have calculated that we will have sufficient income even allowing for agents fees, tax, all those other costs and for two of the houses to be unoccupied at any one time. I do not feel that property is the best investment vehicle at the moment to produce income as you/we will remain cash rich but income poor if that makes sense, however at the moment there is little better on offer. We can always sell a house every three or four years and it will keep us going for the next thirty years or so.
08-05-12, 15:43 #4Registered User
Location : Back in UK
- Join Date
- Jul 2006
Bear in mind that if you rent property then when you come to sell it you will be subject to capital gains tax dependant on how long it has been rented. From memory if you live in the property for two years after your return then no CGT is payable. Difficult to do with four properties. Worth checking with HMRC.
We were away for six and a half years and got not resident after four years. We had two properties, one had been rented for about 20 years and one for six and half years. To avoid CGT we sold them before we returned.
08-05-12, 17:36 #5Registered User
- Join Date
- Sep 2004
There is an undefined period of occupancy before sale which exempts you from the last three years CGT. Apart from that, it's due for the whole period of ownership apart from any other periods you occupied.