Pension or property

robs1

Member
should have bought the industrial buildings via your pension maybe ?
They were already existing ones and there an uplift clause in favour of cousins that complicated it but I wanted to do it that way so I could get my kids to put some of their pensions into it. Was going to cost me a lot up front to get everything sorted properly and for others benefit over mine, when I snuff it they will sell the whole farm for development as we get loads of offers but I dont want to sell as I like it here and dont want to expand at my age
 

thesilentone

Member
NFFN Member
Location
Cumbria
@thesilentone So what’s the EPC rating of your improved cottage?

That sounds like a very good price to do your improvements, but then you had the time to manage the project yourself.

Every situation is different. In our case the cottages are 100yr old 2up 2downs with a mean 1up/1down extension added to each in the 50s. The extension has a cavity wall, is freezing (4outside walls upstairs) but I’d be loath to pump in cavity insulation as I’ve already had issues with water leaking through in places it simply should not be able to! I doing fancy doing external insulation; apart from our cottages ending up looking like a dogs breakfast (they have architectural flourishes which would be tricky to insulate externally), I’d worry whether post-grenfell the method would be queried in the future. I’d have to go for internal insulation ‘box within a box’ style. Unfortunately this would make the houses less liveable as the already mean spaces inside (kitchen and living room ) would be further squeezed.

Id probably have to tear down and rebuild the extensions more generously, as the build quality is suspect and they have the usual flat-roof ball-aches.

You get to the stage where it’s pointless starting anything unless you are prepared to do EVERYTHING. Roof slates might as well come off to felt underneath, solid floors dug up to add insulation and so on, move bathroom upstairs to make the place nicer to live in. My guesstimate to do all that is 100-150K, but I’m optimistic so it may well be more, especially if there are nasty surprises along the way.

If I get it up to a C, I could charge more rent obviously but I doubt I’d make back the outlay in my lifetime. Also I’ve heard rumours of EPC being ratcheted up further in future.

If you can comply with the ever changing regulations in the rental market then crack on. In my case I don’t think it’s worth it- too many known known, known unknowns and unknown unknowns! Eg if politics returned to the hard left, I’d fear tenants being given the right to buy their house at a reduced market price- I’d never want the houses on the farm to be owned by someone other than the landowner!

Id recommend anyone thinking of getting into BTLs to lurk in a landlord forum; Landlordzone was VERY helpful to me while I was evicting my very awkward tenants.
This may sound dodgy, however.

There are grants to update and insulate old properties, mainly managed by local Councils. However the amount you receive can vary from zero to virtually everything done for nothing. In the latter case, the tenant must be on some sort of benefit, the more benefits, the less they pay for work required.

It is to insulate ALL internal outside facing walls and if the building is old enough (no cavity), this will mean lining inside walls, as we did. The grant also includes re-decorating.

Sadly, we carried out our work years ago when no such thing existed.

I'm not suggesting you pay someone on benefits to come and live in your houses :devil:.(as I'm sure many others will)

I'm just making you aware.
 

Highland Mule

Member
Livestock Farmer
Pensions and investment isa taking a it of a pounding ATM. Money looks safer in bricks and mortar,6% return on rent
Why would I want an income? I invest to get an increase in capital and a future income for when I’m retired, not something I’ll have to pay tax on this year or next.

But yes, stocks and shares have had a purple patch - but not as bad as many think.
 

Highland Mule

Member
Livestock Farmer
How do you get around capital gains? I can’t make property investments stack up as a +40% tax payer it just hammers any income, especially if it’s against a BTL mortgage….or am I missing something.
Either start a Ltd Co. or do it from inside a pension. Those are the only ways I can think that keep it tax efficient.
 

Rowland

Member
Either start a Ltd Co. or do it from inside a pension. Those are the only ways I can think that keep it tax efficient.
Anyone using property to start a Ltd company and use for tax advantages will need a decent sized portfolio. I tried this route a few years back but accountants looked into it,it wasn’t going to work and HMRC wouldn’t like it. Things might be different now .
Capital gains tax is on the difference between purchase price and what ever improvements/repairs . House bought for 100k plus purchase cost 3k plus new kitchen bathroom decorations carpets etc 27k total 130k
Sell 200 - gain obviously 70k , @12k allowance per owner husband and wife 24k
Do a dead transfer and include other family members say 2 sons that’s 48k of allowance
Making a total taxable gain of 22k
At the higher rate of 28% it’s about £4800 total tax to pay.
I’ve done this in the past ! Not all Solicitors will do it . Use to be legal 6 years ago not sure now can see why you cant still try it .
Tax avoidance.
 

thesilentone

Member
NFFN Member
Location
Cumbria
Anyone using property to start a Ltd company and use for tax advantages will need a decent sized portfolio. I tried this route a few years back but accountants looked into it,it wasn’t going to work and HMRC wouldn’t like it. Things might be different now .
Capital gains tax is on the difference between purchase price and what ever improvements/repairs . House bought for 100k plus purchase cost 3k plus new kitchen bathroom decorations carpets etc 27k total 130k
Sell 200 - gain obviously 70k , @12k allowance per owner husband and wife 24k
Do a dead transfer and include other family members say 2 sons that’s 48k of allowance
Making a total taxable gain of 22k
At the higher rate of 28% it’s about £4800 total tax to pay.
I’ve done this in the past ! Not all Solicitors will do it . Use to be legal 6 years ago not sure now can see why you cant still try it .
Tax avoidance.
I would take care here:

Using joint allowances is only possible if everything is in joint names, and even then only a % is possible, not the full ammount.

You may have done it, that doesn't mean it's acceptable to HMRC.

HMRC can go back years, so don't be surprised if they catch you out.


...........and of course, you can only use your allowance once.
 

robs1

Member
I would take care here:

Using joint allowances is only possible if everything is in joint names, and even then only a % is possible, not the full ammount.

You may have done it, that doesn't mean it's acceptable to HMRC.

HMRC can go back years, so don't be surprised if they catch you out.


...........and of course, you can only use your allowance once.
Not quite true as long as you have a written agreement you can have what's known as beneficial owners who arent on the land registry,I did this when I sold a rented property a couple of years ago, just drew up a document transferring half of the beneficial ownership to my wife and submitted a copy to HMRC when I did the cgt form.I only learnt last year that you can only have four "registered " owners on land registry documents. I knew a scrap merchant years ago who bought property for cash but not in his name, he was the beneficial owner but not on any official documents, wouldnt get away with it now though as solicitors want proof of where you got the money from.
 

thesilentone

Member
NFFN Member
Location
Cumbria
Not quite true as long as you have a written agreement you can have what's known as beneficial owners who arent on the land registry,I did this when I sold a rented property a couple of years ago, just drew up a document transferring half of the beneficial ownership to my wife and submitted a copy to HMRC when I did the cgt form.I only learnt last year that you can only have four "registered " owners on land registry documents. I knew a scrap merchant years ago who bought property for cash but not in his name, he was the beneficial owner but not on any official documents, wouldnt get away with it now though as solicitors want proof of where you got the money from.
Can the ' beneficial owners document' also be used for income from the property ?
 

robs1

Member
Can the ' beneficial owners document' also be used for income from the property ?
Yes some of the rent went to my wife, in fact to avoid problems with HMRC it would have to go to all the beneficial owners in proportion of their ownership .i did a lot of research into this via HMRC, a big accountancy firm and a lot of time on the net, not one thing I found said you cant do this. It's a bit like share dealing in that often brokers etc have blocks of shares in their name to buy and sell but the money goes to individual share holders. Just makes the paperwork quicker and easier, iirc they call it nominated account holders or something.
I found out about it while reading about the Panama papers where the great and good hid their money behind shell companies etc
 

robs1

Member
It's quite handy to protect property from divorces etc as the beneficial owners cant sell property as they arent registered as the required signature at the land registry so you can give stuff to kids but they cant dispose of it without your agreement, obviously for IHT purposes in this case you need to pay them some rent
 

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Man fined £300 for bonfire-related waste offences

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Written by William Kellett from Agriland

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A man has pleaded guilty at Newtownards Magistrates’ Court to waste offences relating to a bonfire next to the electrical sub-station on the Circular Road in Newtownards, Co. Down.

Gareth Gill (51) of Abbot’s Walk, Newtownards pleaded guilty to two charges under the Waste and Contaminated Land (Northern Ireland) Order 1997, for which he was fined £150 each and ordered to pay a £15 offender’s levy

On June 25, 2018, PSNI officers went to Gill’s yard, where they found a large amount of waste consisting of scrap wood, pallets, carpet and underlay.

Discussion with Northern Ireland Environment Agency (NIEA) officers confirmed the site...
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