21:46 PM, 26th May 2014, About 10 years ago 10
My wife and I have been considering starting with BTL for quite some time with the aim of building a small portfolio to supplement / provide an income when we retire. We are in our late 40’s, and for most of my working life I have worked for firms that do not provide a company pension scheme – and we want to provide for our retirement before it’s too late.
For various reasons have never dipped our toes in the water – and part of me thinks we may have left starting too late (property prices have never been more expensive) … but then again, when really is the right time to start?
We are looking for capital growth over time rather than immediate cash flow (yield?). Is it true that, on average, property prices double every 10 years?
We have been given opposing advice regarding how we structure our BTL “business”. On the one hand, we’ve been told we should buy and let the properties in our own names and not use a limited company. We’ve been told that getting finance, tax benefits, etc. are better as individuals.
On the other hand, we’d like to have something to leave our children without the taxman taking the majority of it in inheritance tax. It’s been suggested that we structure our BTL business through a limited company. We would obviously still have to stand as guarantors for the mortgages, etc., but as we retire we could continue to collect an income / dividends as directors or “letting managers”. It was also suggested that we could include our children as shareholders, increasing their percentage as we got older, so that when the inevitable happened, our children would continue to own the company and its assets.
However, we were also told that if we started as individuals and then changed to a limited company later on (or vice versa), it would be difficult and expensive to restructure the debts / mortgages, and any tax implications.
We would appreciate knowing the opinions of those of you who have been in the same position, and also the advice from any professionals.
Thanks in advance for any advice you can give us.
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