Best way forward even though one size does not fit all?

by Readers Question

11:40 AM, 22nd May 2017
About A year ago

Best way forward even though one size does not fit all?

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Best way forward even though one size does not fit all?

Dear Mark

I have heard you say on a number of occasions that incorporation is not a one size fits all solution and may not always be the answer to every individuals C24 tax problem. Whilst my question may seem to be only applicable to our own circumstances. I am sure it would also apply to many others who are in a similar position.

My wife and I, who are both in our early sixties, have been running our portfolio of sixty houses, which includes some HMO’s as our sole source of income for many years. 90% of the portfolio is owned in our joint names with 5 or 6 of the properties owned individually, collectively they are worth about 5.5 million, with borrowings of 1.9.

Our two adult sons also work with us on a full time basis for which obviously they are paid. We do not have a partnership UTR and currently all pay our own individual tax liabilities.

In the long term incorporation would seem to be our best way forward particularly with regards to reducing CGT and inheritance tax. In the meantime as our total net profits are in the region of £180,000, which could be split 4 ways, would there be an advantage for us to remain unincorporated for the time being. Is it possible for us to obtain a partnership UTR that would cover the four of us, making our eventual incorporation via a BICT smoother.

Also am I correct that as all of the income would be profits from investments would we all, including our sons, be allowed to make a saving by not having to pay class 4 NI on our income up until incorporation?

Kind regards

Peter

 



Comments

Mark Alexander

11:51 AM, 22nd May 2017
About A year ago

Dear Peter

The fact that you do not have a partnership UTR does not mean that you are not a partnership.

See the partnership Act 1890 from which I quote the legislation as follows directly from the .gov website ...

"Partnership is the relation which subsists between persons carrying on a business in common with a view of profit."

Reference link >>> http://www.legislation.gov.uk/ukpga/Vict/53-54/39/section/1

I believe you are already a partnership and would be content to assist you to obtain non-statutory clearance for incorporation reliefs to mitigage CGT and Stamp Duty exemptions on the basis that all fees would be refunded if HMRC decline clearance.

Please see further details via the link below.

https://www.property118.com/fees-refunded-hmrc-non-statutory-clearance-request/98558/

Also see our latest 10 minute video via this link >>> https://www.property118.com/landlord-incorporation-explained-video-interview-ranjan-bhattacharya/98856/

Thereafter, please book a private consultation with me.
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