Colin McNulty

Registered with Property118.com
Wednesday 14th August 2013


Latest Comments

Total Number of Property118 Comments: 157

Colin McNulty

14:58 PM, 19th November 2019
About 2 weeks ago

Bare Trust as IHT mitigation tool?

Reply to the comment left by Iain at 19/11/2019 - 07:11
Thanks Iain, you are of course correct. I realised my folly whilst out walking the dog, which of course was to presume that at 4am and only 1 cup of coffee down was the right time to be thinking about such things! ;)... Read More

Colin McNulty

4:46 AM, 19th November 2019
About 3 weeks ago

Bare Trust as IHT mitigation tool?

Reply to the comment left by Darren Peters at 16/11/2019 - 12:21Deliberately vague post (see disclaimer at the end). There might be another way Darren, depending on the attitude to risk and the particular circumstances.
As per your example, an interest only mortgage is taken out, sized deliberately to reduce residual value of the estate and resultant IHT to the level covered by the applicable allowances. Qualified professional tax advice would be needed here.
However instead of blowing that mortgage money on bingo, the cash is invested in as safe a way as possible, whilst attempting to provide an income which services the monthly mortgage interest. This would be tricky I realise and quite likely to not cover the whole interest payment, and any shortfall would have to be made up from other income.
Then on the FIRST death, assuming nothing has changed wrt IHT levels and allowances, nor the estate's value, no IHT is payable and the mortgage can simply be repaid from the capital that remains (assuming the investment vehicle chosen has not fallen in value of course).
This approach would have to be carefully weighed against the insurance route already mentioned, in terms of risk vs monthly cost.
I'm making many assumptions here, not least of which is what the motivations are; e.g. I'm assuming the intention is to allow the 2nd client to remain in the property without having to sell the house to pay any IHT due. Other motivations (revealed during a proper fact find) may drive a different approach.
Disclaimer: The above is not personalised financial advice but an example of a possible approach that could be explored after a proper fact find was carried out by one of our suitably qualified and regulated brokers.... Read More

Colin McNulty

14:42 PM, 6th July 2019
About 5 months ago

A case of communication, cooperation and compliance

It used to be the case that the tenant's approval was necessary for an APA, and they could stall the whole process by simply refusing to answer DWP's request for approval, but that's no longer true.

Re repairs stopping payment of the rent, the gov's detailed guidance on APA's doesn't mention that as a possibility. See:

https://www.gov.uk/government/publications/universal-credit-and-rented-housing--2/alternative-payment-arrangements

and

https://www.gov.uk/government/publications/universal-credit-and-rented-housing--2/universal-credit-and-rented-housing-guide-for-landlords... Read More

Colin McNulty

14:15 PM, 9th April 2019
About 8 months ago

5k charged for Right to Consolidate?

Fair enough Ian, I'll agree your plan is certainly less risky from the perspective of MX. But risk is a value judgement and we don't have all the information necessary to make an informed opinion as to the balance of risk. Specifically we don't understand Rav's risk profile, nor know what he needs that money for that he's prepared to not sell that property at the thought of going without it, presumably to sell a different one instead?

You could argue it would be even less risky to not sell any of the MX properties at all, until he can sell them all simultaneously. But again, we don't have the necessary information to make such a suggestion.

It's always tricky giving opinions on what someone should do based on short posts on internet forums, we just don't have the full facts to hand, something only Rav's mortgage broker will have.

Besides everything in life is a risk, as the 70,000 people who get hospitalised each year for falling out of bed would no doubt attest to! :D... Read More

Colin McNulty

12:36 PM, 9th April 2019
About 8 months ago

5k charged for Right to Consolidate?

Yes it's true that MX have acquired that reputation, however I can only comment on the information to hand. They appear to be being reasonable here as they are not enforcing their Right to Consolidate in its entirety, and there's been no mention of any misdemeanours.... Read More