Should I sell or risk tenants buying at undervalue price?9:08 AM, 25th September 2019
About 4 weeks ago 48
Are you looking for another landlord to form a partnership with for tax planning purposes?
We regularly speak to landlords who would be far better off from a tax perspective by incorporating their business. However, they are single, have less than 10 properties and don’t know who to go into partnership with. Therefore, HMRC do not recognise them as a business for the purpose of claiming incorporation relief to roll capital gains into shares at the point of incorporation and they do not qualify for the special treatment afforded to partnerships for SDLT when they incorporate either.
Naturally, one of the first things we ask people who are in this position is whether they have any close friends or relatives who are in the same predicament.
Unfortunately, many do not!
However, if two or more landlords form a business partnership and run their property portfolio as a business they may well qualify for both incorporation relief and the special SDLT treatment for partnerships after an initial three year period. They could then ‘wash-out’ their capital gains to that point and run their business in a lower tax environment which isn’t affected by restrictions on finance cost relief.
Does this mean there is a business opportunity for matchmaking? When I mentioned this idea to our Hon. Legal Counsel he jokingly suggested “Tinder-For Landlords”.
So, how big is this opportunity and how could Property118 go about facilitating such an introduction service?
That’s about as far as we have got with the concept so we are looking for ideas.
If you have any suggestions please post them in the comments section below.
Similarly, if you are a landlord looking for a partner, please feel free to use the comments section to tell other Property118 members a bit about yourself and if anybody responds showing an interest we will do our best to introduce you to each other.
Thanks in advance.
All the best
Mark Alexander – founder of Property118 “The Landlords Union”
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