Benefits of creating a Ltd for my portfolio

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    #16
    But who would you sell the shares to?

    If you're going to want to borrow against the properties, you may need a company per property.
    Portfolio lending is more specialist and can be more expensive.
    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

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      #17
      Originally posted by jpkeates View Post
      But who would you sell the shares to?
      The company?! I’ve no idea! Still trying to understand it! #idiot

      I will find an accountant and go for a discussion. I feel having a Ltd in my position right now is probably not worth it; but in the future it will. If I don’t then at some point I’ll have over £2m worth of assets in my name and in the future would like my daughter and son to “inherit” the business. I don’t want to die with everything in my name and then my family have a massive tax bill.
      Having a Ltd also means I can pay my children a wage in the future too I think.

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        #18
        Originally posted by RedHitman View Post
        I’ve just spoken to a retired lawyer (a family friend) who is the director of multiple businesses and he said another way to do it would be for the company to “purchase” the assets (property) in exchange for shares in the company. So no money changes hands and thus no CGT would be due from me as an individual. Over time I can then cash out my shares, bit by bit to release the funds of the purchase and at that point I’d pay tax on the dividends/shares.
        Does that make sense?!
        Sometimes professional advice is nonsense too..... The above falls into that category.

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          #19
          Originally posted by RedHitman View Post
          I will find an accountant and go for a discussion. I feel having a Ltd in my position right now is probably not worth it; but in the future it will. If I don’t then at some point I’ll have over £2m worth of assets in my name and in the future would like my daughter and son to “inherit” the business. I don’t want to die with everything in my name and then my family have a massive tax bill.
          Having a Ltd also means I can pay my children a wage in the future too I think.
          Nice problem to have.

          I would talk to a family solicitor as well. There are a lot of different options available and you probably want a range of options, because which one is "right" will depend on income, current age and future intentions.

          Trusts are a useful option for minimising inheritance tax. But they need to be properly thought through, because things like wills need to be adjusted in parallel.

          Companies can serve a similar purpose, but shares in a company are part of your estate (and are taxed immediately, unlike property).
          So you can spend a lot of time moving stuff around to achieve the desired outcome.

          And planning for what happens when you die is made a lot more complicated by not being able (hopefully) to know when that will happen.
          By the time you get a firm date for your death, it's usually too late to do anything about the tax implications.

          Companies employing relatives can be a huge pain, because the moment your limited company becomes anything other than a mechanism for property investment it has to start considering things like workplace pensions, health and safety and the admin workload goes up a significant notch.
          When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
          Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

          Comment

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