Hi all
Basically, before I start, I have spoken to accountants and solicitors who think I am frankly absurd and my proposal is something that is unheard of following which I have decided to not to go with this route, given changing landscape of BTL I wanted to ascertain how absurd my fellow forum dwellers think of this idea and maybe can share their thoughts on why this was a bad idea.
My parents and 2 other partners have a BTL with equal shares as tenants in common (25% each). So there are 4 owners of the BTL in total.
The 2 partners want to sell their shares and I wanted to buy there shares (at market value) in an SPV limited company that I would set up and loan money to. As long as my parents are alive they do not want to get a mortgage on this property.
The purchase is going to be a cash transaction in which at the end the ownership would have been:
Tenants in common:
Mother (25%)
Father (25%)
SPV Limited company (50%)
With a declaration of trust setting out shares
After death, they will leave shares to me/limited company (and I will leave the limited company to them if I die) which would be done by a deed of variation if required.
FAQs
Solicitors/Accountant thoughts:
Basically, before I start, I have spoken to accountants and solicitors who think I am frankly absurd and my proposal is something that is unheard of following which I have decided to not to go with this route, given changing landscape of BTL I wanted to ascertain how absurd my fellow forum dwellers think of this idea and maybe can share their thoughts on why this was a bad idea.
My parents and 2 other partners have a BTL with equal shares as tenants in common (25% each). So there are 4 owners of the BTL in total.
The 2 partners want to sell their shares and I wanted to buy there shares (at market value) in an SPV limited company that I would set up and loan money to. As long as my parents are alive they do not want to get a mortgage on this property.
The purchase is going to be a cash transaction in which at the end the ownership would have been:
Tenants in common:
Mother (25%)
Father (25%)
SPV Limited company (50%)
With a declaration of trust setting out shares
After death, they will leave shares to me/limited company (and I will leave the limited company to them if I die) which would be done by a deed of variation if required.
FAQs
- They don’t want to sell shares to limited company as they would face high CGT bill.
- I am a higher rate tax payer and would like to in the future purchase more BTL’s and expand portfolio
- They’ll never be a mortgage on the property until it is all in the company either through purchasing their shares while they are alive or following probate.
Solicitors/Accountant thoughts:
- They have never seen this happen and its odd
- How will you sort the rental income be sorted between individuals and company
- HMRC may not like this
Comment