Family Investment Company v Discretionary Trust for Property
Discussion
Hello I was wondering if anyone could give me any advise apart from go back to the accountant.
I'm in a fortunate position where I have a number of property's free from mortgage. I am 58, and my wife is 50. Pension of £145.00 month. Don't know what to spend it on lol.
3 Kids.- 21yr just finishing university (probably will do another year conversion.). 23 yr just bought own house with boyfriend. Getting married this year both teachers. 26 yr hard working not a permanent job though. Owns 4 BTL with his friend. Living at home.
Accountant advised me to set up a Discretionary Trust.. As I understand (could be wrong) I can move in up £650,000 of property's and leave them there 7 years. Any income is taxed at 45%. Remaining income can be distributed to 3 kids - tax return filled in at year end and any difference between their tax rate assume 20% the difference can be reclaimed beck and diverted back to the property account set up in their name.
Effectively only paying £25% tax on rental income. Have I got that right ? . This way the Trustees - me and the wife still own the property's and it keeps them safe within the family in the future. ? and not letting any future estranged partners get their hands on them.
Now I've just been on google and read about setting up a Family Investment Company you move the property's over. There is a potential capital gains - however using both our annual allowance and around our area prices still not moved significantly upwards since 2008 should be ok not to have any capital gain tax. Obviously we would be limited to moving 1 each year.
Don't really know what our personal / and the company's tax liabilities would be, and which scheme would be best suited for us. Was looking at moving over 3 property's at this stage,
At this stage would like to keep the property income to ourselves if possible, Apologise for any spelling or bad grammar.
Any advice would be very much appreciated.
Regards
Mark
I'm in a fortunate position where I have a number of property's free from mortgage. I am 58, and my wife is 50. Pension of £145.00 month. Don't know what to spend it on lol.
3 Kids.- 21yr just finishing university (probably will do another year conversion.). 23 yr just bought own house with boyfriend. Getting married this year both teachers. 26 yr hard working not a permanent job though. Owns 4 BTL with his friend. Living at home.
Accountant advised me to set up a Discretionary Trust.. As I understand (could be wrong) I can move in up £650,000 of property's and leave them there 7 years. Any income is taxed at 45%. Remaining income can be distributed to 3 kids - tax return filled in at year end and any difference between their tax rate assume 20% the difference can be reclaimed beck and diverted back to the property account set up in their name.
Effectively only paying £25% tax on rental income. Have I got that right ? . This way the Trustees - me and the wife still own the property's and it keeps them safe within the family in the future. ? and not letting any future estranged partners get their hands on them.
Now I've just been on google and read about setting up a Family Investment Company you move the property's over. There is a potential capital gains - however using both our annual allowance and around our area prices still not moved significantly upwards since 2008 should be ok not to have any capital gain tax. Obviously we would be limited to moving 1 each year.
Don't really know what our personal / and the company's tax liabilities would be, and which scheme would be best suited for us. Was looking at moving over 3 property's at this stage,
At this stage would like to keep the property income to ourselves if possible, Apologise for any spelling or bad grammar.
Any advice would be very much appreciated.
Regards
Mark
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