The Wilsons - 875 buy to let property empire

PasturesNew

brit1234 wrote: »

Their website has been suspended as well,

http://www.wilson-property.co.uk

You get this message

So if they can't even fund their website they must be in bad financial do do.

From the home page of that website, it starts by saying:

"Judith Wilson's extraordinary success began when she and her husband Fergus scraped together enough cash to buy a second home in order to let. Property followed property and she now has a portfolio of 465 rental houses across the South East of England. The Wilsons have given up their jobs (both were teachers), own a string of racehorses and are having a luxury five bedroom house built for them in the Kent countryside.

At a time previously when interest rates had been cut, Mrs Wilson spent £6.9million on property in one afternoon. The business has been built on buying homes that have both soared in value and proved easy to let.

Mrs Wilson started speculating in 1987 when property prices were much lower. Two of her first purchases, semi-detached houses in Maidstone, Kent, are now worth £500,000 each. She paid just £50,000 apiece. To spot bargains, Mrs Wilson studied the social make-up of her target areas and kept a watch on house price inflation and interest rates. She bought many of her homes ‘off-plan’ and by the time they were actually built the properties had doubled in value. She used the equity in her existing houses to secure mortgages for further purchase. Within five years of her first purchase she had made enough money to give up teaching for good.
The Wilsons now own entire estates of homes in Kent. Their ten racehorses are stabled with leading trainer Martin Pipe and competed in the Cheltenham Gold Cup earlier this month. But this new-found wealth has not gone to their heads, insists Mr Wilson. He says they live ‘modestly – like former maths teachers’. The have sold several homes at a massive profit but have no plans to cash in their business and are preparing to expand still further. "

beingjdc

It may have been suspended because a number of wags who shall remain nameless made a complaint that their address was not on their domain registration - they had claimed, wait for this, an exemption from providing that information on the basis that it was the personal website of a non-trading individual!!! (I don't often use multiple exclamation marks, but this deserves it).

PasturesNew

Can anybody guesstimate their CGT obligations?

They can't just sell a few. It all gets very very complex when you think it through. Which to sell, how many, are they occupied, what's the CGT/fees to sell. Will there be any money left - or will that one mean they have to sell another one to pay the CGT ... and will that snowball.

Do they have to sell at least half to stand a chance of meeting their tax obligations?

brit1234

Its far too late if they sell now, huge gearing is their downfall.

Trollfever

Why is their Ltd. Co. shown as dormant?

Name & Registered Office:
JWIPB LIMITED
50 HALL FARM DRIVE
TWICKENHAM
TW2 7PQ
Company No. 05928877

Status: Active
Date of Incorporation: 08/09/2006

Country of Origin: United Kingdom
Company Type: Private Limited Company
Nature of Business (SIC(03)):
7032 - Manage real estate, fee or contract
Accounting Reference Date: 30/09
Last Accounts Made Up To: 30/09/2007 (DORMANT)
Next Accounts Due: 31/07/2009
Last Return Made Up To: 08/09/2007
Next Return Due: 06/10/2008
Last Members List: 08/09/2007

Dithering_Dad

PasturesNew wrote: »

Can anybody guesstimate their CGT obligations?

They can't just sell a few. It all gets very very complex when you think it through. Which to sell, how many, are they occupied, what's the CGT/fees to sell. Will there be any money left - or will that one mean they have to sell another one to pay the CGT ... and will that snowball.

Do they have to sell at least half to stand a chance of meeting their tax obligations?

If they're running their companies within a limited company framework, which I think they are, they won't be liable for Capital Gains Tax. If they're not trading as a limited company then they might qualify for Entrepreneurs' relief, which is payable at 10% rather than the standard 18%.

If they're in a limited company then they will pay Corporation Tax on company profits. I'm not sure whether the sale of some houses will be classed as a profit if they use the gains to pay down the mortgages on their remaining properties.

dopester

Trollfever wrote: »

Why is their Ltd. Co. shown as dormant?

That company might just be the vehicle for the stupid double-your-money-every-7-years-bond.

Even with stupid lending policies over the last 5 to 10 years, I still find it difficult to believe you could just set up a company with all risks passed to that in default - where lenders have little recourse, without being hit by higher costs for the funding for that extra risk when it comes to tens, hundreds of millions of pounds.

Although it might be so. Some reports have suggested foreign money/banks/structure in those more serious mortgage fraud cases.

However, looking at one form I presume MEW-ers use, there might be requirements in place for personal guarantees when lending to limited companies as a standard practice (hopefully - but I don't know much about personal guarantees other than I hope they are enforceable and stringent). Form seems to be from 2007 before worst effects of credit-crunch, as they still refer to the magic of securitization.

Below are a few sections from a Mortgage Express form URL="http://www.mortgage-express.co.uk/pdf/BTLLTDcofurtherborrowing.pdf"]pdf[/URL.

This application form can be used for Buy-to-Let drawdowns and further borrowing due to improved equity. The form is applicable for Buy-to-Lets in the name of individuals or a limited company.

Limited company Buy-to-Let with guarantees requires a new personal guarantee from each director to cover the new total mortgage amount. (Before any monies are released, Mortgage Express must be in receipt of personal guarantees for the new loan amount from each director)

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP
UP REPAYMENTS ON YOUR MORTGAGE.

mewbie_2

Quote:
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP
UP REPAYMENTS ON YOUR MORTGAGE.

There should be an extra clause nowadays.

Quote:
YOUR BANK MAY BE REPOSSESSED IF YOU DO NOT KEEP
UP REPAYMENTS ON YOUR MORTGAGE.

Generali

PasturesNew wrote: »

Can anybody guesstimate their CGT obligations?

They can't just sell a few. It all gets very very complex when you think it through. Which to sell, how many, are they occupied, what's the CGT/fees to sell. Will there be any money left - or will that one mean they have to sell another one to pay the CGT ... and will that snowball.

Do they have to sell at least half to stand a chance of meeting their tax obligations?

AIUI, they hold their properties in a Limited company. That means that if they sell the property they don't pay CGT as they haven't made a capital gain, the company has.

The company will pay Corporation tax on any profits and they will pay income tax or dividend tax on the money they take from the company depending on whether they take the money out as a salary or a dividend. If/when they wind the company up they'd be liable for CGT.

I'm pretty sure that's how it works.

The biggest problem they face is selling houses in an area where they have been pretty much the only buyers. As they were prepared to outbid everyone else in the past they are almost guaranteed to cause house prices to fall by even selling one house as the top payer is no longer looking to buy! Trying to unwind a property portfolio like that will be very difficult.

I suspect they are about to learn a lesson in the price to be paid for operating in an illiquid market and markets aren't much less liquid thaan the UK housing market at the best of times let alone now.

Gorgeous_George

I don't see what th problem is IF they bought properties that they could let at a profit.

By all means they could sell a few - but only those that are difficult to let at a profit (assuming they are not also difficult to sell).

GG