BTL for my Baby

westy22

You are not really listening to the advice you've been given, are you?

You can't register a property in the name of a minor (under 18 in England, under 16 in Scotland) and you can't obtain a mortgage in the name of a minor, either with or without guarantors. A Trust cannot obtain a mortgage unless backed by assets and even if it could the Trust would be liable to tax on the rental income anyway.

I have no doubt that you can make good profits by buying a property at the right price and letting it out at a fair market rent, but you can't do it through your baby to avoid tax.

Thrugelmir

MARTYM8` wrote: »

Buying a buy to let for your baby?:eek: I suppose it just shows how our obsession with property as the sole way to invest for the future has got way out of control.

Reminds of the famous quote by Sir John Templeton.

""Bull-markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria."

Right time of the year to grow Tulips as well.

macman

If this was legit, then don't you think many people with the capital to spare would have already done it?

phillsmit3

The idea is not to avoid tax. The idea is to provide for my daughter and give her a head start as the possibility of her never owning due to rising property prices is very real. I already have a junior isa for her but it seems a little pointless at the moment as I think I could do better with a btl in my own name and transfer to her when she reaches 18 Or whenever I see fit. I was asking if there is any more tax efficient ways of doing it. As I think the btl route would be better even when taking into account income tax and cgt

enthusiasticsaver

You would have to buy the property in your name and transfer it over when she reaches 18 or after. This could be treated as a personal equity transfer which is free of inheritance tax if you live a further 7 years providing that option was still available then. I do not think Capital Gains Tax would apply here.


Incidentally why do you assume she will never own a property without this convoluted way of a btl? Both my daughters in their twenties have bought properties in the last year with our help.








Incidentally this poses another question in that is it wise to hand a large expensive asset to a young adult (which at 18 she would be) without her learning the hard way that to save for her future requires some dedication and sacrifice rather than Dad just handing it over? We helped our daughters by giving them half the deposit and they saved the rest and the fees. I realise if you live in London this is a significant amount (we are in the West Country which is slightly cheaper) but maybe it might be a good idea to wait until she reaches adulthood and seeing what she wants then. She might decide to sell it and travel the world or buy a flash car when you have transferred it over so what would your view on that be?

le_loup

redmalc wrote: »

BTL could be an issue after next Thursday if RED ED gets in,he will be setting the rental you can charge,a dictator may I say

Hi Red Malc,
Been reading the Mail on Sunday or have you always been a sucker?
Have a look at Germany, as a small example of rent control or even the UK where it seemed to work very well from 1915 until Darling Maggie abolished it - no shortage of landlords making a fair return during that time.

phillsmit3

Totally understand what you are saying but if I put 10k in an jisa our daughter she would get it at 16/18. If I had a btl I could keep it until I believe she is responsible. Maybe Could be a wedding gift etc. She could spend the jisa irresponsibly so the same goes for both investments. But I could have paid the mortgage off by the time she is 25 and would be great for her.

phillsmit3

Maybe the answer is to make my own investments and help her out when and if required. It just seems a nice thing to save for her future.

macman

le_loup wrote: »

Hi Red Malc,
Been reading the Mail on Sunday or have you always been a sucker?
Have a look at Germany, as a small example of rent control or even the UK where it seemed to work very well from 1915 until Darling Maggie abolished it - no shortage of landlords making a fair return during that time.

Rent control is common in many US cities, including such hotbeds of communism as New York City, LA, and Washington.

jimjames

phillsmit3 wrote: »

With a low deposit and getting the property at the correct price I've been able to double my initial investment amount in 5 years. I'm very confident I can out perform any isa with the correct property and using leverage. You can instantly make thousands just by buying the correct property at the right price. Yes it does take much more effort but nothing comes for free

I recon with an initial 10k investment and a little input here and there at the age of 18 the equity in the btl would be at least 60k

It's not really comparing like with like.

If I'd geared up and invested in the stock market 5 years ago I'd be sitting on a fortune too.

Gearing can work both ways though. Anyone who thinks that property is a one way bet obviously has forgotten the period 1989-2000

phillsmit3 wrote: »

Maybe the answer is to make my own investments and help her out when and if required. It just seems a nice thing to save for her future.

If you invest in a S&S ISA in your name then you can choose exactly when she gets it. No different to buying a property.