Wise words for the HPC fans...

economic

GreatApe wrote: »

Agree with the ISA and pension wrappers going or being limited. Eg maybe limit ISA to £100,000 and pensions to £250k or even get rid of the pension savings of gross income altogether.

In the last GE labor had a proposal to greatly reduce the IHT nil rate band and it was hardly picked up in the media and another proposal for introducing the gifting exempt period to 20 years. That would have been horrific changes but hardly noticed by the media. Was 10x worse than the so called 'dementia tax'.

Forget all that the man is an outright communist
What is worse is that the UK is a rich country so he could make it work for some time.
There is a lot of wealth that can be stolen and distributed it isn't soviet Russia or China which had not built out its capital. He could indeed become a populist robin hood. There are 5 million rentals he could confiscate and give to his voters. There is some £3 trillion or so in UK companies he could distribute to 'the workers'. While long term it would be ruinous for the nation shirt term 5-10 years it could be popular. I'm not knowledgeable wbiigh to know if the UK laws and institutions could stand in his way perhaps even his own party will stand in his way which is why he willpurge the Blaireites.

have you thought about putting your properties in a company in order to reduce the tax burden? it may make sense if you have more then 1 or 2.

capital gains tax is probably the game changer between deciding property vs stocks investments. over the long term this can make all the difference.

GreatApe

economic wrote: »

have you thought about putting your properties in a company in order to reduce the tax burden? it may make sense if you have more then 1 or 2.

capital gains tax is probably the game changer between deciding property vs stocks investments. over the long term this can make all the difference.

Putting existing property into a company is a two step process. You sell and the company buys.
Since I wouldn't buy a new property in a company right now it makes no sense to buy a new property in a company just because the property I would be buying in the company is one I would sell as a sole trader.

Also if there are gains in property values owning via a company is worse off. You pay the corporations tax @19% on the HPI and you also need to pay either dividend tax or income taxes on taking the money out of the company. With the double taxation of the HPI it works out a lot more than the 28% CGT individuals have to pay. Corp tax plus divi tax is just over 45% vs 28% CGT

My current thinking is I would pass on my main home to my kids when I hit 65-70 and all my non capital gains assets too eg ISAs cash savings etc. Then move into one of my rentals. Basically I would have no assets but my investment properties at age 70. Then when I die the CGT is void and my estate pays 40% above the £1milliok threshold. That way you can nullify upto £1 million in CGT

Not saying pensions or ISAs are bad I will fill up my ISA and possibly Max out my pension over my working life. But right now at an age close to you I am very overweight inner London property and don't see an obvious reason to divest and diversify

The biggest reason would be if rent controls come in or if I could predict in advance an upcoming London property price crash/correction but as the hpc cheerleaders can attest to predicting a hpc is not easy

economic

GreatApe wrote: »

Putting existing property into a company is a two step process. You sell and the company buys.
Since I wouldn't buy a new property in a company right now it makes no sense to buy a new property in a company just because the property I would be buying in the company is one I would sell as a sole trader.

Also if there are gains in property values owning via a company is worse off. You pay the corporations tax @19% on the HPI and you also need to pay either dividend tax or income taxes on taking the money out of the company. With the double taxation of the HPI it works out a lot more than the 28% CGT individuals have to pay. Corp tax plus divi tax is just over 45% vs 28% CGT

My current thinking is I would pass on my main home to my kids when I hit 65-70 and all my non capital gains assets too eg ISAs cash savings etc. Then move into one of my rentals. Basically I would have no assets but my investment properties at age 70. Then when I die the CGT is void and my estate pays 40% above the £1milliok threshold. That way you can nullify upto £1 million in CGT

Not saying pensions or ISAs are bad I will fill up my ISA and possibly Max out my pension over my working life. But right now at an age close to you I am very overweight inner London property and don't see an obvious reason to divest and diversify

The biggest reason would be if rent controls come in or if I could predict in advance an upcoming London property price crash/correction but as the hpc cheerleaders can attest to predicting a hpc is not easy

its very difficult to plan that far ahead as tax rules will almost certainly change in that sort of time frame.

maybe its worth setting up a trust for your properties and have your kids included as beneficiaries? i think that allows you to avoid any IHT implications on your properties? not sure the exact workings though.

GreatApe

economic wrote: »

its very difficult to plan that far ahead as tax rules will almost certainly change in that sort of time frame.

maybe its worth setting up a trust for your properties and have your kids included as beneficiaries? i think that allows you to avoid any IHT implications on your properties? not sure the exact workings though.

50+ years from now will surely be a world of plenty for all

Maybe the correct course is to spend a lot more and save a lot less but jta not really in my nature.

economic

GreatApe wrote: »

50+ years from now will surely be a world of plenty for all

Maybe the correct course is to spend a lot more and save a lot less but jta not really in my nature.

mine neither. certainly it makes more sense to work less to give up some income for enjoyment (which is what i have been doing!). i have cheap hobbies.

another reason to spend more now is that it could be taxed a lot in the future anyway.

economic

the other thing is if you have enough why would you want to work an office job? 10 hours a day for 200 days a year sitting at a desk can not be good for your body. we have had this kind of jobs for less then a typical human lifespan so its way too early to tell the effects of it at a wider level but it cant be good.

Gwendo40

The crash trolls over on HPC may indeed be bitter and resentful ''losers'' in the property market...
but I don't thing their attitude is any worse than the smug, sneering, self congratulatory attitude found in this particular part of the internet by the property ''winners''

Especially when the winners have only won due to fraudulent and irresponsible lending by the banks, followed by massive and previously unprecedented support for the property market by the government and Central Bank policy makers.

bobbymotors

Gwendo40 wrote: »

The crash trolls over on HPC may indeed be bitter and resentful ''losers'' in the property market...
but I don't thing their attitude is any worse than the smug, sneering, self congratulatory attitude found in this particular part of the internet by the property ''winners''

Especially when the winners have only won due to fraudulent and irresponsible lending by the banks, followed by massive and previously unprecedented support for the property market by the government and Central Bank policy makers.

I take it you're not property 'winner' then?

GreatApe

Gwendo40 wrote: »

The crash trolls over on HPC may indeed be bitter and resentful ''losers'' in the property market...
but I don't thing their attitude is any worse than the smug, sneering, self congratulatory attitude found in this particular part of the internet by the property ''winners''

Especially when the winners have only won due to fraudulent and irresponsible lending by the banks, followed by massive and previously unprecedented support for the property market by the government and Central Bank policy makers.

You are probably one of the crash cheerleaders

What most of them don't seem to grasp is that house prices are set by supply and demand. Just in England a decent 3 bedroom house can cost anywhere from £100k to £1 million plus. The huge difference is due to supply and demand. Not banks not laws not regulations not credit not the base rate not speculation not BTLers not boomers not the currency not taxes not the government. All of those things are the same in the £100k property area as they are in the £1m property area the only difference is supply and demand.

Why don't the crash cheerleaders accept this obvious fact. Well to do so would mean accepting the foolish 10-15-20 year house price crash bet. But its always better to cut your losses than to hold on and make things worse.

In the UK there is no housing crisis and house prices are affordable.
This too is obvious by the fact that only 14% of UK born rent privately and only 3% rent privately long term (10+ years). If only 3% rent privately long term that means 97% manage to buy or get social housing so where is the problem?

As for landlords having done well.
Yes I am jealous too. Seriously I am!
But I an also jealous of those who bought google or Amazon shares at 1/10th the current price
The only difference between me and you is I am jealous and envious for about 1 minute a week (and mostly in the form of dam i wish i had bought those when they were that cheap) while you are jealous and envious and hateful for half the day ever day. Not a good way to live.

westernpromise

Gwendo40 wrote: »

the winners have only won due to fraudulent and irresponsible lending by the banks

...wrote the loser.