Sell or Keep BTL

kidmugsy

Jaguar_Skills wrote: »

She wants to keep it as an additional pension element for when we are older

When you are older, and perhaps paying income tax at more forgiving rates, and have more time for a property business, you could set up a company and run some BTL that way. Or just invest pension money in firms that own residential property e.g. Grainger, Hearthstone and (I assume) others. In particular, companies that own residential property abroad might be a useful diversification.

Jaguar_Skills

I have tried to answer your questions beneath, thanks for the replies.

You must therefore be through the 60% zone, through the subsequent 40% zone, and about to enter the 45% zone.

Yes.

Your gf will be a 40% tax payer if she gets any pay rise or promotion.

She is only likely to work for a few months, then stop (if and when she is pregnant again).

So BTL is almost certainly a lousy income investment and going to get worse as the phasing in of the tax changes proceeds. Unless you are confident of large capital gains from here, even after paying CGT, I'd incline to get rid of it and use your capital for the owner-occupied house.

This was my argument.

As for pensions, read this.
https://3652daysblog.wordpress.com/2018/03/05/pension-allowance-taper/

Have you got any unused annual allowance to carry forward?

I may have a bit but I put a lot circa £30k into my pension.

This year I have drip fed £600 PCM = £7200 and will make 2 x £10,000 sal sacrifice deposits which I get the NI savings on so £22,760.

I really don't understand the taper allowance, find it so difficult to work out adjusted and threshold income maybe when I get my accountant to do my self assessment this year, he can explain what I have left and am likely to have for the next few years?

P.S. If you are going to marry get on with it so that you can minimise the CGT on selling the BTL.

Have also told her this.

atush

You own 2 homes together, and have an 18 month old. So being not married is costing you money.

Just get married?

BarleyGB

Stamp Duty on a £900,000 house if its your only property is £35000

If you have a 2nd property (BTL) the 3% stamp duty premium means you pay £62000 stamp duty when purchasing a £900,000 house.

pramsay13

We were in a similar position and changed the mortgage on our 2 BTL properties to interest-only so that we can overpay our own mortgage and clear it off.
Before that we were only just breaking even because of the repayment on the mortgages so it seemed like a lot of hassle for not much gain, but now the gain is more obvious it is almost like an extra wage.

Jaguar_Skills

You own 2 homes together, and have an 18 month old. So being not married is costing you money.

Just get married?

I do agree. For her though the money is not the be all and end all. I would like to do a quick marriage then still do our carribean wedding but I do not think I can convince her.

Stamp Duty on a £900,000 house if its your only property is £35000

If you have a 2nd property (BTL) the 3% stamp duty premium means you pay £62000 stamp duty when purchasing a £900,000 house.

I did not realise this and could be a deal breaker.

atush

but might convince her?

Do something romantic and ask her.

justme111

Looks like your gf may have to choose - either say buy to property or get married
Win win