SUDDEN DEATH of my partner - Stuck in limited company with 2nd property - HELP!

buildingbee

Hi everyone,

I'm sorry if my post seems a bit shouty, but I desperately require some advice and hope someone can point me in the right direction.  My partner has suddenly died and other than the shock of coming to terms with his death, I'm struggling to manage everything financially and correctly.

I'll give you a bit of a background.  I'm going to put my hands up and state that financially I'm not savvy - That was my partner. Last year, he wanted to purchase a 2nd property to rent out as a little nest egg for us and a project for him to do.  I didn't feel it was right as I was happy in our own home without any worries or mortgage to pay.  However after many many arguments and our relationship at a strain, I was worn out and I gave up and agreed with him

We then took out a small remortgage on our own property as he said it would be cheaper than getting a buy-to-let.  This was then used, along with some extra cash to purchase the 2nd property cash outright.  However this was done via a limited company (SPV or something???).  Within that he setup both of us as directors.

Once we purchased the property, we began some renovation work which was almost completed, but he then suddenly passed away.  I am now left devastated, along with this 2nd property trapped in a limited company and a mortgage on our residential property.  I don't know how to manage our limited company.  I currently don't have any tenants that can pay some rent to assist, but the property has been advertised already, so I'm hoping to get someone ASAP.  However currently my finances are in a dire situation that I can't afford to pay a financial advisor/accountant to help me.  

I know it's my fault for stupidly jumping in without thinking and I'm really sorry for not learning about how to run a limited company or researching and I deserve everything I get, but this is what happens when you've been married for 35+ years and love, trust and rely on that person blindly.

To start off with, I'm looking for help to understand the inner workings of managing a limited company as a director and have some questions if I may ask:-

1. We originally paid a director's loan to the company to cover costs of repairing and refurbishing the property.  From this there's some money left over.  So am I allowed to withdraw any spare money from the company? If so, how?
2. With a mortgage taken out on our residential property, specifically to pay for purchase of the 2nd property within the limited and assuming that I eventually find a tenant, am I allowed to use a portion of that rental income from the limited company to pay off our residential mortgage? If so, how?

Thank you so much for any help or advise you give.

EssexHebridean

I have no advice to offer, but didn't want to read and run without saying how sorry I am to hear of your partner's sudden death, the shock must be terrible even without the worry about the matter you have posted about. 

Section62

buildingbee said:

Once we purchased the property, we began some renovation work which was almost completed, but he then suddenly passed away.  I am now left devastated, along with this 2nd property trapped in a limited company and a mortgage on our residential property.  I don't know how to manage our limited company.  I currently don't have any tenants that can pay some rent to assist, but the property has been advertised already, so I'm hoping to get someone ASAP.  However currently my finances are in a dire situation that I can't afford to pay a financial advisor/accountant to help me.  

Sorry for your loss.

Unfortunately it sounds like you will need professional help to get this situation untangled.  In the meantime, I feel that letting the property out risks making the situation more complicated than it is already - once you have a tenant you would remove some of the possible options (and/or add a layer of complexity to the process) such as selling the property and winding the company down.

Being a landlord is not easy, and if you are having difficulty dealing with the situation as it is, I'd be reluctant to make it any more complicated.

elsien

This may be a statement of the bleeding obvious so apologies for that, but have you double check to see if he had any life insurance or pension lump sums - anything that might pay out in the circumstances?

propertyrental

Everything you've said screams: do not become a landlord.

You have enough on your hands, emotionally, practically and financially. You were reluctant from the start.

So sell the 2nd property. ASAP, maybe at auction if the renovations are not complete. Then wind up the company (I'm not sure how) and withdraw the money (plus the property sale money).

Then pay off your mortgage (after checking for any Early Redemption fees).

You need to simplify your affairs, not make them more complicated.

Did your partner have any life insurance?

DullGreyGuy

buildingbee said:

1. We originally paid a director's loan to the company to cover costs of repairing and refurbishing the property.  From this there's some money left over.  So am I allowed to withdraw any spare money from the company? If so, how?
2. With a mortgage taken out on our residential property, specifically to pay for purchase of the 2nd property within the limited and assuming that I eventually find a tenant, am I allowed to use a portion of that rental income from the limited company to pay off our residential mortgage? If so, how?

Did he get any professional advice from an accountant before setting it all up? If so they may be willing to provide some basic assistance or if its billable advice it at least should be for less hours as they know the full setup etc already.

1) You can move money out of the company as repayment towards the loan

2) Not directly, you could withdraw funds to repay the directors loan, have a salary or take dividends and then use that cash to pay off/down the mortgage however the second two may be subject to tax depending on your other incomes and amounts involved.

aliby21

I am also going to say don't become a landlord.  Sell the second property, wind up the company, pay off the mortgage on your home.   At the very least don't get tenants in until you have properly worked through all the options.

Tucosalamanca

Sorry for your loss.

Again, at risk of stating the obvious, is there any life insurance in place to cover the mortgage? It would be unusual not to take insurance when arranging the mortgage.

Regarding the limited company / second home, are you sure that you want to become a landlord? I would be inclined to sell the second property and dissolve the limited company when all matters are finalised.
You didn't want the property and certainly didn't want to start running a limited company, why would you choose to continue at this point?
I'm assuming your partner took advice before and during this venture.
Can you go back to the person who offered guidance as they might be able to help you unpick  and resolve the situation?

Tiglet2

So very sorry to hear of your loss.  I also lost my husband quite a few years ago, so can empathise.

I can't help regarding the limited company, but would agree with other posters that you should think about simplifying the finances rather than making it more challenging by getting tenants into the property.  Once you become a landlord, there are many other important legalities that you need to know, and it is far more difficult to decide to sell once you have tenants and they don't want to leave (whole new chapter).

You should think about selling the property and paying off the mortgage on your residential home.

I'm assuming you hold the residential property as Joint Tenants, so the property is passed to you.

Did your husband have any life insurance, or any other insurance policies, i.e. mortgage protection, death in service benefit, widow's pension from husband's employer, or critical illness (you say sudden death, but was there an illness?).

Did you have joint banks accounts?  If not, the bank will probably freeze your husband's account, so you won't have access to it.

Not sure if you can still claim help with funeral expenses, but definitely used to be available.

theoretica

I am sorry for your loss. As others have said, this sounds like it was a project for your partner, and perhaps not getting tenants in, selling the property and paying off the mortgage would be the right course of action for you.

I am not certain they could help with advice, but https://www.businessdebtline.org/ might be worth trying.

ellenvan

Try citizens advice - they will not charge you and may be able to point you in the right direction.
Number of your local branch should be available locally/ telephone/internet.