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Property ownership & business structuring

Are you a private landlord looking to restructure your property business or investments?

Are you looking to remain competitive, and to enjoy and reinvest profits without the typical challenges faced by private landlords of:

• Taxation at 40% or higher​
• The inability to deduct finance costs from your taxable profits (Section 24)
• Challenges in succession planning

The good news is that landlords have a number of options available to them.​

It is a complex area and depending on your current situation, your needs and requirements, there are likely to be a handful of options open to you – particularly if succession planning for your portfolio is important for you.​

Whilst there is no one ‘perfect solution’ that exists for all landlords, if you are looking to ultimately pass on your property business to the next generation you may wish to consider a combination of commercial and trust planning.​

As this is a highly complex area, One Consultancy Solutions have sought leading Kings Counsel Opinion, and have the exclusive license to provide solutions in a number of areas for succession-friendly strategies.

Reduce the burden of income tax​

If you are looking to reduce the burden of income tax on the profitability of your business, some scenario planning combined with a review of the reliefs that might be available in your specific circumstances will be a worthwhile exercise that could leave you and your business significantly better off when supported by robust legal and accountancy implementation.​

If you are an investor with property as a part of your investment portfolio, we can help you look at the overall mix and whether there is a better way to structure and manage your position.

We can discuss, advise on and implement common strategies such as transferring your business to a limited company, setting up a management company, remaining as you are, forming partnerships and limited liability partnerships, trust & gift arrangements and any combination of the above to support your goals, aspirations and succession plans.

Approach to Risk

Any decision you make (or do not make) with regards to your business has risks associated with it. For example, allowing your mortgage terms to lapse onto a variable rate has a risk associated with it.

Landlord specific risk includes market conditions, political changes, financial decisions, operational issues, and compliance requirements to name just a few.

Choosing to restructure (or not to restructure) your property portfolio also carries commercial risk.

From your estate planning to remortgaging to effective tax planning, we can guide you through your options and discuss the advantages, disadvantages, and risks involved – ensuring you make the best commercial decisions for your business and future generations.

Inheritance Tax

Inheritance Tax Planning broadly falls into two categories.

1. Passing on some of the value of your estate during your lifetime, and
2. Setting up your estate to make best use of the reliefs you anticipate will be in place at the time of your passing.

Both are viable, with the former providing far greater certainty.

Both major political parties of the day have been associated with significant policy changes to Inheritance Tax which may or may not impact on your desired approach.

OCS can provide guidance and coordinate advice for you on Gifts, Trusts and Investments, as well as the potential reliefs. It is important to consider the advantages and disadvantages of different approaches, from straight-forward gifting to more complex property business and trust arrangements supported by legal Opinion from leading Tax Counsel (KC).

Succession Planning & Insurance

What happens later when you are no longer on this planet?

Will you have sold up and spent every penny to cheat the tax man?

Or do you want to retain your hard-earned estate for the benefit of your beneficiaries?

At some point it will make sense to plan for this.

If you wish for your property estate to remain as intact as possible after your death, then you may need additional protection.

Commercial, Trust and Estate Planning, can help with Inheritance Tax, but you cannot take your mortgages with you!

Do you care whether you leave your beneficiaries with huge debt? Can they pay it off in anyway other than by breaking up the business you have worked hard to build?

Life Cover is one way of helping.

You can structure this tax-efficiently and so the cover is greater when you need it most. For example, your beneficiaries may well have much better paid jobs in say 10- 20 years’ time, so you may not need as much cover then as you do now.

Wealth & Estate Solutions

Our panel of consultants includes Financial Advisors and Estate Planning Solicitors who can work with you to assess your position and aide you in your plans for the future. Whether you are looking to reduce or increase your exposure to the property market, maximise your tax free allowances and/or begin to transfer wealth to the next generation, our team of advisers can help.

OCS can help coordinate and put together a package of multi-diciplinary advice and services from across our group’s regulated companies and elsewhere as required.

Property as Your Pension?

If you are a landlord intending to live off the profits from your property portfolio in retirement, then there are things you will want to consider, these might include:

• Your plans for managing your property portfolio in later life
• Do you need to grow your portfolio to cover management costs and retain your lifestyle?
• Are you planning on selling property to release equity?
• Do you intend to bring your children into the property business?
• Do you wish to pass on your portfolio to your children?

Whatever your chosen vehicle or vehicles to support your retirement financially, it is vital to make the most of them, including being as tax efficient as possible. Something that expert advice can help with.

Selling Up to Diversify Your Property Business

Traditionally, many landlords have opted not to sell their under-performing properties – often because of the subsequent tax consequences – and instead look to grow the business by re-mortgaging to release equity.

However, sometimes it does make sense to lock in a profit (or a loss) and reinvest in different areas.

In addition, those landlords restructuring their property portfolio as a business (using S162 incorporation relief) could well benefit from a significant reduction in Capital Gains Tax, providing an opportunity to sell under-performing properties and take their business into more promising areas and letting types. We can also advise on the merits of other Capital Gains Tax reliefs and exemptions.

Investment Diversification outside property

Many landlords have built their wealth through their property business and may not have other sources of income or savings.

Allocating a proportion of business profits to investments could help protect landlords from unexpected future changes in housing policy or unforeseen issues with the housing market in general or more specifically, difficulties with their own portfolio.

We recognise that a property business can be exceptionally diverse in its own right and many landlord clients will look to reinvest in their property business at the expense of other options such as pensions. For many this might be the right route and investing heavily in your property business may of course be the best option for you. Of course, there are benefits to diversification and not putting all your eggs in one basket can give you added security and also be great for peace of mind.

For private landlords, solutions could include setting up a Management Company to enable the tax-efficient investment of property profits into personal pensions.

For landlords looking to diversify, we are here to help.

Selling Up & Leaving the market

If after considering all the options you have decided to leave the market and sell up your property portfolio, then we can help you with your planning to ensure that you achieve this in the most tax-efficient way possible and that moving forward, you are making the most of the funds left over from your property sales.

If you have not yet considered all the options and your main driver for selling up is say – tax reasons – then there might be a better way.

Property Transactions simplified with joined-up Professional Services for Landlords & Property Investors

When was the last time your accountant, solicitor, financial advisor & business advisor got together to discuss your business?

Our regulated group firms can, with your permission, work together to simplify the mortgage, conveyancing & accounting process every time you buy, sell, remortgage, conveyance or start a new joint venture, project or investment.

From high-street mortgages and conveyancing to your most complex lending and legal requirements.

See Mortgages & Lending

See Conveyancing

See Property Transactions

See Legal Documents

See Tax Advice

We bring a wealth of expertise from working with thousands of landlords across multiple professional disciplines, and can offer solutions that are tailored to your situation. These solutions often involve a blend of professional services, growth strategies, succession planning, risk management, legal structuring and tax optimisation.

Understanding your unique goals, risk tolerance, and financial circumstances is key. Whether you’re looking for specific solutions, or a raft of different products and services, we can help you. Contact the team today.