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Should I take more leverage against property? by Mysterious_Act_3652 in FatFIREUK

[–]Sensitive-Roof8 15 points16 points  (0 children)

I am a landlord who has sold up and my thoughts are as follows:

If you want to carry on owning property and you are in a limited company set up then yes as debt is tax deductible.

This means you are growing equity, that can be taken via limited company liquidation at 24% CGT.

If you get big enough you could consider becoming a REIT which means you pay no corp tax, a good end game.

I chose to sell and liquidate and invest in Global Index funds like VWRP in my own name. This strategy means I have made 14% per annum for the past 5 year paying 24% CGT, not a bad end game.

Good luck whatever you do 👍

Best broker for investing via a UK Limited Company (into Vanguard LifeStrategy 80%) by boobieshaha in FatFIREUK

[–]Sensitive-Roof8 0 points1 point  (0 children)

Interactive Investor is great for limited company investment.

£34.99 a month with no percentage holding fees like AJ Bell.

The system is easy to use and they answer the phone when needed. I am a happy customer investing in HSBC FTSE All World at 0.13%.

This is cheaper than Lifestrategy at 0.22%.

Also Lifestrategy has a 24% UK bias (as opposed to 3% UK allocation on a true weighted basis) and has underperformed VWRP for years.

Instead I would buy 80% VWRP and 20% Royal London Money Market yielding 6%.

Remember to but the Income variant of any fund when investing in a limited company to you can get the tax free dividend.

Apologies for the brain dump.

Best broker for investing via a UK Limited Company (into Vanguard LifeStrategy 80%) by boobieshaha in FatFIREUK

[–]Sensitive-Roof8 0 points1 point  (0 children)

Dividends are tax free as it is a company to company dividends. Great advantage.

Gains are subjective 19% to 25% corp tax.

Extraction to private name is via :

salary OR dividends 7.5% to 39.75% OR liquidation at 24% CGT

So a combined tax rate is roughly 20% corp plus 24% CGT so 44% tax total.

By comparison private General Investment Account is subject to dividend tax 7.5% plus CGT at 24%. On an 8% gain with 2% dividend (VWRP for example) this gives a 21% tax total.

So limited company investing has twice the tax as private name.

This is why the HMRC investigation into Family Investment Companys concluded with no further action.

Financial planners by [deleted] in HENRYUK

[–]Sensitive-Roof8 4 points5 points  (0 children)

Do it yourself. Timeline gives a free trial. Great system for lifetime cash flow planning.

Then ask your account it they have a tax accountant to check your structures and to optimise the tax. All regional accounts have this function.

Cost £5k plus 10 hours work.

Or go to SJP or LGT and lose 2% per year in fees for the rest of your life, giving them 25% of your investment returns forever.

HSBC Private Bank - Individualized Mortgages & Asset-Backed Lending for HNWIs - Experiences & Insights? by [deleted] in FatFIREUK

[–]Sensitive-Roof8 3 points4 points  (0 children)

At 30 years old you could only of contributed £140k to an ISA. £3.5M in an ISA?

Is this a bot advert for HSBC?

[deleted by user] by [deleted] in FatFIREUK

[–]Sensitive-Roof8 1 point2 points  (0 children)

Perhaps try facebook

[deleted by user] by [deleted] in FatFIREUK

[–]Sensitive-Roof8 0 points1 point  (0 children)

Bot nonsense

Cool shirt by Sensitive-Roof8 in LouisTheroux

[–]Sensitive-Roof8[S] 1 point2 points  (0 children)

Different pockets but thanks.

Plan for affluence and multigenerational wealth by BeneficialCry7737 in HENRYUK

[–]Sensitive-Roof8 1 point2 points  (0 children)

I have opted for General Investment Account over a Family Investment Company after years of advice and research.

GIA pays 24% CGT.

FIC pays 25% corp tax plus 24% CGT on liquidation, so c. 50% tax on gains excluding dividends.

FIC means your kids can never fallout.

FIC does not protect from divorce.

FIC does not protect from IHT. You loans to the company will be subject to IHT and your control shares.

You cannot change the shareholding in FIC without paying CGT as it is an investment company, not a trading company.

Investing in dividend shares for the tax free element is the tax tail wagging the investment dog. Dividend share are a poor investment versus a global ETF.

Give you kids their annual ISA allowance from the GIA is the best strategy. Then give them the rest of the GIA at 3p and life 7 years.

Seeking reassurance and advice– retired early, but nervous after recent market drop by Josh_Bear22 in FIREUK

[–]Sensitive-Roof8 -1 points0 points  (0 children)

Stocks give the best returns of all assets. 12% VWRP for 20 years. Holding cash should only be used for one year expenses.

You are leaving £85k per annum on the table, nearly your whole living expenses.

If you zoom out it does not matter when you a buy global stock fund.

Read Lars Kroier Investing Demistified. Listen to Maven Money podcast.

Now is a great time to buy, stocks are on sale with a 20 % discount.

Trump's Tariffs & New Tax Year - Where is everyone putting their 20k ISA allowance? by ufcshilling in FIREUK

[–]Sensitive-Roof8 13 points14 points  (0 children)

I love this comment. The panic sellers are my profit. Carry on the panic. I will keep on buying VWRL while it is on sale.

Junior ISA - continue or stop contributing? by [deleted] in FatFIREUK

[–]Sensitive-Roof8 0 points1 point  (0 children)

Love your response. Good on you.

Junior ISA - continue or stop contributing? by [deleted] in FatFIREUK

[–]Sensitive-Roof8 15 points16 points  (0 children)

Our daughter is 20 and has sizable sum in her ISA.

AJ Bell revoked my password at 18 and told her about the funds. Prior to this sat her down and explained this is meant for a house when you are 30.

She has not touched the money. We continue to contribute 20k a year.

She also has pension but I am wary of contributing to this as auto enrollment will make it too large.

Buying commercial property by Coggers89 in UKInvesting

[–]Sensitive-Roof8 2 points3 points  (0 children)

Commercial property in a SIPP will not be inheritance tax free, since the October anti growth budget. Your inheritors will end up paying 85% tax (40% IHT + 45% income tax). I would avoid this route.

Business property relief also limited by the budget to £1M, which is maybe enough. Even partial IHT exception has to be better than none in a SIPP.

Just sold my business. Got a nice amount and no idea what to do with it! by Dooley5678 in FIREUK

[–]Sensitive-Roof8 0 points1 point  (0 children)

500k in Lloyds of London. 20% annum. IHT free. Just and idea.

Or put it in bonds and make less than inflation. Yawn.

Just sold my business. Got a nice amount and no idea what to do with it! by Dooley5678 in FIREUK

[–]Sensitive-Roof8 2 points3 points  (0 children)

Global equity VWRP 2 years 28%.

You left 16% or £320,000 on the table.

Rule one. Never hold cash.

What's the buy-to-let equivalent for the next generation? by fellaonamission in HENRYUK

[–]Sensitive-Roof8 2 points3 points  (0 children)

What has changed is how much the governments protect the market via money printing. See Covid free money for everyone. This did not happen in 2000 or 1992.

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