Writing a Will is often associated with leaving sentimental objects to a doting nephews or nieces, however the buy-to-let boom in the Noughties witnessed a huge growth in would-be landlords including here in our city, London.
As a London Will Writer I always believe tangible assets help our customers realise the effectiveness of drafting a Will as the commodity is that much more apparent and visual.
Buy-to-lets do have tax implications. If the property is sold capital gains tax applies and if it is kept beyond death then there are likely to be Inheritance Tax implications for your Estate. This level of tax is often further exasperated in London due the typically higher property values.
The asset itself is of course illiquid in the sense that it is not an investment that can be realised quickly. The house selling process typically takes a few months and this can create major complications when trying to dismantle an Estate evenly to next of kin through Probate. It is also a catch twenty-two as money might be needed immediately to meet the IHT bill yet a fire-sale will mean a reduction in the yield from the sale, enough to make the dearly departed turn in their grave.
A Will can simplify the process as the beneficiary can be identified. For professional landlords this could mean identifying certain properties go to their named children.
It is not always possible to have foresight as death can strike without prior warning. However, it may be worth considering gifting some of the portfolio to children. Lifetime gifts that happen seven years prior to death are usually exempt from inheritance tax.
We at Niche Wills in London, ensure that our Legal Consultants make Wills that take into account portfolios of all sizes and impart their advice on tax mitigation.
To find out more please contact us on:
Niche Wills, Will Writers in London
T: 020 7993 2044
