PLANNING FOR THE FUTURE

None of us really want to think about what would happen if the worst happened, but as a landlord it’s not safe to simply assume that it would be business as usual if you were to suffer an accident or to pass away. Too many landlords assume that their property portfolios could easily be transferred to their spouse or children in the event of an accident, but it does require a little more planning than that…

The Right Insurance

Though landlord insurance should be your go-to cover for most things, it may not cut in if you were to become unable to run your portfolio. Really a life assurance policy is what you need and you should make sure this covers you both in the event of death and in the case where you become incapacitated or unable to manage your portfolio as before. The sums that these sorts of insurance cover can be huge so it really is worth paying the premium.

Wills and Legal Responsibility

Anyone with any assets that they would like to be passed on to family, friends or even charity needs to start thinking about the legal side of things. Make no mistake, you will have to get a solicitor to do this for you and make sure it’s current. Plenty of landlords buy and sell property on a yearly basis, so ensure any provisions you have are kept up to date and include all your property and all your mortgages.

Tax Efficient Planning

Also, don’t assume that everything can easily be passed on to your family tax-free. The rate of inheritance tax in the UK is 40% and this can be an enormous slice of any property you leave. Often it means that beneficiaries of inheritance are forced to sell on perfectly good rental properties simply to pay off the tax bill. Plan early and do what you can to minimise the costs.

It’s much better to be safe than sorry when it comes to your property business and as landlords by definition wrap up a large portion of their assets in property it’s vital to protect it and leave it in good shape. Take a moment to think about the unthinkable, sort it out with a solicitor and make sure that you leave your portfolio in good shape for the next generation!

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