Choice of Property Owning Options

For a property investor with a large portfolio, it is highly important to seek good advice on the optimal arrangement for tax, costs and administrative purposes, e.g.:

Individual(s): Have properties owned by the individual (or under the individual and wife/husband or partner)
Trust: Roll the property into a Trust – in part to prepare a Will and for tax planning purposes
Foundation: Put some or all of the properties into a Foundation – e.g. a charity that donates its income for good causes, with Trustees
Company: Roll the properties into a Limited Company (UK based) or offshore company
Balance Portfolio: Optimise one’s property portfolio in relation to capital value gained and annual income received to increase tax efficiency

The first and number one rule in this planning is integrity, and transparency.

Each of these types of property owning entity consume a good deal of resources for:

Setting up – costs and time/manpower
Annual administrative costs and time/manpower
Complexity
Costs, risks and time to unscramble the arrangement if this is necessary
Pros and cons in relation to tax liabilities, and liquidity of assets

Of note is that most building societies will not allow properties to be rolled into trusts because they believe this reduces single point accountability, increases their risk, and/or increases their costs because of the added complexity. If a trust is the best option, early consultation with your bank/building society is required to prevent wasted time and cost.

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