Protecting personal assets

Protecting personal assets

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I currently own two properties (flats), one on a BTL mortgage and the other on a residential mortgage with consent to let. I rent both of these properties out and am in the process of buying a third property. The reason i want to buy a third property is because i remarried this year and now have a child and the flat i used to live in (one with consent to let) is too small for us so i want to but another suitable property for a family home.
My question is basically is there some way that i can "ringfence" the family home to protect it should i get in to finnancial difficullty in the future and cannot afford to pay what i pay towards the investment properties. A friend of mine mentioned something about setting up a limited company and transferring the ownership of the investment properties to the limited company. Is this easy to do? Would it be likely that i would have to redeem my current mortgages with commercial mortgages?

Any advice would be greatly appreciated.

Many thanks.

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By MBK
24th Nov 2011 13:03

I doubt a limited company would suit ...

... but an LLP would have the same effect.

However, the problem (as you have surmised) is the mortgages. To get things ring fenced the mortgages would have to be replace with new mortgages in the LLP. And then the lenders would probably want personal guarantees.

So, unfortunately, there is no easy way around the issue.

 

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By Steve McQueen
24th Nov 2011 14:20

@soulboysteve

Hi, I take it you are not an accountant?

This site is not really designed to give free advice to those outside of the profession, its more geared to sharing ideas within the profession.

May I suggest that you seek professional advice on a formal fee paying basis. You may like to have a look at the website of the Residential Landlord Association for a list of accountants who specialise in Landlords and property.

One thing I will say, protection schemes are rarely cheap. Are you prepared to spend the thick end of £10k setting this up. If you're not, don't both trying.

Steve

 

PS: of course there is a very easy protection avaliable for the family home - sign it over exclusively to the mrs, take yourself off the mortgage and have the whole thing in her name. She'd get in anyway if you ever divorcee!

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