How does Buy to Let END!

[GTM]

20 minutes ago, HousePriceMania said:

, worth 200-300K tops.

If that. It looked OK when it was empty when we looked around, but the rooms turned out to be incredibly small in practice when we moved in. The windows were fucked, despite being less than 20 years old, which meant the house was often cold and draughty. I disliked the idea of moving again so soon after the last move, but my wife and I hated the place.

[HousePriceMania]

BTL ends...by stealth it seems

 

https://www.rightmove.co.uk/properties/132187142#/?channel=RES_NEW

 

"OFF MARKET BUILDINGS AVAILABLE, PRICES FROM £4,500,000 WITH YIELDS FROM 7%.

PLEASE NOTE AS THIS PROPERTY IS A PRIVATE SALE PROOF OF FUNDS WILL BE NEEDED PRIOR TO VIEWING THE OPPORTUNITIES ON OFFER.

ARABIC, ENGLISH AND POLISH SPEAKING AVAILABLE."

 

I think the also speak CUNT.

 

[Wight Flight]

50 minutes ago, HousePriceMania said:

, worth 200-300K tops.

I was going £750k based on my rental yield.

Bloke is giving it away.

[spygirl]

Gilt yields soar towards ‘mini’ Budget levels after inflation disappoints

Despite fall to single figures, April’s consumer price inflation of 8.7% is significantly above BoE’s forecast

https://www.ft.com/content/7b7e6a9b-a428-49ce-8560-c2fce5d0f73f

Quentin Fitzsimmons, a senior portfolio manager at US asset manager T Rowe Price, described the market reaction to the inflation data as “an amber flag — if not a red flag”.

He argued that the inflation pressure was so great that the Bank of England would be forced to raise interest rates aggressively beyond their current level of 4.5 per cent. “

I can’t see what will stop it, short of a very substantial recession,” he said.

Traders in forward markets are now betting that rates will peak at about 5.3 per cent by the end of the year

 

I can't stress hiw much BoE fucking up is going to hammer io btl.

Resi mortgages 7-8%

Btl 10%-14% assuming the bank doesn't call in the loan.

 

 

 

 

[Chewing Grass]

1 minute ago, spygirl said:

Gilt yields soar towards ‘mini’ Budget levels after inflation disappoints

Despite fall to single figures, April’s consumer price inflation of 8.7% is significantly above BoE’s forecast

https://www.ft.com/content/7b7e6a9b-a428-49ce-8560-c2fce5d0f73f

Quentin Fitzsimmons, a senior portfolio manager at US asset manager T Rowe Price, described the market reaction to the inflation data as “an amber flag — if not a red flag”.

He argued that the inflation pressure was so great that the Bank of England would be forced to raise interest rates aggressively beyond their current level of 4.5 per cent. “

I can’t see what will stop it, short of a very substantial recession,” he said.

Traders in forward markets are now betting that rates will peak at about 5.3 per cent by the end of the year

 

I can't stress hiw much BoE fucking up is going to hammer io btl.

Resi mortgages 7-8%

Btl 10%-14% assuming the bank doesn't call in the loan.

 

 

 

 

5.3% is not enough, needs to be nudging 6 this year.

[HousePriceMania]

Cant remember if this was posted
 

Landlords urged not to exit buy-to-let en masse

https://propertyindustryeye.com/landlords-urged-not-to-exit-buy-to-let-en-masse/

If that's not a sign of desperation I dont know what is.

Banks release a new song for the debt junkies...

 

[spygirl]

23 minutes ago, HousePriceMania said:

Cant remember if this was posted
 

Landlords urged not to exit buy-to-let en masse

https://propertyindustryeye.com/landlords-urged-not-to-exit-buy-to-let-en-masse/

If that's not a sign of desperation I dont know what is.

Banks release a new song for the debt junkies...

 

Leech tick asks leech to hang around....

As IR contunue to rise and IO BTL laons start to go bad then iots not really goign to be the LL shout.

 

[HousePriceMania]

28 minutes ago, spygirl said:

Leech tick asks leech to hang around....

As IR contunue to rise and IO BTL laons start to go bad then iots not really goign to be the LL shout.

 

You can imagine what the people asking the other idiots to hang around are actually doing....

Edited May 25, 2023 by HousePriceMania

[marceau]

53 minutes ago, HousePriceMania said:

Cant remember if this was posted
 

Landlords urged not to exit buy-to-let en masse

https://propertyindustryeye.com/landlords-urged-not-to-exit-buy-to-let-en-masse/

If that's not a sign of desperation I dont know what is.

Banks release a new song for the debt junkies...

 

Ruthless economic Darwinism when the market's on the way up morphs into calls for social solidarity when it's on the way down. Fucking hilarious.

 

[Wight Flight]

Just how lazy can an estate agent be?

Bet they still get 50 applicants tomorrow though, sight unseen.

https://www.rightmove.co.uk/properties/135299951#/?channel=RES_LET

[One percent]

13 minutes ago, Wight Flight said:

Just how lazy can an estate agent be?

Bet they still get 50 applicants tomorrow though, sight unseen.

https://www.rightmove.co.uk/properties/135299951#/?channel=RES_LET

My guess is that the current tenants told them to jog on when they wanted to take pictures of the interior of the house. Tells you all you need to know about the relationship between landlord and tenant. I would give it a massive swerve.  

[Wight Flight]

1 hour ago, One percent said:

My guess is that the current tenants told them to jog on when they wanted to take pictures of the interior of the house. Tells you all you need to know about the relationship between landlord and tenant. I would give it a massive swerve.  

They usually just use archive pictures from last time anyway.

The beach pictures (which are a long way away) were taking the piss.

[eek]

19 hours ago, Wight Flight said:

Just how lazy can an estate agent be?

Bet they still get 50 applicants tomorrow though, sight unseen.

https://www.rightmove.co.uk/properties/135299951#/?channel=RES_LET

Optimistic in this day and age to say that it will be available from June 30th

If the landlord has kicked them out the odds of them finding somewhere to move to by then might be minimal.

[Wight Flight]

18 minutes ago, eek said:

Optimistic in this day and age to say that it will be available from June 30th

If the landlord has kicked them out the odds of them finding somewhere to move to by then might be minimal.

Almost zero round here.

[spygirl]

R4 bizzynews ...

Ray Charcoal, the unliving dead mortgage broker.

On 8000 mortgage being withdrawn.

Yes, these are mostly BTL mostly.....

Oh dear.

The banks  now appear to be running from the BTL sector.

Was always going to happen. Just a question of when.

 

[AlfredTheLittle]

Buy to Let ended badly for these landlords. They set up a Trust to avoid inheritance tax, but it went wrong and they accidentally gave all 35 of their properties to the NSPCC.

 

Quote

 

In Bhaur & Ors v Equity First Trustees (Nevis) Ltd & Ors [2022] EWCA (Civ) 534, an IHT-saving property partnership incorporation scheme involving a complex offshore Employee Benefit Trust could not be reversed on the grounds of a mistake about its tax consequences. It was highly artificial tax avoidance which Mr Bhaur decided to enter into despite knowing the risk of a HMRC challenge.

Mr and Mrs Bhaur built up a property partnership of 35 properties. They Incorporated the business retaining legal title to all the 35 properties personally.

• To avoiding Inheritance Tax (IHT) they then embarked on a complex set of transactions over the course of several years involving Employee Benefit Trusts (EBTs), offshore companies and the transfer of the beneficial ownership of the properties offshore
• The EBTs excluded Mr and Mrs Bhaur. Younger family members were able to benefit.
• In 2016, the trustees proposed making payments to Mr and Mrs Bhaur and their two sons, described as 'income benefits' on the basis that the trust terms provided that benefits must be paid to employees and they had not been so far paid.
• Mr and Mrs Baur challenged the proposal due to the resulting substantial tax liabilities and the family refused to accept the payments.
• As a result, the trustees resolved to dissolve the company now holding the trust assets, bring the trust to an end and transfer all assets to the default trust beneficiary, the National Society for the Prevention of Cruelty of Children (NSPCC).
• The claimants asked that either the first and second trust be set aside on the grounds of mistake or, that the new structure be set aside as a sham and the appointment to the NSPCC be found invalid.
• The High Court dismissed the case and refused to set aside the scheme: they found that the trusts had been properly constituted and Mr Bhaur had not made any mistake in entering the scheme even though he did miscalculate the tax consequences if the scheme went wrong. The Bhaurs appealed.

The Court of Appeal also dismissed the Bhaur family’s appeal:

• Mr Bhaur knew that the scheme could be challenged by HMRC and, at the very least, that there was a risk that the financial consequences of the scheme failing would not be entirely neutral and might be worse than the potential Inheritance Tax which could have applied without the scheme. He made a conscious decision to implement the scheme anyway.
• The scheme was an entirely artificial tax avoidance scheme amounting to tax evasion. Whilst tax avoidance is not unlawful, artificial tax avoidance is a 'social evil' that puts an unfair burden on those who do not enter into it and this was a factor which weighed heavily against the granting of any relief.
• Even on the basis that the Bhaur family were not complicit in the dishonesty of the scheme promoters, it would not be unjust or unconscionable to refuse equitable relief and to leave the consequences of the Appellants' mistaken belief uncorrected.

 

•  

 

 

[spygirl]

28 minutes ago, AlfredTheLittle said:

Buy to Let ended badly for these landlords. They set up a Trust to avoid inheritance tax, but it went wrong and they accidentally gave all 35 of their properties to the NSPCC.

 

•  

 

 

https://www.lexisnexis.co.uk/legal/news/all-is-lost-mistake-cannot-unwind-artificial-tax-avoidance-scheme-bhaur-v-equity-first-trustees-nevis

Private Client analysis: This case provides a salutary lesson to those considering entering into artificial tax avoidance schemes and professionals advising those who have already participated in such schemes. The court held that the transfer of the taxpayers’ substantial property portfolio into a trust, as part of a tax avoidance scheme, could not be set aside due to mistake. In reaching this conclusion, the court considered such schemes a social evil, and if entered into deliberately with knowledge of the risks being run, the taxpayer could not look to the courts to set aside the transactions, no matter how financially devastating the scheme failure. Further, the dishonesty of those advising on the tax avoidance scheme was not relevant to the issue of mistake. Those entering into such schemes must therefore necessarily consider how they can extricate themselves should the scheme go wrong, in the knowledge that the courts are unlikely to step in and put matters back to how they were before. Written by Michael Avient a barrister at Temple Tax Chambers who was instructed by the third respondent. Sign in or take a trial to read the full analysis.

https://www.property118.com/how-to-avoid-inheritance-tax-for-landlords/

[spygirl]

 Last Updated: 20 October 2021

In Bhaur & Ors v Equity First Trustees (Nevis) Ltd & Ors [2021] EWHC 2581 (CH), the High Court denied a request to set aside an Employee Benefit Trust scheme on the grounds of mistake despite attempts by the offshore trustees to give 90% of the trust value to the NSPCC as the default beneficiary. 

Mr and Mrs Bhaur ran a property partnership which they incorporated with around 35 properties. Legal title to the properties was not transferred and was retained by Mr and Mrs Bhaur.

• A few days later the company (UK company) set up a remuneration trust (the First trust) for the benefit of its employees excluding Mr and Mrs Bhaur, to be funded by the transfer of the beneficial interest in the properties.
• A BVI company (BVI) was set up. The intention was that the UK company would transfer the properties to BVI in return for shares in BVI and the shares would then be settled on the trust which was also BVI resident.
• Two years later a Nevis company (Nevis) was formed. The property held by BVI was transferred to Nevis. This was done by way of a second deed of trust creating a second replacement remuneration trust, (the Second trust) resident in Nevis. The nature of the trust remained broadly the same.
• In 2011 a ‘New structure’ was entered into with the aim of avoiding the 2010 Disguised Remuneration rules. It involved the properties and shares in Nevis being transferred to ‘an employee’ who would use these assets to purchase an annuity from an offshore insurance company, which would in turn transfer the properties back to Nevis. Another Nevis trust could then buy Nevis.
• Further transactions took place over the next few years involving protected cell companies in Mauritius and the creation of a further, ‘purpose’ trust. The details were complex but also included the Bhaur family being paid a fee for investment advisory services. The court saw these transactions as a further part of the ‘new structure’.
• In 2016, the trustees proposed making payments to junior members of the Bhaur family totalling £480,000. They were described as income benefits, covering all years since 2007, on the basis that the trust terms provided that benefits must be paid to employees and they had not been so paid. Mr and Mrs Baur disagreed with this, challenged the proposal due to the resulting substantial tax liabilities and the junior family members refused to accept the payments.
• As a result, the trustees resolved to dissolve the company now holding the trust assets, bring the trust to an end and transfer all assets not being paid to employees to the default trust beneficiary, the National Society for the Prevention of Cruelty of Children (NSPCC). This would have meant that the Bhaur family would lose 90% of the value of the trust property.
• The claimants asked that the first and second trust be set aside on the grounds of mistake or, in the alternative, that the new structure be set aside as a sham and the appointment to the NSPCC be found invalid. They claimed the scheme was unlawful and dishonestly promoted to them.

The High Court dismissed the case and refused to set aside the scheme.

• Both remuneration trusts were properly constituted. The new structure was void except that the purpose trust was effective as a sub trust to the second trust.
• The question was, did Mr Bhaur, by reference to his state of mind when entering into the Scheme, make a mistake in entering into the Scheme sufficiently grave as to make it unconscionable on the part of the donee to retain the property?
• Mr Bhaur and his sons were careful and painstaking in their approach to the family business. They were prudent, careful individuals, who would have considered the proposals with attention and diligence and who would therefore not, as their counsel suggested, have been ‘duped’ by the promoters.
• They did miscalculate the tax consequences if the scheme went wrong, thinking that it could simply be reversed when it could not, but this did not amount to a mistake.

The judge referred to the new structure as a ‘dangerous game of double or quits’ which was consciously played and which strongly suggested there was no mistake when the Bhaur family first entered into the scheme. He made orders that the property be held on the terms of the second trust under the jurisdiction of Nevis law. He enjoined the trustees from doing anything in the relation to the trust on a temporary basis to enable the relevant courts in Nevis to properly determine what should happen with the trust, noting that whilst he may wish to go further, this was outside of his jurisdiction.

[BoSon]

2 hours ago, spygirl said:

 Last Updated: 20 October 2021

In Bhaur & Ors v Equity First Trustees (Nevis) Ltd & Ors [2021] EWHC 2581 (CH), the High Court denied a request to set aside an Employee Benefit Trust scheme on the grounds of mistake despite attempts by the offshore trustees to give 90% of the trust value to the NSPCC as the default beneficiary. 

Mr and Mrs Bhaur ran a property partnership which they incorporated with around 35 properties. Legal title to the properties was not transferred and was retained by Mr and Mrs Bhaur.

• A few days later the company (UK company) set up a remuneration trust (the First trust) for the benefit of its employees excluding Mr and Mrs Bhaur, to be funded by the transfer of the beneficial interest in the properties.
• A BVI company (BVI) was set up. The intention was that the UK company would transfer the properties to BVI in return for shares in BVI and the shares would then be settled on the trust which was also BVI resident.
• Two years later a Nevis company (Nevis) was formed. The property held by BVI was transferred to Nevis. This was done by way of a second deed of trust creating a second replacement remuneration trust, (the Second trust) resident in Nevis. The nature of the trust remained broadly the same.
• In 2011 a ‘New structure’ was entered into with the aim of avoiding the 2010 Disguised Remuneration rules. It involved the properties and shares in Nevis being transferred to ‘an employee’ who would use these assets to purchase an annuity from an offshore insurance company, which would in turn transfer the properties back to Nevis. Another Nevis trust could then buy Nevis.
• Further transactions took place over the next few years involving protected cell companies in Mauritius and the creation of a further, ‘purpose’ trust. The details were complex but also included the Bhaur family being paid a fee for investment advisory services. The court saw these transactions as a further part of the ‘new structure’.
• In 2016, the trustees proposed making payments to junior members of the Bhaur family totalling £480,000. They were described as income benefits, covering all years since 2007, on the basis that the trust terms provided that benefits must be paid to employees and they had not been so paid. Mr and Mrs Baur disagreed with this, challenged the proposal due to the resulting substantial tax liabilities and the junior family members refused to accept the payments.
• As a result, the trustees resolved to dissolve the company now holding the trust assets, bring the trust to an end and transfer all assets not being paid to employees to the default trust beneficiary, the National Society for the Prevention of Cruelty of Children (NSPCC). This would have meant that the Bhaur family would lose 90% of the value of the trust property.
• The claimants asked that the first and second trust be set aside on the grounds of mistake or, in the alternative, that the new structure be set aside as a sham and the appointment to the NSPCC be found invalid. They claimed the scheme was unlawful and dishonestly promoted to them.

The High Court dismissed the case and refused to set aside the scheme.

• Both remuneration trusts were properly constituted. The new structure was void except that the purpose trust was effective as a sub trust to the second trust.
• The question was, did Mr Bhaur, by reference to his state of mind when entering into the Scheme, make a mistake in entering into the Scheme sufficiently grave as to make it unconscionable on the part of the donee to retain the property?
• Mr Bhaur and his sons were careful and painstaking in their approach to the family business. They were prudent, careful individuals, who would have considered the proposals with attention and diligence and who would therefore not, as their counsel suggested, have been ‘duped’ by the promoters.
• They did miscalculate the tax consequences if the scheme went wrong, thinking that it could simply be reversed when it could not, but this did not amount to a mistake.

The judge referred to the new structure as a ‘dangerous game of double or quits’ which was consciously played and which strongly suggested there was no mistake when the Bhaur family first entered into the scheme. He made orders that the property be held on the terms of the second trust under the jurisdiction of Nevis law. He enjoined the trustees from doing anything in the relation to the trust on a temporary basis to enable the relevant courts in Nevis to properly determine what should happen with the trust, noting that whilst he may wish to go further, this was outside of his jurisdiction.

The Bhaurs in this case are a Amarjit and Joginder Bhaur, sikh and you shall find.

https://www.casemine.com/judgement/uk/6155634e2c94e0721071d326

 

[spygirl]

7 minutes ago, BoSon said:

The Bhaurs in this case are a Amarjit and Joginder Bhaur, sikh and you shall find.

https://www.casemine.com/judgement/uk/6155634e2c94e0721071d326

 

Fuck knows what they were doing.

Didnt Incoperate.

Didnt formalise partnership.

https://suite.endole.co.uk/insight/people/14219293-mr-amarjit-singh-bhaur

I have a feeling HMRC will be snuffing around next, followed by migration.

 

[BoSon]

6 minutes ago, spygirl said:

Fuck knows what they were doing.

Didnt Incoperate.

Didnt formalise partnership.

https://suite.endole.co.uk/insight/people/14219293-mr-amarjit-singh-bhaur

I have a feeling HMRC will be snuffing around next, followed by migration.

 

He's safe, he's an ex bus driver. More chance his son becoming mayor than deportation.

[sancho panza]

On 31/05/2023 at 07:21, spygirl said:

R4 bizzynews ...

Ray Charcoal, the unliving dead mortgage broker.

On 8000 mortgage being withdrawn.

Yes, these are mostly BTL mostly.....

Oh dear.

The banks  now appear to be running from the BTL sector.

Was always going to happen. Just a question of when.

 

Given Natiownides £40bn BTL laon book is 91% IO........what are their options?

[Boon]

If they want to lose exposure to their loan book, in theory they should just call in the loans and liquidate the assets.
But much like how people are used to low interest rates, nobody would expect any lender actions on a mortgage that is performing. 

I've seen in some repos that liquidating them is not that easy, especially the BTL flats. Usually they are in shitting conditions and the discount to market needed to shift is vast. Example here, it's been through a few auctions, unsold, so comes back at lower and lower prices.

Also Barclays updated their mortgage rates today:

https://www.barclays.co.uk/mortgages/fixed-rate-mortgage/

Some chunky increases.

Notably the 95% mortgage, (despite being guaranteed against loss by the government in the first 7 years) has blown right out and is the most expensive, I am sure it wasn't always like this.

Something I been thinking is that new build flats are/will be the absolute stinkers in banks portfolio; they have a much bigger chance of large hidden remedial costs, increasing service charges act as a brake on capital appreciation, many almost identical ones are being built. 

Maybe more banks will refuse to touch them and they will have to end up in a government-created bad bank.

[spygirl]

4 hours ago, sancho panza said:

Given Natiownides £40bn BTL laon book is 91% IO........what are their options?

Hope their btler have a repayment vehicle in place when 20/25years are up.

 

[Rare Bear]

38 minutes ago, spygirl said:

Hope their btler have a repayment vehicle in place when 20/25years are up.

 

Of course they have. Sell up and pocket the profit from the appreciation.