we can't take it with us

Why not sell us and sail around the world? Any company "managing your money" will take a huge %.

Isn't that what an annuity is for?

Sell the lot and use the cash exactly the same way as you would use a pension fund.

If you are trying to avoid CGT on selling (depends on whether this is one large property you live in or a lot of BTL) then I don't think giving it away will help you (unless you give it to a charity). It will still count as a disposal for CGT purposes.

However, it might be possible to sell the lot, pay the lump sum into a pension, immediately take 25% back tax free and use the rest to buy an annuity.

There are rules about how much you can pay into a pension so it may not be possible to pay capital gains in and reclaim the tax paid - you'll have to check.

Tim.

f £2-3m worth of property and with no

The dodge is, I believe, to move to Belgium where there's no CGT.

Daytona

Purchased Life Annuity - URL:

No - it's a simple enough process - anyone can do it. Sign a fixed fee contract that makes clear that the advisor gets no commission. It only costs ~£100 to set up, but advisors will try and charge you 1-3%.

Do you wish to continue living in one of/the property/ies ?

Daytona

Can I be your friend ?

thanks for what help, as opposed to childish suggestions, readers have offered. to answer, yes we want to keep some of the properties till we're gone; and no, selling everything and living off capital is exactly what would be useless as we would only get interest and would lose the benefit of capital. That is the whole point! we are not trying to avoid taxes particularly though of course it must be done in an efficient fashion. Mike

I still don't really understand what you want.

Putting your money into longterm gilts will get you about 5% return. With 2m to invest you'll probably have something like 50k/year after taxes and investing some income to offset inflation. You will also retain the capital so you could decide to either not offset inflation or even use the capital. The value of your gilts will move depending on what interest rates do - if interest rates go up your gilts will go down in value but they will still be paying the 5% of the original investment.

You could leave it in the property. You'll probably be able to make at least 3% rental return after paying an agent to fully manage the properties. So you'll be getting 60k/year. After taxes this will again give you something like 50k/year. This time you should be protected against inflation but you're exposed to the housing market. It's also harder for you to realize your capital to draw it down.

(I'm assuming you don't have pensions etc and this will be the only source of income for both of you, otherwise the tax is going to be higher)

Another option is to buy an index linked annuity. Now (in theory) you've got no risk at all and you know what position you'll be in for the rest of your life. But you won't get as good a return because someone else is taking the risk on your behalf.

There are other possibilities but they're all rather dependent on your tax position and why you want to get out of property. You could have a huge capital gains liability and your best course of action is to go and live in each house for a year (maybe while you go off travelling around the world) before you sell them. So over time you could sell one third of your houses and put them in gilts, one third in annuities and leave one third in property.

If you want some security and some risk then work out what the minimum income you need to survive. Buy annuities to give you that and then make reasonable assumptions with the rest to enjoy life. For example, three of my grandparents died before 75 and the fourth made it to 81. So when it comes to me planning for my retirement I'm inclined to assume I won't live much beyond 80. So, if at 60 I "retire" I'd want to buy guaranteed income to cover my essentials - just in case I make it way past 80 - and then plan to use the rest of the capital so that it runs out around about 80ish.

Tim.

I still don't really understand what you want.

Putting your money into longterm gilts will get you about 5% return. With 2m to invest you'll probably have something like 50k/year after taxes and investing some income to offset inflation. You will also retain the capital so you could decide to either not offset inflation or even use the capital. The value of your gilts will move depending on what interest rates do - if interest rates go up your gilts will go down in value but they will still be paying the 5% of the original investment.

You could leave it in the property. You'll probably be able to make at least 3% rental return after paying an agent to fully manage the properties. So you'll be getting 60k/year. After taxes this will again give you something like 50k/year. This time you should be protected against inflation but you're exposed to the housing market. It's also harder for you to realize your capital to draw it down.

(I'm assuming you don't have pensions etc and this will be the only source of income for both of you, otherwise the tax is going to be higher)

Another option is to buy an index linked annuity. Now (in theory) you've got no risk at all and you know what position you'll be in for the rest of your life. But you won't get as good a return because someone else is taking the risk on your behalf.

There are other possibilities but they're all rather dependent on your tax position and why you want to get out of property. You could have a huge capital gains liability and your best course of action is to go and live in each house for a year (maybe while you go off travelling around the world) before you sell them. So over time you could sell one third of your houses and put them in gilts, one third in annuities and leave one third in property.

If you want some security and some risk then work out what the minimum income you need to survive. Buy annuities to give you that and then make reasonable assumptions with the rest to enjoy life. For example, three of my grandparents died before 75 and the fourth made it to 81. So when it comes to me planning for my retirement I'm inclined to assume I won't live much beyond 80. So, if at 60 I "retire" I'd want to buy guaranteed income to cover my essentials - just in case I make it way past 80 - and then plan to use the rest of the capital so that it runs out around about 80ish.

Tim.

I still don't really understand what you want.

Putting your money into longterm gilts will get you about 5% return. With 2m to invest you'll probably have something like 50k/year after taxes and investing some income to offset inflation. You will also retain the capital so you could decide to either not offset inflation or even use the capital. The value of your gilts will move depending on what interest rates do - if interest rates go up your gilts will go down in value but they will still be paying the 5% of the original investment.

You could leave it in the property. You'll probably be able to make at least 3% rental return after paying an agent to fully manage the properties. So you'll be getting 60k/year. After taxes this will again give you something like 50k/year. This time you should be protected against inflation but you're exposed to the housing market. It's also harder for you to realize your capital to draw it down.

(I'm assuming you don't have pensions etc and this will be the only source of income for both of you, otherwise the tax is going to be higher)

Another option is to buy an index linked annuity. Now (in theory) you've got no risk at all and you know what position you'll be in for the rest of your life. But you won't get as good a return because someone else is taking the risk on your behalf.

There are other possibilities but they're all rather dependent on your tax position and why you want to get out of property. You could have a huge capital gains liability and your best course of action is to go and live in each house for a year (maybe while you go off travelling around the world) before you sell them. So over time you could sell one third of your houses and put them in gilts, one third in annuities and leave one third in property.

If you want some security and some risk then work out what the minimum income you need to survive. Buy annuities to give you that and then make reasonable assumptions with the rest to enjoy life. For example, three of my grandparents died before 75 and the fourth made it to 81. So when it comes to me planning for my retirement I'm inclined to assume I won't live much beyond 80. So, if at 60 I "retire" I'd want to buy guaranteed income to cover my essentials - just in case I make it way past 80 - and then plan to use the rest of the capital so that it runs out around about 80ish.

Tim.

The point of what? Having the capital as property? What if for some reason property became worth a lot less? Having the cash is the best idea. If you can't live off the interest on £2M then I'm sorry but you should be paying for professional legal advice and not asking on usenet.

i'm sorry the whole point of my question seems to have evaded many correspondents. the point is we don't want to be left with any capital when we are dead and gone. amortised into the payments of mostly interest should be repayments annually of a bit of the capital. it's a repayment mortgage in reverse. buying an annuity is half the answer but we want to continue using the properties. these would become property of "lender/borrower" (ie the financial institution) upon our deaths. in case this institution really believed property could be worth nothing in 20 years time say the annual value could be reviewed and adjustments made. upwards or downwards! but, who does this. in france you can buy as property in a formula known as "viager". the properties are advertised as with one tenant (for life) or two. The owners stay in situ and are paid income. obviously the house is cheaper than it would be as an outright freehold. obviously you pay more with one 99 year old tenant than with 2 60-year olds. what we seek is an extension of this concept. mike

So turn it into cash and do that.

Assuming you are 60 now, 2m @ 5% interest will allow a 90k withdrawal a year increasing by 3% every year to last you until you are 90.

A very quick google suggests that you will get about 5.6k per 100k invested in an annuity for you and your wife until the second one dies but this isn't index linked.

A 3% index linked annuity for a male aged 60 pays 4476 per 100k or almost exactly the 90k I calculated above.

I don't understand the tables I've found googling and can't be bothered to work it all out to see what an index linked annuity would cost which pays out at 100% until the second person dies.

An annuity does assume that the capital is used up. Which is why that

Tim.

I've not come across the concept that you are describing in the UK Mike, but you might want to take a look at a combination of reversion (there are several reversion providers) on the main residence and lifetime (interest roll-up) on the let properties (I only know of one company that will do this on let properties).

Regards,

Matt.

That's probably because you gave nowhere near enough information for us to do this.

That the problem you have is that to do what you want you are going to lose a lot of value now. ISTM you would be better keeping the full value the property in your ownership and risk not spending it all. You can, at least give the rest to something that interests you.

You are going to struggle to find someone who does what you want. You may get an IFA to package the bits up separately and present a final solution.

UK tenancy law does not allow a tenancy like this to be offered in a way that is fully enforcable by you.

Most people pay rent for staying in a property. The idea that the owner pays the tenant is most peverse. Yes, I know how you see it that way, but I don't see that a prospective purchasor of the property will. I suspect you are going to have to separate the ownership of the house from the income and in doing so you are going to lose a lot of value.

Schemes exist that will give you a one-off capital sum for your house on this basis. You are then allowed to stay in the house, paying rent on normal commercial terms.

But the sum you will obtain is going to be far less then I suspect you would like.

ISTM you would be better off working out your own figures and taking out a series of lifetime mortgages against the property as you need the funds.

tim

You are out of your mind.

With that amount of property (presumably not just the property you inhabit) you should be able to sell enough to live off the proceeds, or let it out and live off the rental income.

Leave it to a deserving charity, rather than give it to some rapacious financial institution in return for an annuity.

"Tim Woodall" wrote

What do you mean by that? - to what does the "3%" refer?

Oh, and were you considering RPI for the "index"?

I, for one, am not for sale.

Don't know. It's copied from the first website I found when googling for annuity prices. I assumed it means the income will grow by 3% per year to allow for inflation or that it grows by the lesser of 3% or RPI.

Tim.