Not every owner who wants to release capital wants to sell. A portfolio can be recapitalised in several ways, each with a different effect on control, income and tax.
The options
Refinance: replace existing debt, or add to it, with a lender suited to the asset
Sell a minority stake: bring in a family office or investor alongside the family
Joint venture: put part of the portfolio into a vehicle with a capital partner, who funds growth while the owner keeps management
Partial sale: sell the houses or cities that a buyer values most and keep the rest
Sale and leaseback, for owner occupied property
Choosing between them
How much capital is needed, and for what?
How much control does the owner want to keep?
Who will run the portfolio in five and ten years?
What is the tax cost of each route, including on any later sale?
Structure first
Reorganising properties into new companies before bringing in a partner can be efficient, but group reliefs for stamp duty land tax and capital gains can be clawed back if a company later leaves the group, within three and six years respectively. Plan the structure with the end in mind.
We act as adviser, as joint venture partner and as investor. To discuss the options, call James Innes on 020 7850 4760 or email james.innes@chrystalcapital.com.
This article is general information and is not advice.