Portfolio Clinic 

Think before you purchase an additional property

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Stephen, 55

Description

Sipp and Isa invested in funds and shares, workplace pension, residential property, cash.

Objectives

Retire at age 60 on annual income of £50,000, draw this tax efficiently, give three children £30,000 to buy homes, buy holiday home, total return of 7% a year.

<p>Sipp and Isa invested in funds and shares, workplace pension, residential property, cash.</p>

Stephen is age 55 and earns of £150,000 a year. He and his wife keep their finances separate, and have five children from previous marriages who are at university or working. His wife owns their home, which is worth about £500,000 and mortgage-free. He owns two buy-to-let properties worth £220,000 and £210,000, with an interest-only mortgage of £120,000 and a repayment mortgage of £95,000 due to be paid off in 10 years, respectively. The properties generate incomes before tax of £4,000 and £8,000 a year, respectively.

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