# Asset rich & income poor



## spanners (22 Jul 2017)

*Age:*
41
*Spouse’s/Partner's age:*
29

*Annual gross income from employment or profession:*
approx E20,000
*Annual gross income spouse:*
E0

*Type of employment:*
freelance creative - unstable!

*Expenditure pattern:*
Prioritise the essentials, no saving.

*Rough estimate of value of home*
E1,000,000
*Mortgage on home*
0 - inherited.

*Other borrowings – car loans/personal loans etc*
None

*Savings and investments:*
£175k STG in UK Managed Share portfolio, all income currently reinvested

*Do you have a pension scheme?*
No.

*Do you own any investment or other property?*
No.

*Ages of children:*
1 + trying for another

*Life insurance:*
None

*What specific question do you have or what issues are of concern to you?*

Income is low and sporadic, which is currently manageable as we don't have high housing costs or a champagne lifestyle. But longer term we cannot afford to have €1m in an asset which is earning nothing. 

My income not likely to grow significantly anytime soon, neither is my partners as she is keen to remain a full time mum.

Property value is approx €850k house on 1 acre + €150k remaining land; the 850k is subject to Dwelling House relief restrictions meaning if I sell it I have to reinvest the entire proceeds in a replacement PPR. These restrictions expire in 2021.

Currently considering selling property + land and replacing it with something I can earn from, eg something with a basement/self contained unit to rent for Airbnb or rent a room relief. The land has reasonably strong capital appreciation prospects in medium term. Breaking up house and land, eg sell a couple of acres I think will harm the prospects.

I realise these are golden worries, but just wondering what other folk would do in this situation?


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## Brendan Burgess (22 Jul 2017)

What is a UK Managed Share Portfolio and how is it taxed?

As a married man with a low income, you should make sure to maximise your taxable income from your investments as you won't be paying much tax on it. 

If your portfolio is some sort of fund which pays tax within the fund, then it's not suitable for you.

As you are living and working in Ireland, you are better off having your assets in euro rather than sterling. 

You should get this money over to Ireland as efficiently as possible and probably buy some high yield shares with it. 

Then in 20121 sell the current property and trade down to a more affordable house. 

Brendan


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## spanners (22 Jul 2017)

Brendan Burgess said:


> What is a UK Managed Share Portfolio and how is it taxed?
> 
> As a married man with a low income, you should make sure to maximise your taxable income from your investments as you won't be paying much tax on it.
> 
> ...



The shares are just a portfolio which is actively managed by a UK investment company. Currently tax paid in IRL on the income that is reinvested, and CGT in IRL on any disposal. No UK tax liability.

My concern about moving that into € now is obviously the current value of STG. 

In 2021 would you top up the suggested high yielding share portfolio with the balance of proceeds from property sale/purchase?


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## DeeKie (22 Jul 2017)

Is there nothing to do with the 150k land to make it income earning? Like set it? Put forestry on it?


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## major (22 Jul 2017)

DeeKie said:


> Is there nothing to do with the 150k land to make it income earning? Like set it? Put forestry on it?


More than likely,they are in a city or large town


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## RedOnion (22 Jul 2017)

spanners said:


> The shares are just a portfolio which is actively managed by a UK investment company. Currently tax paid in IRL on the income that is reinvested, and CGT in IRL on any disposal. No UK tax liability.
> 
> My concern about moving that into € now is obviously the current value of STG.



Is the fund invested solely in GBP denominated shares, or in global equities?

If GBP only, you've likely got a massive exposure to the fate of UK economy.
If global, depending on the FX hedging in place (if any) it might not make any difference ling term if you switch them to EUR now. 

To explain, if the underlying shares are USD equities, instead of converting USD to GBP, you'll be converting it to EUR. In that situation, your real exposure in in USD.

If it's a fund there might be some FX hedging in place, but you'd need to investigate the exact nature of investment.


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## spanners (22 Jul 2017)

DeeKie said:


> Is there nothing to do with the 150k land to make it income earning? Like set it? Put forestry on it?



Unfortunately not.


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## spanners (22 Jul 2017)

RedOnion said:


> Is the fund invested solely in GBP denominated shares, or in global equities?
> 
> If GBP only, you've likely got a massive exposure to the fate of UK economy.
> If global, depending on the FX hedging in place (if any) it might not make any difference ling term if you switch them to EUR now.
> ...



The vast majority is GBP equities, some UK Treasury bonds.


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## Purple (24 Jul 2017)

Do you qualify for Family Income Supplement?


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## spanners (24 Jul 2017)

Purple said:


> Do you qualify for Family Income Supplement?



No, I'm self employed. And I would not be too comfortable claiming it if I was.


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