Tony Gimple, a legal practitioner at estate planning firm Planned Succession, said advisers failing to provide any advice at all on estate planning around buy-to-let investments was rife.
He said: “It’s less about poor advice and more about no advice. Advisers are inadvertently building up significant tax problems for their clients.
“We see this issue most commonly where borrowers have become accidental landlords and then decided to start a buy-to-let portfolio.
“Once they’ve built up a few properties in their portfolio they should be considering holding their investments in a company to moderate future inheritance tax bills for example. But mortgage brokers generally don’t look at this side of things.”
Gimple said he believed the Financial Conduct Authority was too siloed to “expect enough” from advisers that only advise on one product area.
He added: “The ideal model would be for advisers to operate in some form of advice collective including an accountant, mortgage broker, IFA, estate planner and solicitor with the client at the centre.
“But currently advisers aren’t talking to each other and clients can’t be trusted to bring it all together for each adviser.”
Clients with multiple buy-to-let properties should consider setting up an investment company to hold their portfolio, avoiding capital gains tax when properties are sold, instead incurring a lower rate of corporation tax, said Gimple.
He added that shares in the company are also subject to lower rates of stamp duty when transferred and can be passed on after death without incurring such large inheritance tax bills.
Gimple was formerly an estate agent with Legal & General and set up the Chancery Law Group in 1997 – the first unregulated legal services firm ahead of the Legal Services Act that allowed non-lawyers to own legal services firms.
