This episode explores the power of title splitting in property investment, focusing on how breaking properties into smaller units can boost value and capital growth. Learn how to integrate pensions with property investments, navigate recent tax changes, and avoid common pitfalls to maximize your wealth-building potential.
Title splitting isn’t just about dividing property—it’s a powerful strategy for increasing value, boosting capital growth, and unlocking new investment opportunities. But how do you know if it’s the right move for your portfolio?
In this episode, we explore the key benefits and challenges of title splitting, including how breaking a property into smaller units can lead to higher valuations and greater financial returns. You'll discover why integrating pensions with property investments can be a game-changer, and how recent tax changes are reshaping the property investment landscape.
We also discuss real-life case studies, the most common mistakes investors make, and the importance of strategic planning to maximize profits while minimizing risks.
If you want to make smarter investment decisions and leverage title splitting to accelerate your wealth-building journey, this episode is a must-listen.
Tune in now and take control of your financial future!
Resources Mentioned In This Episode:
>> Rachel Maria Knight [LinkedIn]
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>> Join the WealthBuilders Facebook Community
>> Schedule a 1:1 call with one of our team
>> Become a member of WealthBuilders
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Speaker 1 (00:00.088)
Title splitting is the most long-term thing that's existed for centuries that nobody knows about. It's about taking a freehold of a property and breaking it into lots of different either freeholds or leasehold properties. When we break it up into its smaller parts, it's worth more money. The value of the part is greater than the whole.
Speaker 2 (00:26.914)
Welcome to this week's episode of Wealth Talk. My name is Christian Rodwell, the Memeship Director for Wealth Builders, joined today by our founder, Mr. Kevin Whelan. Hi, Kevin. Hi, Chris. Good to be with you again. Very interesting subject today. Yeah. Interesting things about creativity and property. I'm sure we'll get to. Indeed. Well, for regular listeners, you'll know we're all about the seven pillars of wealth and to really break free of the time for money trap, to enjoy the freedoms in life. You have to make assets work hard for you. And we refer to these assets, Kevin, as
pillars. And we're looking at two specifically today, which is pillar number two, pensions and pillar number four, property. Unusual bedfellows. Often I hear people saying, pensions, property, going together. No, it can't be done. But of course, it can be. And our guest today shows very ably how you can do that. And we've got hundreds and hundreds of clients who've combined the value of their pension.
where traditionally the only option would be the stock market. Nothing wrong with the stock market as an investment, but we know it's got some challenges in terms of it's difficult to get cashflow from. It's more often than not the recurring income that we talk so much about in wealth building is being paid out of your life, not received in to your life in terms of fees to the financial institutions and the advisory community. Anyway, so I think it's
is good when those people who take control of their pension and they choose to invest in assets that they know more about, they invest more time in education about, they take some time to connect with other people about. it's a more immersive experience if you can combine, get leverage on one asset, link it to another if it's an asset that particularly appeals to you.
And I think many people have done it and not too many people do better than our guest today, Rachel. That's right. Our guest today is Rachel Knight, the founder and CEO of titlesplit.com. Rachel's got lots to say, you can tell she's very knowledgeable, very, very excited about the subject of title splits. So we'll head on to our interview now and then Kevin, you and I will be back for our normal debrief after. So let's head on to our interview today with Rachel Knight.
Speaker 2 (02:55.222)
Rachel, welcome back to Wealth Talk. How are you?
Thank you, Christian. How are you?
Yeah, really good. Thank you. It's been a good start to the year, I think for both of us, very busy. And we're going to hear more about that today. So for any of our listeners who perhaps haven't heard of you before, Rachel, tell us a little bit about yourself and your company.
So my name's Rachel Knight. First and foremost, I'm going to call myself a property investor and landlord. So I've got a portfolio of residential properties and I also have a SaaS portfolio of commercial properties. Kevin likes to laugh at because I always say it's the bank of SaaS. I love it. So SaaS has really been life changing for us. So that's our property portfolio. And then my passion, my absolute passion is what's behind me on the wall, titlesplit.com, which is my
training company and we are absolute specialists in training property developers, landlords, SaaS people who need to get into title splitting property. So taking freehold away from leasehold or splitting mixed use or commercial property. And that's what we do. We train people, we provide expert power teams for people and it's a passion because we go really deep. It's not about high level. It's very
Speaker 1 (04:11.8)
process oriented, very, very detailed. And yeah, that's my passion. So I have the property side, which sort of is the, like we all have, I think in our lives, the, the, the bit that's going to pay for the retirement one day. And, know, is there as a, there's nothing, there's no such thing as passive income, but it's a much easier income than the days I worked in the corporate world. And then obviously my passion is driving, helping our clients through titlesplit.com.
Let me just pick up on that, Rachel, because probably some of our listeners now will still be one foot in the job, one foot in building up some asset income. How did you decide when it was the right time to sort of make that jump fully into property?
So it's really weird because I've been talking to my team about this today for them to understand it. What I did is, and my other half persuaded me, my husband Andy, he persuaded me to go to this property event in Nottingham because that's where we lived years ago in 2015 where it was with something with Martin Roberts. These people have gone now. They were called Tigran at the time. And I went along with the view. I'd already got investment properties. I'd already bought some buy-to-lets.
with my bonuses in the corporate job, because I had a corporate job. And I wasn't really thinking about income at the time. And when I went to this two hour event, I realized actually, you know what, you could replace all of your income with property income. And I was literally one of those, and it was quite embarrassing now when I think about it, one of those people running to the back of the room to buy the one and a half thousand pounds worth of stuff. And that day changed my life because ultimately I realized within two years I had...
I didn't work in the corporate world anymore. I'd replace my income with property income and I was running a property business and we've been doing investments in properties since then. So yeah, that's what happened. I mean, I'd always thought like a lot of people, a lot of your listeners have done this. When I was getting my bonuses in the corporate world each year, I'd put a deposit down on a buy-to-let and I'd buy one, but I was a little bit uneducated. I didn't really know what I was doing.
Speaker 1 (06:18.466)
But I was just thinking, I don't want the income from them now because I'll just pay more tax on it, but I want them for my retirement pot. Obviously, I didn't know anything about the great opportunities we have for retirement with SAS and everything then. So that's what I did. Started collecting properties and then I found that it could replace everything and it did. And that's it. Fast forward to today, we then got SAS, which is the icing on the cake for us. It's, you know, that means we've got unencumbered property in there.
And it's fabulous because we're in our 50s, so therefore that pot of money is not that far away for us when we want to decide to take it.
No, it's always fascinating to hear what that sort of turning point, that catalyst is for people. And I suppose that's 10 years on now, right? Time goes so quickly.
10 years on, but definitely the right decision. Andy, by the way, I have to say this, Andy was so reticent to do it. He was the one who dragged me along to it. And then he was like, no, no, no, no, we're not doing this. And I was like running to the back of the room. actually nowadays he said, because when he realized he could move his pension into SAS in his early fifties, he now, you know, if you spoke to him, he'd be like, it's the best thing that ever happened to us. But at that time, he was the one saying, no, we're not doing it. You know, so that's funny as well.
Just ignore 10 minutes of the back of the room.
Speaker 2 (07:32.44)
think it's the perfect partnership, isn't it? Which is why we love working with you because title splitting and SaaS pensions go so well together. But we'd better explain a little bit about both of these before we get into it. So SaaS pension, let's start there. It's a business owner's pension, something that many people never discover. And when they do, it's a massive, aha, light bulb moment, especially if you're property investor, because it just unlocks so many opportunities, doesn't it? It does.
So if I use our scenario, Andy had, I had a corporate pension, a couple of pension pots. you know, if you looked at my background, it's on LinkedIn. I worked for Experian, I worked for Equifax, so I worked in the credit bureaus, had a director role. Andy had 30 years of final salary, pension, non-contributory. And when we moved, we discovered SAS, which is a self-administered pension scheme.
because we're educated property investors, we realized we could do so much more with that money than leaving it with whatever the pensions we were investing in and obviously depending on your risk profile, we're investing our money in and we move that money across. If I said to you, it's tripled our pension capability. the money we could take, we already had, all right, pensions, you know, that inverted commas, but
By the time we're just actually, we're just buying the building I'm sat in now, it will become the title's head office because we're buying it at the moment. It's just going into the staffs. With the income coming into the pensions, just, and I'm just going to say this, just from the income coming into the pensions, if all we ever took was the income annually from the pension, never touch the part of capital because we've put that into property, we would be getting three times more than we were going to get from our corporate pensions. So it's been...
a life-changing thing to do property and then pension as well alongside it. Like, I call it the icing on the cake, really.
Speaker 2 (09:29.28)
It's quite incredible. I've heard similar stories of someone working 20, 25 years in the corporate world, a nice pension, but then coming out, finding out about SAS and within five years doubling the size of that pension.
It's crazy. And if you make the right investments, you'll minimize risk as well and probably the risk profile to take different types of investments. But we're focusing on property right now. But like I said to you earlier, I might move it. We might move into other investments as we go forward.
Okay, so what is title splitting, Rachel, and how does it work in property investment?
Wow, so title splitting is like the most long-term thing that's existed for centuries that nobody knows about. And let me explain it. So typically, it's about taking a freehold of a property and breaking it into lots of different either freeholds or leasehold properties, right? So I'm going to explain it with a block of apartments, okay? If you take a block of apartments that today
by the banks and by the industry as known as a multi-unit freehold block. And that apartment block, landlords generally own them on one freehold, okay? So they never split them, they keep them on one freehold, and that freehold is then, when they go to sell them, they sell the whole thing, so it might have five apartments on one freehold, they'll sell the whole thing to another landlord, okay?
Speaker 1 (10:57.002)
Now, like many things in life, and actually we can talk about commercial property in the same way, when we break it up into its smaller apartment sized parts, it's worth more money. So the cost, the value of the part is greater than the whole, right? And why that is, is because it's how our banking system values property. So the way that our banking system works is if it's an investment property, i.e. it can only be
bought by an investor, a landlord, a property developer, i.e. maybe a commercial property or in this instance, a block of apartments. So we'll keep with the same five apartments. We've sold a whole, we get a wholesale discount, but also the banking system values it as a hybrid commercial property. I'm saying hybrid commercial because it is actually residential, but they give it a commercial type valuation, okay? And they do that based on its rent.
that you're getting from the tenants who are in the building and it's yield in the area. Okay. Now that's one way of valuing property and that does not grow in line with capital growth because rent doesn't grow in line with capital growth. So it's impact and it's also impacted by interest rates and all those sorts of things. So for example, as our interest rates went up in the last few years, the yields in areas went up.
And that meant some of these commercial property values went down. Okay. So that's, that's how it works. I'm not going to explain the whole financial system to you, but that's how it works. Secondly, we move over to the other side. Properties that we live in our house is that valued based on local comparable valuations in the area. Now I'm going to say a word that Ricks surveyors hate, but property investors call it Rick's and Morta.
Right. So it's the professional term is comparable values, but property investors often know it as bricks and mortar. So this is bricks and mortar valuations. Now in title splitting residential property, that's generally 25 to 35 % higher than the commercial valuation. Now, what I want to say to you, even if it isn't a lot higher, once it's now saleable to individual owner buyers, and this is the key,
Speaker 1 (13:22.784)
alongside other locally comparable properties, Its value will grow in line with capital growth. So if you want capital growth, that's how we can get it by doing title splitting. Now, I'm going to give you a different example now. In commercial property, we might create smaller units. So we might buy a big shed, right, for example. And I want you to picture a shed with
You know, these days they're building the great big distribution depots. But in the olden days, you'd go to the distribution depots like a building with lots of little red doors going along the side. I don't know if you can picture those. And these old buildings, for example, what's going to happen to them now? I'm just giving you an example. What you might do is break those doors. You know where the doors are at the front? They were the loading bays. They might be broken into smaller units. Now, in commercial property,
by splitting them up that way, we make the unit worth more per square foot than it is as a big shed, right? So for example, we've got a lovely commercial building. It's a CMO, it's got seven commercial tenants, and the smaller units rent for higher cost per square foot than the larger units. So title splitting gives us access to higher valuations, and that's why we do it. Now...
What's typically been said is don't title split till you sell. But I'm going to say, why wouldn't you want that equity in your portfolio during ownership? Because when you sell, you will have to sell the block to another landlord. So you need to title split early and decisively to make this work and get the extra capital or higher commercial values.
So am I right to think that this is something that only a more experienced investor should be looking at?
Speaker 1 (15:20.406)
You are. We tend to work with people who've already got some property or they've been educated. We do have beginner education, but our focus is about helping people to title split. For example, we help investors to title split commercial property away from residential. We call this mixed use property. And I mean, for people who are looking at properties out there,
you'll see there's a lot of mixed use property on the market. It tended to be a shop downstairs with flats above or even a shop with offices above that could be turned into flats. Okay. And some of that can be done under permitted development, which is a whole different thing to talk about. But literally what we do is we teach the property investors to split it away as they buy. So for example, we could have the commercial property going into one company.
maybe a SaaS or maybe one company and the residential property being split off as individual apartments so that we can get those additional valuations on top, the 25 to 35 % capital uplift.
Now I've seen some of the events you've been running this year, Rachel, packed house as usual. And I know Kevin is a firm favorite as well with your. Yeah. some of the things that you do at those events, I know people throw deals at you and you put your brain to work and start analyzing and figuring out how they can split things up. And, you know, if a SAS is suitable, then how to put that into the SAS as well. If you've got any examples you can think of, which might be good to share.
He a lot of sparks at our event.
Speaker 1 (16:58.958)
got a lovely one. we are, I do get, it's something I was talking to you about. I get people come along. So our Dream Clients event, which is sort of our client events. So once you're a client of ours, you get to join our community. And what happens is you come along and we analyze live deals. And this is a live deal that I thought because you guys are so involved with SaaS, it would be nice to give you an example that involves SaaS.
I am
Speaker 1 (17:28.341)
Okay. So I need you, need you, you read this out or your listeners now to get a pen because I am going to throw some numbers at you and, you might need to think about it afterwards. I'll list again, because you know, people, some people love numbers and some people hate numbers. So we met a landlord, okay. Who came to our training because he realized he had a block and he didn't know what to do with it. And he also realized that this was a really good opportunity for the future. Now he just got a SaaS.
He just set up his SASS and he had £100,000 in his SASS. So it wasn't a massive pot of money, but he was a landlord and he had other assets. Okay. So he came along and he got this property that the family had owned for years and it was now fully his, this particular property. And it was five fully let commercial units on the ground floor. So when I say that, they were shops. Okay.
I'm not going to say the part of the country this is in, but it was in the Midlands rather than... I'm not going to say towns or anything because that would be wrong, but it was in the Midlands rather than being in London. Okay? Also, above those five fully let commercial units, recently developed and refurbished four fully let residential apartments. Okay? So they'd been shabby old apartments before and he just refurbished them all to today's standard. So...
Quite nice standard, good kitchens, good bathrooms, nice homes, but he was gonna let them out. Now he'd just had a valuation by a commercial bank of 750,000 pounds. So this is five commercial, four residential valuation, 750,000 pounds, right? So some people might think that's a lot, it's not. This is a really poor valuation. And this is because it was based on his commercial values.
and his rent and yield on residential, okay? So I then said to him, if you were to sell these apartments individually in this area, how much would they be worth? So he said to me, well, the local valuations, similar apartments are going for 175,000 each. And remember, there's four of these apartments.
Speaker 1 (19:49.614)
So the four apartments alone add up to £700,000. Now, the bank had just offered him a 75 % mortgage, commercial mortgage, on the £750,000 valuation for the whole block. So it's counted as an MUFB, a multi-unit freehold block. And I said to him, whatever you do, do not take that mortgage because...
you are going to leave a lot of money in this property for the next five years that you don't need to and we're going to title split it. Okay. And what title splitting means is we're going to grant leases for the four apartments and that means sell. So grant leases means sell. So the four apartments are going to grant leases and we have to do that to another company. Okay. So the leases are now granted to the other company at 175,000 each. Okay.
Yes, he has to pay a bit of tax on that, but bear with me here, because that's sort of irrelevant at this stage, OK, because of the money he's going to make out of this. So what he does is he grants leases at seventy five thousand. I can't help it. I'm a lady who likes my calculator when I'm doing these things, because I'm used to doing it live in the room. So he's now got seven hundred thousand, right, times by seventy five percent. So that's the mortgage you can get. So we can still get.
525,000, the same amount of money, because sorry, the last mortgage was 70%, he can still get 525,000 just for the flats. But hang on a moment, he's still got five commercial units at the bottom, okay? He hasn't done anything with those at the moment, okay? So I said to him, how much, it's hard because he's now gonna be cost per square foot.
and based on the rent he's getting on the units, how much do you think these are worth? And he said, maybe 100,000 each, right? So I'm taking this from the landlord, he knows his property better than I do. He said, 100,000 each. I said, oh, that's interesting. You've got 100,000 in your SaaS. And he said, yes. I said, what if you sold one of those to your SaaS for 100,000 pounds? He went, yeah, but I've only got enough money for one. I said, bear with me, just bear with me, okay?
Speaker 1 (22:10.734)
I said, when was the last time you paid money into your pension from your limited? By the way, these were in a limited company. I do need to say this building was owned in a limited company. This is important, right? Because if you own it in your own name, it's different, but this was owned in a limited company. So I then said to him, okay, so you've sold those over to this company for 525. You've got the mortgage for 750, 700. You've got the mortgage over here for 525 in this other company.
You've put this one property into your SaaS. said, but you know, you've now got profit in this company for this transaction that you've done already. He said, yes. I said, well, you're going to pay yourself a load of money into your SaaS as pension contribution. And has you haven't done that for four years, because he's a landlord, he's not paying into his pension pot. I said, that's probably 200,000 pounds. So now you've got 200,000 in your SaaS, right?
And he said, wow, I went tax free, because that's not going to cost you anything in tax. So you're going to save corporation tax on that money because you've now paid yourself the money that you can pay into your pension. Because at the moment, guys, you can pay 60k a year into your pension tax free. As we speak today, who knows what the chancellor does in a few weeks time.
Okay, but that's as we speak today. So today we can pay 60,000 a year. So he's paid 200,000 because he's backdated it toward the years into his pension. That's something you can speak to the wealth builder guys about. Okay. And then now he's paid 200,000 in there and he's saved over 50,000 in tax. So that's the first thing. That's a nice tax saving. Now what we do next is we buy another two of these properties into the SAS.
taste.
Speaker 1 (23:59.926)
So he's now got three properties and their rentals. So we do that by granting leases again, right? And those rentals are now being paid into his SaaS, which yes, you guessed it, is now tax free. It's free of corporation tax, right? So let's tell you this. This is how we help our customers structure deals. So at this point, he said, I'm a chartered accountant.
And I chuckled because I said, okay, well, here's the thing. You've now got two other properties, but I want you to understand instead of his building being 750,000, if you add the five properties at the bottom and the four together, it comes to 1.025 million. So he has got a huge amount of different valuation and capital by title splitting.
Does that explain how titles playing works?
That's a fantastic example. It really is. And why was it so important that that was owned in a limited company then?
The reason is that to pay himself pension, I'm not aware, unless you can tell me something different, Christian, because this is your area of expertise, that I can pay myself the pension out of my private funds, but you might be able to tell me something.
Speaker 2 (25:17.176)
Yeah, we'll get Kevin's expertise from that one afterwards, think.
And I think that's a question for Kevin because I'm not a expert. I'm just a lady who happens to have a SAS. And also, I'm an expert at structuring title splits, which involves structuring them into SAS. But I'm not the in and out of SAS expert.
But what a powerful example there. mean, and hey, in probably five to 10 minutes, you blew the room away, I'm sure with that.
I love it!
is it's just when I get to show people this stuff, and let me tell you, it's so hard to do, but we show people how to do it. And we then give you people that can help you do it, like solicitors and everything else. But I think the thing is, that man was just blown away because he just couldn't believe that. the thing is, that's why we specialize so much in one thing, because this has got many facets to it. And putting stats alongside it just gives it.
Speaker 1 (26:11.628)
Like it's the holy grail, it's the icing on the cake, it's amazing.
So you mentioned tax in that example. So let's talk about this. There's been some changes recently, How's this impacting things then, Rachel?
It's impacting all property investors. So one of the really scary things, we're set in February 2025 now. In October 2024 and June 2024, there were some tax changes that were implemented for SDLT, Stamped Duty Land Tax, by HMRC, particularly by the Labour government. And let's be fair,
Every single time I walk into my training room with a room full of property investors, I ask this joke question, who voted Labour? And nobody puts their hand up in my room. So I'm not getting political, but property investors particularly know that we're at the end of the stick in terms of the beating that tax is going to give as our business owners with the recent changes in NI. So let's just talk about this.
What was published as a headline in October 2024 was that property investors would now go from paying a 3 % additional tax for buying investment property or residential investment property to 5%. That was the only thing that was said in the budget. But when you actually went into HMRC and looked at the SDLG rules, and you can do this for yourself by going in and putting in stamp duty land tax calculator,
Speaker 1 (27:42.86)
and you can go or stamp duty land tax rules, but make sure you go into the .gov because there are companies out there who try and catch you paying them money. Make sure you go into the .gov website and it will explain to you some of these things, but they are very complex. This is the hidden bit that wasn't shown. We used to have something called linked transactions on multiple dwellings relief where if transactions were linked together and more properties were involved, you've got tax reliefs on that.
And that was up to June. And there are still some tax release available. Like, for example, as I speak today, and I'm always going to say that, I dated this on purpose. Because if you're listening to this in 18 months time, you can't assume that's the rule then because the government's changing it. I mean, literally, they announced on the 30th of October and it was in place that night at midnight. So things can change that fast. So what they didn't tell you at the headline level,
was that instead of now link transaction relief, reducing your stamp duty land tax SDLT, you are now going to link transactions together to increase it. And I'm going to explain how. So I use the example of this particular landlord if he was selling those properties one at a time. And Christian decides to buy them one at a time. So Christian buys one of his properties the first time for 175,000.
Right. And Christian moves in with his family and that's his new home. And then a year later, he goes back to this landlord and says, I'll buy another one and I'm going to rent it out. So he buys that one and he pays an additional 5 % stamp duty. And then on top of that, government and now the HMRC will now add those two transactions together, right, which will now hit a higher tax bracket for SDRT.
and they'll charge you the SDLT on the first and the second transaction. So you'll now earn more tax on the first transaction that you've already paid. Then a year later, Christian comes and says, I'm going to buy another one of these as an investment, right? They add the three together. And then a year later, we buy another one. They add the four together and so on. And that happens until we get to 17 % SDLT, right?
Speaker 1 (30:08.494)
So the base level is a couple of percent and we get to 17 % SDLT. This is rather scary. So what this will do is it will put landlords, will put, it's designed, let me tell you, they haven't said why they've designed this, but it's pretty obvious. It's because they believe that we should, the landlord should be selling those properties to individual owner buyers. Now we know that's fraud.
And I'm going to say it's flawed because that's assuming that everybody who rents a property can afford to buy a property. And that simply isn't the case. Okay. So all renters either don't want to buy or cannot afford to buy. Now, a way to get around this is to buy a company. But when you buy a company, you buy liabilities. So I'm just going to say, I'm not going to say this is the way to get around it. I would absolutely tell my clients that due diligence on this because
When you buy a property, you buy a property. When you buy a company, you buy the liabilities of the company, right? So, and the tax will be lower in that instance. there's a real, and that's assuming the landlord wants to sell all the properties in one go. Landlords often sell their portfolios over a number of years, but if they sell them to the same person, every property to the same person, then they're all going to get linked together for SDLT purposes.
Not something you hear many people talking about that, it?
because they don't know about it. It's a bit like nobody's talking about the bad news. However, can I just go back to if I'm going to make 35 % additional capital uplift on day one, my title split in a property, and I have to pay an additional five or 6 % in tax, I'm going to say so what? Because now my property is going to grow in line with capital growth. And when we sell a property, we don't pay SDLT.
Speaker 2 (31:57.806)
I think there's a lot of things here that if you're not fully educated, you could slip up on. There's the whole side of pensions, understanding SAS pension rules and being a responsible trustee, but then of course title splitting coming with lots of nuances, lots of tax implications if you don't do things right. What are some of the common mistakes that you see people make, Rachel?
So actually, the biggest one is property investors think, I'll get a deal, buy it, and then I'll work out how to title split it. So they might go off and buy a shop with two flats above, and they think, I'm not going to worry about it, I'm just going to buy it it is, and then I'm going to title split it. Now, what I'm going to come back to tax again, right? When I buy a property, I pay stand duty land tax.
When I title split a property, so I split some off into the SAS, like that deal I just showed you earlier, and I split some off into my prop co, I also pay stamp duty lamb tax again. So if people are educated and have the right power team, and it's not just a solicitor, it's a whole team of individuals around them, which we provide to our clients, then they will title split on the day they buy it. So that means they'll pay one lot of tax.
Now, these transactions I was talking about here are small, but I see deals. So if I see a London deal, for example, if somebody bought a block of 15 flats in London and didn't split them as they bought them, right, and the second lot of SDLT could be hundreds of thousands of pounds. Now, there is still a relief available where if we buy over six properties, residential properties together, it's classed as commercial today.
It's available today as we speak. I don't know that it was because they missed it, right? I just don't know. So what we can't rely on is those things being available to us in the future. If we split as we buy, we minimise all our costs, we put it into the right financial structure and we go forward with individually held properties in our company structure or our portfolio as we see fit.
Speaker 1 (34:15.158)
It's particularly important when you are trying to put something into a SAS because you can't put residential property into a SAS. It's particularly important if you want to save yourself tens, if not hundreds of thousands of pounds. So we see people, it's worse than that though. We've seen people who've bought a property, realize they're struggling to work out how to split it and then come to find us. And we realize, for example, a 68 year old person's bought the property.
on land with multiple outbuildings that have been developed in their own name. So now we've got capital gains tax. Now it's in the wrong company structure. Now we can't get it out into a complete and utter nightmare. And so what we do is we teach people to structure it right from the day they buy it. And then if you do that, and we call it reversing into the parking space. It's very simple. If you reverse then you can drive out. If you don't reverse in, you
what will end up happening. We hear this a lot. A lot of people say just split when you sell. Well, that's okay, but that's not possible. If you own a block of apartments, when you go to sell it, are you really going to clear all your tenants out to sell to individual owner buyers? And will your bank let you reduce, do something we call reducing security, one property at a time, sell one property. They won't. So you're going to end up having to get a bridging loan or put your own funds in to sell it. So,
It never happens and they end up just selling the block. Another one, God, there's so many, another pitfall is if you don't do this properly as you buy it, people buy blocks where say one flat has been sold off and then they can't get finance because it's a broken figure. So there's so many mistakes that people can make. So we teach them to reverse into the parking space and split as they buy.
clear to see your passion and your expertise in this subject, Rachel. And final words, suppose, for anyone listening now who's in property, they're feeling like it's just getting tough. They're not really sure which way to turn. Perhaps they're sat on a pension. They don't realize they could unlock that. What would be some final words for our listeners?
Speaker 1 (36:25.742)
So I'm going to say, I'm going to come back to why I started doing title splitting in 2017. My mentors that I'd invested all this money in the training couldn't show me how to do it. But I realized there was such a massive opportunity that is just growing and growing. And there are currently over 500,000 blocks of apartments and mixed-use properties in the UK with more than one address on a freehold, right? Over 500,000. At least 214,000 of those.
are owned by private landlords in their own names or in small limited companies. Many of those landlords are looking to exit and it's a huge low hanging fruit opportunity. There's also the opportunity to convert commercial property into residential property. Another low hanging fruit opportunity. Those who are early adopters are taking advantage of this. I'm going to say there's a lot of
saturated property strategies out there. I'm going to talk about service accommodation being an example. In some areas, I've read recently that, you know, I love Cornwall, for example, I absolutely love Cornwall. But we had a bit of a rush on service accommodation during the pandemic of COVID. And what's happening now is people are going back abroad. So those properties are now having void. the invest and the tax regime is changing. So those properties are also feeling much
higher tax rates, the people who own them in their own names, and they're trying to sell them. So there's a glut of properties coming onto the market. So there's strategies like that that are more problematic in some areas, not in all areas. Some areas are still thriving, so I'm not saying it's all doom and gloom. You need to find things that are going to take you forward with momentum that give you an opportunity to do it now. If you've got money sat languishing in a bank on a pension, if you've got extra profit in your company,
Why aren't you putting it into your pension and then utilizing it to potentially do property? Because that's what I say. You know, I speak to business owners all the time who don't realize they've got excess profit in the company, but they're not paying the maximum contribution into the pension. They just don't understand that that's what they should be doing. And so, you know, these things are there to help you change your life in the future.
Speaker 1 (38:44.534)
And I think education is key, working with people who help you to understand how to do things like with wealth builders and like with us at titlesplit.com.
Been great, as always, speaking with you today, Rachel. Where should people go if they want to find out a little bit?
So we have, you can go to Wealth Builders and we are a partner of Wealth Builders and we've got free webinars on Wealth Builders in there. So I'm actually going to say go to Wealth Builders, look on their partner page, see us there. We do have a website as well, but I say go to Wealth Builders because actually savvy investors are investing in their education and are investing on learning how to do things properly. And, you know, I see a lot of things out there going, don't pay for education. Well.
If it's going to do what it's going to give you the future that you need. If you're going to invest your sass in something, go and find out how to invest it properly. If you're going to invest your pension and if you're to do property, make sure you're doing it properly because getting mistakes cost you hundreds of thousands of
Thanks so much, Rachel.
Speaker 1 (39:42.158)
Thank you, Christian.
Speaker 2 (39:46.286)
Hey, always good to speak to Rachel. she talked about some interesting things there, Kevin, and I think we can pull apart some of those in just a moment. And I'll just say there was a lot of mention of tax there. And as we say at the beginning of the podcast, Kevin, you you must get your own professional advice when it comes to these things. I think it's really important that as you build wealth, you know, you're always going to have the pervasive tax, which is going to apply everywhere.
Property in particular is an interesting one because wherever you look, governments try and intercede and get involved with trying to tax property, often with good consequences in terms of revenue, but interesting consequences in terms of creativity. Smart people are always creative. You don't just accept things, you react.
positively to things. So while you might not be a tax expert, you need to pay attention to tax. I don't know if you've ever been to Peru. I know you tend to go to far-flung places, Chris. Apparently in Peru, the taxation of property there is actually based on the number of complete floors you have in your building. Smart people, what do they do? They build an absolutely amazing ground floor and then they build up, but they don't quite finish the other floors.
You know, so they leave something that means it's not complete to minimize tax. All sorts of interesting things when it comes to taxation and property and Rachel's creativity is outstanding. I don't know anybody better than Rachel at being able to turn and create value from something that looks like it should be valued at one figure, but a bit of legal work and a bit of creativity applied and then enacted upon.
gives you a much higher value, both in terms of capital value and cashflow as well. And I think she demonstrated that ably with examples today. she certainly did. And I'd certainly want you on my quiz team, Kev, if it came to it with all of those facts there. Well, if you ever find yourself on who wants to be a millionaire, put me down if you're following the frame right.
Speaker 2 (42:06.828)
Yeah. So Rachel, of course, the expert in title splits and did give us some really good examples of the possibilities and the opportunities that are out there. You mentioned there's half a million properties in the UK that are just ready for title splitting. However, the other side that we were talking about was leveraging your pension. And the example mentioned one of her clients who perhaps wasn't aware that he could go back several years and if he hadn't used up his full pension,
contributions, then he could almost kind of mop those up. And that allowed him to purchase all of his units there, all of his commercial units. And because they were inside the SAS, there was no tax to pay and there was no corporation tax to pay on the profits. But it's more than that, Chris. Think about this.
If you put money into your pension and for the first time ever, perhaps you can get excited about pensions. And certainly SAS does that. I'm a SAS holder as you know, and I'm very excited about that. And if you want to buy property, the government's going to give you 25 % tax back.
So if you think about the words and just apply the creativity to the words, if somebody gives you tax back on something you bought at 25p in the pound, then it means you paid 75 % of its value. So that's a discount of 25%.
Why wouldn't you think about that and get a discount on buying property of 25p in the pound? So instead of the government taxing you, like the examples I gave in fun, they're actually giving you tax back in order to buy them. I mean, it is crazy and it's not a loophole. It's not a scam. It's just normal stuff that smart people do with their pensions where they can build assets that can create.
Speaker 2 (44:12.256)
much more. It's not just you buy an asset like a stock market fund and the fund goes up or it goes down. You're actually adding your own intellect, your own relationships, your own education to create more value. And you compound that with the tax relief you get. And you can compound that with pooling money together with other people. Because there's those who know about SaaS, you know, realize you can actually combine your money.
with your spouse's money or business partner's money or life partner's money or other people's money. And the more you can do that, the more money you've got available. And the more money you've got available, the more deals you can do. So I think there's some smart things going on in Rachel's community. I must tell you a story, Chris, about Rachel. If you've ever met her in person, I mean, she's a wonderful, large and live character. And she invited me to speak at one of her events.
And, for the first time in my life, somebody had written the word SAS on a flip chart. They'd had a meeting and they were talking about stuff is as their group. And I came in later in the afternoon. And when I walked in, I saw the word SAS and some case studies already on there. And I've never been to a meeting where SAS has been discussed before I've even got there. Usually I'm the person who introduces the concept.
But Rachel had done such a great job. the example that they were sharing was just incredible power that someone had combined their pension knowledge, turned their pension into an action, turned that action into property, turned that action into property with title splitting. And the combination was so hugely powerful. You can double, triple, quadruple your pension in very short order. Notwithstanding, you have to understand what you're doing.
understand risk and you have to manage risk and all those things. I'm not saying that any solution is a panacea for all people. There's no one solution and there's risk in everything. But the opportunity to double, triple your pension in a few years as opposed to wait for 35 years and hope is a very powerful concept that I would encourage people to have a look at.
Speaker 2 (46:31.66)
Like to finish today, Kevin, with reading a review. And it's a really lovely one that's come in actually. And Rachel talked a lot about the importance of education as we obviously are big advocates for. we've had a review on Trustpilot, no name here, but a rare gem in wealth building is the title. And it says, it's not often you come across someone in the wealth building space who genuinely puts integrity over profit. But that's exactly what I experienced with Kevin Whelan and wealth builders.
Unlike many organizations that desperate for your money, promising they can meet all your needs and solve all your problems, Kevin took a completely different approach. After an honest conversation, he told us we were already on the right track with our wealth building goals and that his services weren't necessary for us. And he could have easily said, yes, you're on the right path, but with us, you'll get there faster and better like most companies do to make a sale. Instead, he was upfront and didn't sugarcoat anything. No dream selling, no pressure, just pure honesty.
His seven pillars of wealth building align perfectly with what we're already implementing for generational wealth. And rather than trying to take our money, he simply reinforced that we're doing the right thing. If you're looking for someone genuine, knowledgeable, and truly committed to helping you succeed, I highly recommend wealth builders. You won't find gimmicks, just real guidance from someone who actually cares. know, it's nice to know that people are willing to put pen to paper or fingers to type boards or whatever, you know, and just
give us a review and I'm grateful for that. And I think whether people do the review or not, that's exactly the approach we take. So yeah, maybe it's a good fit and we're always happy to spend time, send resources to people, have conversations, always looking to make sure that the outcome that is the best one is the one that's received by the client or our members as we prefer to call them, of course.
And not everybody's the right fit for us and we're not the right fit for everybody. So I think we know when we are. And if I think they're already on a good track, I'll maybe make a suggestion or two and that's fine. But they don't need to engage with us in any form of formal capacity if it's not required. So, you know, I appreciate the, I know who it is and if they didn't put their name to it, I'm not going to say who it is, but nonetheless, you know, it was a husband and wife.
Speaker 2 (48:54.83)
combination, and I know who wrote that now by the tone. It was the wife in the equation there. So it's great. And, you know, I thank anybody who takes time if they're not a good fit for us or we're not a good fit for them to say, yeah, but they appreciated our integrity. Well, we've got lots more wonderful guests coming up over the coming weeks and can't wait to bring them to you. But if you enjoyed listening to today's episode, then please do hit the share button, send it to a friend.
And Kevin, we'll be back same time, same place next week. We will indeed, my friend. And until then, see ya.
Speaker 1 (49:33.934)
We hope you enjoy today's episode. Don't forget that we are constantly updating our resources inside the WealthBuilders membership site to help you create, build and protect your wealth. Head over to wealthbuilders.co.uk slash membership right now for free access. That's wealthbuilders.co.uk slash membership.