I took action based on previous advise from my post in Dec 2020 so I would appreciate an updated opinion on current options with some cash and capital loss.
Age: 55 in August
Spouse’s/Partner's age: 52
Annual gross income from employment or profession: 70,000 - unchanged and unlikely to change unless I move job.
Annual gross income of spouse: 70,000 due to a new but much more stressful job with longer hours.
Monthly take-home pay- approx. 7,000 because both of us are maxing AVCs
Type of employment: Both employees in private sector, both of us get a bonus of maybe 10% I think.
In general are you: Saving into pensions. savings and paying capital off mortgages.
Rough estimate of value of home: €700,000
Amount outstanding on your mortgage: €98,000
What interest rate are you paying? Tracker 0.5% on top of ECB to expire in 6 years. Interest only but occasionally make capital payments.
Other borrowings – Only mortgages
Do you pay off your full credit card balance each month? Yes.
Savings and investments: c. 50,000 rainy day fund. Stock: Forgot to include this last time. Approx €60K from employer's bonus scheme, most are eligible to sell.
Do you have a pension scheme? Yes. Current pension funds are valued at approx 300K and 150K. I forgot to include another fund last time.
Both of us making 30% AVCs. I will increase to 35% in August. Employer also contributes 12% and 9%.
Investment Property
Northern Ireland: 2 properties (1 property just sold). Dublin: 1 property.
Northern Ireland 2 tracker mortgages. The apartment is a slightly better rate than the house.
1) Apartment - Mortgage £74K . Purchase £110K, Worth £125K Rent £750 per month. Bank just allowed me to remortgage for 10 yrs on tracker, I was shocked.
2) House 1- Purchased £168K Just sold for £146K - This is the reason for the post. What to do with the funds and capital loss.
3) House 2- Purchased £165K Worth £145K (revised value) Rent £460 per month Tracker Mortgage £70K.
Dublin
Apartment. No mortgage. Purchase €230K Worth €260K, Rent €1250 per month. Management approx €2K per year. Nothing to write off against tax.
Ages of children: 19,16,15.
One of the children is due to start college in September.
One of our cars is getting old and will need replacing in a year or two, so keep cash for this?
Life insurance: Yes significant, with PPR mortgage, both jobs and 2 private policies. Past history of serious illness so spouse keen to keep them all but approx €100 per month.
What specific question do you have or what issues are of concern to you?
I sold the house based on previous advice. Not relevant but had issues with the tenant not paying rent, so I haven't had rent since last September.
I evicted them, had it renovated and just sold for a much higher price than I had expected, probably because I spent £6K renovating. I have proceeds of slightly under £69K from the sale.
We have a significant capital loss on this, £168K to £146K (excluding expenses, probably £5K) and also large currency loss as sterling has depreciated significantly since we bought the property in 2007.
What do I do with this money?
1) Keep in GBP and lodge against one of the Northern Irish mortgages? Trackers are a higher rate than PPR (0.9 on top of BOE rate I think).
2) Convert to Euro and lodge against our PPR which is on a very low tracker. If I do this the rent would not cover all the expenses.
3) Some other investment?
4) Keep some of the pounds with the intention of renovating the other house to sell. This could take several months due to tenant as I would not evict until they had something arranged. The tenant has health issues and has been very good, but they are hoping for a council house.
5) Currency Exposure, How to address?
How to use the Capital loss?
1) Sell Shares in our company bonus scheme? I have been reading other advice here on this issue.
2) Sell Apt in Dublin or Apt in NI which would have a profit. Bear in mind there will be more CGT when the other house is sold. The 2 apts are easy to manage and get good rent which we effectively use to help us max our AVCs.
Age: 55 in August
Spouse’s/Partner's age: 52
Annual gross income from employment or profession: 70,000 - unchanged and unlikely to change unless I move job.
Annual gross income of spouse: 70,000 due to a new but much more stressful job with longer hours.
Monthly take-home pay- approx. 7,000 because both of us are maxing AVCs
Type of employment: Both employees in private sector, both of us get a bonus of maybe 10% I think.
In general are you: Saving into pensions. savings and paying capital off mortgages.
Rough estimate of value of home: €700,000
Amount outstanding on your mortgage: €98,000
What interest rate are you paying? Tracker 0.5% on top of ECB to expire in 6 years. Interest only but occasionally make capital payments.
Other borrowings – Only mortgages
Do you pay off your full credit card balance each month? Yes.
Savings and investments: c. 50,000 rainy day fund. Stock: Forgot to include this last time. Approx €60K from employer's bonus scheme, most are eligible to sell.
Do you have a pension scheme? Yes. Current pension funds are valued at approx 300K and 150K. I forgot to include another fund last time.
Both of us making 30% AVCs. I will increase to 35% in August. Employer also contributes 12% and 9%.
Investment Property
Northern Ireland: 2 properties (1 property just sold). Dublin: 1 property.
Northern Ireland 2 tracker mortgages. The apartment is a slightly better rate than the house.
1) Apartment - Mortgage £74K . Purchase £110K, Worth £125K Rent £750 per month. Bank just allowed me to remortgage for 10 yrs on tracker, I was shocked.
2) House 1- Purchased £168K Just sold for £146K - This is the reason for the post. What to do with the funds and capital loss.
3) House 2- Purchased £165K Worth £145K (revised value) Rent £460 per month Tracker Mortgage £70K.
Dublin
Apartment. No mortgage. Purchase €230K Worth €260K, Rent €1250 per month. Management approx €2K per year. Nothing to write off against tax.
Ages of children: 19,16,15.
One of the children is due to start college in September.
One of our cars is getting old and will need replacing in a year or two, so keep cash for this?
Life insurance: Yes significant, with PPR mortgage, both jobs and 2 private policies. Past history of serious illness so spouse keen to keep them all but approx €100 per month.
What specific question do you have or what issues are of concern to you?
I sold the house based on previous advice. Not relevant but had issues with the tenant not paying rent, so I haven't had rent since last September.
I evicted them, had it renovated and just sold for a much higher price than I had expected, probably because I spent £6K renovating. I have proceeds of slightly under £69K from the sale.
We have a significant capital loss on this, £168K to £146K (excluding expenses, probably £5K) and also large currency loss as sterling has depreciated significantly since we bought the property in 2007.
What do I do with this money?
1) Keep in GBP and lodge against one of the Northern Irish mortgages? Trackers are a higher rate than PPR (0.9 on top of BOE rate I think).
2) Convert to Euro and lodge against our PPR which is on a very low tracker. If I do this the rent would not cover all the expenses.
3) Some other investment?
4) Keep some of the pounds with the intention of renovating the other house to sell. This could take several months due to tenant as I would not evict until they had something arranged. The tenant has health issues and has been very good, but they are hoping for a council house.
5) Currency Exposure, How to address?
How to use the Capital loss?
1) Sell Shares in our company bonus scheme? I have been reading other advice here on this issue.
2) Sell Apt in Dublin or Apt in NI which would have a profit. Bear in mind there will be more CGT when the other house is sold. The 2 apts are easy to manage and get good rent which we effectively use to help us max our AVCs.
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