Time to sell your Buy-to-Let property? A case study-based article

Let us introduce you to Jack and Dorothy*. They are married, both 70 years old, retired, and have two children, James and Emma, who have their own families. As well as owning their home, Jack and Dorothy have a couple of rental properties.

The rental properties have been great over the years, providing them with regular income which they enjoy receiving, and now worth a lot more than they paid for them. However, as they have got older the hassle of dealing with tenants and maintaining the properties has left Jack and Dorothy wondering if it might be time to sell up to make their lives easier.

Jack and Dorothy decided to speak to a financial advisor, Alex, to find out about other investments which could provide them with income and capital growth potential. They were shocked to learn that, due to Inheritance Tax (IHT), the government would be the biggest recipient of their estate on second death, receiving more than each of their children. They were relieved to hear that with careful planning they could not only meet their objectives of generating income and capital growth, but also potentially pass much more of their hard-earned wealth onto their family.

Alex first ascertained that Jack and Dorothy could afford to give up the capital value of the rental properties and still have sufficient personal wealth to cover any eventualities during the remainder of their own lifetimes. The conversation then moved onto discussing the various planning options available to them.

Ultimately, Jack and Dorothy decided they would sell their buy to let properties and use the net proceeds (after costs and Capital Gains Tax) to invest £500,000 into a trust-based investment and estate planning product called a Discounted Gift Trust (DGT). Their main reasons for choosing the DGT option were as follows:

• They would receive a fixed income of up to £25,000 per year for the rest of their lifetimes to replace the rental income. This income would be tax free to them.
• They could reduce their IHT bill on second death by £200,000. Part of this reduction could be effective immediately, with the rest reliant on them living a further seven years.
• Although they could not access the capital value of the investment again during their lifetimes, this capital would have the opportunity to grow in a tax efficient environment before passing to their children and grandchildren on second death.

Alex made Jack and Dorothy aware of various caveats so they fully understood the investment they were making. These included:

• The income they will receive from the DGT will be treated as a return of their original investment. These payments will be tax free to them until they have received the full value of their original investment back.
• The income will continue for the rest of their lifetime providing investment performance supports this.

At Womble Bond Dickinson Wealth we have a renowned team of financial advisors who are experienced in helping clients like Jack and Dorothy meet their goals. If Jack and Dorothy's situation resonates with you, then please do get in touch to arrange a meeting with a member of our team. Together, we can evaluate your financial position, before considering the options available to simplify your affairs and provide for those who matter to you most.

* This article, written by Womble Bond Dickinson Wealth Limited which is regulated by the Financial Conduct Authority, is provided for general information only and reflects the relevant rules at the time of publication in February 2026. Whilst based on real life examples, the clients in this article are fictious and the numerical values used are based on individual circumstance. This article does not constitute any professional advice and so should not be relied on for any purposes. You should consult a suitably qualified professional adviser for further assistance. Please note that past investment performance is not a guide to future performance. The value of an investment and any income from it may go down as well as up over time and investors may not get back the amount originally invested. Care should be taken to ensure that any financial plan and its underlying components are regularly reviewed to take account of any changes such as personal situation, objectives, tax rates and the variabilities of investment performance and associated charges over time.