Capital gains tax is not the only consideration. Over coming years mortgage interest will no longer be tax-deductible, so many landlords with debt are going to have to pay more income tax.
Paying down mortgages with the proceeds of sales could help this.
Mr Cunningham points out that the lowest-value properties in Mr Cook’s portfolio are generating the highest income: his seven studio flats bring in almost a 10pc return before costs.
Mr Cunningham said these should be the last to go.
He said: “If Mr Cook sold his seven most valuable properties, over a number of years, he would be mortgage-free at the end of the period, and own £1.9m properties generating £160,000 of rent.”
Inheritance tax is a further likely problem. Accountants have long pointed out that buy-to-let investors are storing up tax problems in the form of either capital gains tax (if they sell while still alive) or inheritance tax (if they bequeath the properties) and that avoiding both is nigh impossible.
In Mr Cook’s case the inheritance tax issue is made more critical by the fact that he is not married. Upon his death his estate will be taxed at 40pc on the value of assets above the threshold of £325,000.
If he were married, his spouse could inherit unlimited assets tax-free – although they would be storing up a liability.
Using a company structure might help, accountants say, but this could incur further taxes and would require some specialist advice.
Telegraph Money has outlined a number of financial considerations Mr Cook should also bear in mind.
Setting up a company
If Mr Cook set up a company and transferred his properties he would pay 28pc on the gain – in this case the current market value of the properties less than what he paid for them.
Suzanne Briggs, director of Blick Rothenberg, the accountancy firm, said Mr Cook could qualify for “holdover” relief if he could demonstrate he is running his property portfolio as a business. However she warned that this is a “grey area”.
Once in the company, the net rental income and capital gains on future sales of the properties would be taxable at 19pc.