Ltd SPV for buy-to-let
A Special Purpose Vehicle - a limited company that exists to hold property - can be more tax-efficient than owning in your own name. It is also not right for everyone. We give landlords around Bournemouth, Poole and Christchurch a straight answer first, and only then set one up.
Who this is for
- Higher-rate taxpayers losing out under the mortgage interest rules
- Landlords buying their next property and deciding how to hold it
- Investors building a portfolio who intend to reinvest rather than draw the income
- Couples and families planning how to pass property on
- Existing company owners with surplus cash looking at property
What's included
- An honest assessment of whether an SPV actually helps in your situation
- Company formation with the correct SIC codes lenders expect (68100, 68209, 68320)
- Share structure set up with the future in mind, including different share classes where they help
- Registration for Corporation Tax and, where relevant, VAT and PAYE
- Annual company accounts and the Corporation Tax return
- Confirmation statements and Companies House filings kept up to date
- Advice on getting money back out - salary, dividends, or directors loan repayment
How it works
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An honest look at the numbers
We compare what you would pay personally against what you would pay through a company, including the cost of running it. If personal ownership wins, we say so.
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Set up correctly
If an SPV makes sense, we incorporate it with the right SIC codes and share structure, register it for Corporation Tax and get you ready to approach lenders.
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Run it properly
Annual accounts, Corporation Tax, confirmation statements and ongoing advice, on a fixed fee. You concentrate on the property.
What to weigh up before you decide
In favour: a company pays Corporation Tax on profits rather than income tax at your marginal rate, and mortgage interest is a normal deductible expense rather than a restricted 20% credit. If you are reinvesting profits into more property, that difference compounds.
Against: buy-to-let mortgages for companies often carry higher rates and fees. Taking money out means dividend tax on top of Corporation Tax. There are accounts and filings to pay for every year. And moving an existing personally-owned property into a company is a sale - which can trigger capital gains tax and stamp duty, and is usually the point where an SPV stops making sense.
Company accounts are due at Companies House nine months after the year end and Corporation Tax is payable nine months and one day after it, with the return due at twelve months. Late filing penalties start at £150 and escalate.
Common questions
What actually is an SPV?
An ordinary limited company set up to do one thing - hold and let property. Lenders like the simplicity, which is why buy-to-let mortgage products for companies usually require one.
Can I move my existing properties into a company?
You can, but the transfer counts as a sale at market value. That can mean capital gains tax and a stamp duty charge for the company. For most landlords with established properties the cost outweighs the benefit, and we will tell you if that is your situation.
Will I be able to get a mortgage?
Yes, there is a well-established company buy-to-let market, though rates and fees are typically higher than personal products and most lenders want a personal guarantee.
How do I get the rental profit out of the company?
Usually a small salary plus dividends, or by repaying a directors loan if you lent the company the deposit. The last of those is often the most efficient route early on, and we plan it with you.
Is it worth it for one property?
Often not. The running costs and the mortgage premium have to be covered by the tax saving. It tends to make sense for higher-rate taxpayers who are reinvesting, not for a single low-yield flat.