In this guide we will explore the legal and financial structure of a limited company (SPV) that is set-up to purchase an investment property.
Who owns the property when held in an SPV?
The limited company owns the property
When purchasing a property for investment purpose through a limited company (an SPV), the legal owner will be that company. It will appear on all the deeds and documents relating to the property at the land registry.
A company is a legal entity in it’s own right and as such has the right to enter into contracts and obtain finance just like an individual can. it can also sue or be sued. …
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Often entrepreneurs focus heavily on starting their business and neglect to fully explore the commercials. You might feel that until you are generating big money there’s no need for financial modelling like the ‘big’ companies. However, building a solid financial model is absolutely one of the best things you can do for your startup. Why?
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Before you rush to purchase your buy-to-let property through a limited company, make sure you understand how the structure works, including the ins and outs of the latest tax rules.
In this guide we explore the differences between buying an investment property in your own name and through a limited company known as a Special Purpose Vehicle (or SPV).
(N.B: The terms limited company and SPV are used interchangeably in this guide as an SPV is the type of limited company commonly used in this context).
Let’s start with the new tax rules for landlords
- An additional 3% stamp duty for investment property which came into force in April 2016
- Landlords who pay the higher-rate of income tax (40% — 45%) will have the tax relief they can claim on mortgage interest reduced to 20% by April 2020 (the example below illustrates how this works). …
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