Special Purpose Vehicles
Limited Companies and Property Portfolios
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Tax treatment varies according to individual circumstances and is subject to change
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Anything written on this site is for educational purposes only.
Limited companies can be used to purchase buy-to-let (BTL) properties – rental funds can then be drawn from the company through salary, expenses and benefits, dividends, or directors loans. They offer a number of benefits to landlords:-
- Tax benefits – reduced company tax liabilities versus personal tax rates
- Simple and quick to set up – it takes as little as 15 minutes to register a limited company online
- Future planning – it is simpler to transfer ownership of a limited company than a privately held property. Also, as the property will remain owned by the company, it will be protected from stamp duty and CGT
- Portfolio expansion – retaining profits within the company will help to protect them from crystallizing tax liabilities, enabling the portfolio to be expanded more quickly
- Limited liability – limited company status means that your liability runs only to any investment that you make in the company
- Increased credibility – many limited company owners feel that this gives the greater credibility, making it easier for them to attract tenants
There are a number of lenders who specialise in limited company BTL mortgages. They usually require the limited company to be a Special Purpose Vehicle (SPV) – this is a company which is set up just to hold property and do nothing else, and can be set up simultaneously with the mortgage application process.