Special Purpose Vehicles

Limited Companies and Property Portfolios

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Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.

Tax treatment varies according to individual circumstances and is subject to change

Alex Cheema does not provide advice on mortgages or equity release. This service is by referral only.

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.

MatthewSpecial Purpose Vehicles