If you are a landlord or a property investor, you may consider setting up a Special Purpose Vehicle (a Property Limited Company).  If you own buy-to-let properties, you will have to pay tax based on your rental income, setting up an SPV may be a more tax-efficient option for you.

The income you generate from property investments is added to any personal income (from employment or if you run a business), and this could potentially push you up to the threshold, which means that you are in the higher tax band.

What is a Special Purpose Vehicle?

A Special Purpose Vehicle (SPV) is a limited company set up, especially for buy-to-let properties. If you are a landlord or property investor, you can manage buy-to-let properties using your name or set up an SPV.

An SPV is treated as a separate legal entity and registered with a specific SIC code under Companies House.

Why Choose Watson Knipe?

The main reason that people choose to set up an SPV is to reduce their tax liabilities. But it's worth understanding the advantages and disadvantages of setting up an SPV before you make the change.  We aim to find out more about your plans for investing in property and suggest the best approach for you financially and based on your longer-term objectives.

If you do set up a Special Purpose Vehicle, we can help you by:

  • Submitting annual confirmation statements to Companies House. Filing accounts is more complicated than when you are submitting a personal tax return.
  • Advising you on managing dividend pay-outs for tax efficiency. There may be options to pay dividends to family members or leave the profit in the company to use in the future for purchasing more properties.
  • Exploring opportunities to mitigate inheritance tax if you are operating as a limited company.
  • Supporting you if you need to access finance to invest in property to grow your portfolio.

 

We work with landlords and property investors based in the East Midlands, London and across the UK. If you are interested in finding out more about setting up a Special Purpose Vehicle, please contact us by calling 01623 490 120 or email This email address is being protected from spambots. You need JavaScript enabled to view it..