What is an SPV?
A Special Purpose Vehicle (SPV) is a type of limited company that is set up to trade in one principle activity.
How is this Useful for Buy-to-Let Mortgages?
An SPV will be a limited company that owns properties for the sole purpose of letting them. As there are no complications or liabilities created by other activities, buy-to-let lenders favour this in comparison to other types of limited companies.
What are the Benefits of being a Limited Company?
• Mortgage interest is considered as an expense and can be fully offset against rental income received
• The profits within the company are liable to corporation tax rather than personal tax.
• Dividend allowance and directors’ loans allow withdrawing profit more tax efficient.
• You are able to use your profits to re-invest to expand your portfolio without any additional tax.
• There are different options for inheritance tax planning between parents and children.
• The profits within the company are liable to corporation tax rather than personal tax.
• Dividend allowance and directors’ loans allow withdrawing profit more tax efficient.
• You are able to use your profits to re-invest to expand your portfolio without any additional tax.
• There are different options for inheritance tax planning between parents and children.
