What are the Benefits of Setting up a Special Purpose Vehicle? - RiteMortgages

What are the Benefits of Setting up a Special Purpose Vehicle?

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.
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