Do I need accountant for SPV?

[diseasex]

You buying outright or via mortgage ?

And if so...

Did you have to be a guarantor for the mortgage still ?

Quite possibly you have to be guarantor, however didnt go this far so someone might correct us ? If I could buy with cash i wouldnt need SPV

[dx4100]

Also how does it work when you put down the deposit ? Its usually 25% right ?

I am presuming you can't just use the contracting LTD reserves to pay the deposit to buy it through the SPV LTD can you without incurring a lot of tax?

[Darren at Fox-Bartfield]

Issues

To my understanding SPV has its own liability but it is owned by your main LTD. Thanks to that if you are paying dividends you don't pay income tax straight away, but pay it to your LTD. Plus if your SPV goes bust, your main LTD isn't liable.

Has your accountant considered the implications on creating a group structure, VAT issues and also your exit strategy with the contracting company owning or having shares in the property company? I'm sure they will have but best to check, it's not often have suggested this type of arrangement except in a larger group structure but these things should be tailored to the client after weighing up all circumstances and requirements.

[diseasex]

Also how does it work when you put down the deposit ? Its usually 25% right ?

I am presuming you can't just use the contracting LTD reserves to pay the deposit to buy it through the SPV LTD can you without incurring a lot of tax?

First of all what is important is your SIC code. It has to be right for BTL properties. So your consultancy SIC doesnt fit. Secondly, based what i've read on the internet, lenders won't lend to anything other than SPV because these are simpler to dissolve in case you don't pay the mortgage. That said lenders will only lend you to your SPV because your normal consultancy is too difficult to them to understand.

[Darren at Fox-Bartfield]

Loans

Also how does it work when you put down the deposit ? Its usually 25% right ?

I am presuming you can't just use the contracting LTD reserves to pay the deposit to buy it through the SPV LTD can you without incurring a lot of tax?

One related company can loan to another related company.

[dx4100]

First of all what is important is your SIC code. It has to be right for BTL properties. So your consultancy SIC doesnt fit. Secondly, based what i've read on the internet, lenders won't lend to anything other than SPV because these are simpler to dissolve in case you don't pay the mortgage. That said lenders will only lend you to your SPV because your normal consultancy is too difficult to them to understand.

Yeah makes sense... So how do you get the cash to flow to cover the 25% deposit required ?

You pumping that in personally or some how moving it from LTD to SPV ?

[diseasex]

Yeah makes sense... So how do you get the cash to flow to cover the 25% deposit required ?

You pumping that in personally or some how moving it from LTD to SPV ?

I'm keeping all the profits in the LTD and only pay 20% CT without paying this out as dividend (i'm paying out only what i need to live). Saves a lot of tax. then i lend it to SPV and SPV pays it out back to my LTD from rent.
That would probably mean that the deposit you get back tax free from rentals=)

[dx4100]

One related company can loan to another related company.

The important word there being "loan"... So it needs repaying? Interest charged ? Sure I read it would be viewed as being of personal benefit so you are going to have to treat it as a directors loan etc and all the rules that go with that ?

Is that right ?

[ChimpMaster]

I'm keeping all the profits in the LTD and only pay 20% CT without paying this out as dividend (i'm paying out only what i need to live). Saves a lot of tax. then i lend it to SPV and SPV pays it out back to my LTD from rent.
That would probably mean that the deposit you get back tax free from rentals=)

It's a good idea and one I have thought about in the past.

So you have to keep your IT Ltd Co running for as long as the loan remains outstanding? For example, if the property in your SPV is generating profits and using these to repay the loan, it could take many years before the loan is paid off. What if you quite contracting and wanted to MVL?

[diseasex]

It's a good idea and one I have thought about in the past.

So you have to keep your IT Ltd Co running for as long as the loan remains outstanding? For example, if the property in your SPV is generating profits and using these to repay the loan, it could take many years before the loan is paid off. What if you quite contracting and wanted to MVL?

That company shares in SPV is an asset. And what you do with desks or laptops and other assets when dissolving company?