Do I need accountant for SPV?

[dx4100]

So does the LTD charge interest on the loan to the SPV ? and if so how much ?

[diseasex]

So does the LTD charge interest on the loan to the SPV ? and if so how much ?

I second this question. Anyone knows?
Thanks

[Darren at Fox-Bartfield]

So does the LTD charge interest on the loan to the SPV ? and if so how much ?

FRS102

The above is guidance on the disclosure within the company accounts rather than the tax treatment. Any interest charged would again depend on a number of circumstances. You could use this as a commercial arrangement between the companies as part of a tax planning exercise. Just like lending from a bank, the interest can vary but you can use this as an opportunity to move income around the related companies. What benefit that would have depends on the values.

[diseasex]

FRS102

The above is guidance on the disclosure within the company accounts rather than the tax treatment. Any interest charged would again depend on a number of circumstances. You could use this as a commercial arrangement between the companies as part of a tax planning exercise. Just like lending from a bank, the interest can vary but you can use this as an opportunity to move income around the related companies. What benefit that would have depends on the values.

So you can set the interest to 0%? thats our question

[Darren at Fox-Bartfield]

Loans

So you can set the interest to 0%? thats our question

Yes, there's no real tax advantage obtained from these type of loans unless written off but that's a whole different can of worms.

AccountingWeb Post

[diseasex]

Yes, there's no real tax advantage obtained from these type of loans unless written off but that's a whole different can of worms.

If written off then SPV would incur taxable profit I guess.
That is whole different story though and dependent on circumstances as everything

[dx4100]

So LTD wants to buy £100k house

SPV setup

LTD "loans" SPV £25k interest free for deposit

SPV gets 75% Mortgage

SPV gets rental income, pays mortgage + other costs + loan repayment back to LTD and pays CT on remaining profits

LTD gets the profits after CT from SPV via a special dividend

Am I following this correctly ?

[diseasex]

So LTD wants to buy £100k house

SPV setup

LTD "loans" SPV £25k interest free for deposit

SPV gets 75% Mortgage

SPV gets rental income, pays mortgage + other costs + loan repayment back to LTD and pays CT on remaining profits

LTD gets the profits after CT from SPV via a special dividend

Am I following this correctly ?

Exactly that. The only downside of this is you need to pay your accountant to manage the SPV. In my case it will be 500 a year. So for 1 property it seems steep but for more not so much.

[dx4100]

Exactly that.

So other than CT / VAT there is no tax to pay until you take money from the LTD personally as usual....

Its all gravy isn't it...

I suppose the only issue is you needing to be liable for the mortgage if it all goes to tulip...

[diseasex]

So other than CT / VAT there is no tax to pay until you take money from the LTD personally as usual....

Its all gravy isn't it...

I suppose the only issue is you needing to be liable for the mortgage if it all goes to tulip...

You don't pay Vat on rentals.