Seeking clarity on SPV setup
I've been looking into investing retained profit into (eventually) a few BTL properties, but haven't yet found a good comparison of the options. All tax-efficient options involve an SPV, but how to transfer the deposit is a big consideration
The big question for me - is there any way to set the SPV up and avoid being "associated companies"? If I lose the right for my trading co to be a part of the Flat Rate VAT scheme, I lose at least £6K/year - roughly what one BTL house would gross in rent.
Then how to set things up and transfer the deposit?
1. SPV is a wholly owned subsidiary of the trading co. Deposit transferred from one to the other.
2. SPV has shares in the trading co and deposit is simply paid as a dividend
3. Trading co loans the SPV the deposit - from what I read the SPV then has to pay a commercial rate of interest (not ideal if it's barely turning a profit at the start)
4. SPV becomes the parent company of the trading co - have seen this mentioned, but don't know how a deposit would be transferred
We also have to consider how each option affects the ability for the SPV to get a loan, and liability etc. It's a massive ball ache trying to figure it out - I need an accountant the most before I need to hire one...
- anyone feel like dishing out free advice?
I've been looking into investing retained profit into (eventually) a few BTL properties, but haven't yet found a good comparison of the options. All tax-efficient options involve an SPV, but how to transfer the deposit is a big consideration
The big question for me - is there any way to set the SPV up and avoid being "associated companies"? If I lose the right for my trading co to be a part of the Flat Rate VAT scheme, I lose at least £6K/year - roughly what one BTL house would gross in rent.
Then how to set things up and transfer the deposit?
1. SPV is a wholly owned subsidiary of the trading co. Deposit transferred from one to the other.
2. SPV has shares in the trading co and deposit is simply paid as a dividend
3. Trading co loans the SPV the deposit - from what I read the SPV then has to pay a commercial rate of interest (not ideal if it's barely turning a profit at the start)
4. SPV becomes the parent company of the trading co - have seen this mentioned, but don't know how a deposit would be transferred
We also have to consider how each option affects the ability for the SPV to get a loan, and liability etc. It's a massive ball ache trying to figure it out - I need an accountant the most before I need to hire one...
- anyone feel like dishing out free advice?
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