SPV as second property or draw funds and pay hefty tax

[pr1]

I'll provide my kid with best education and wealth. Let's stick to the topic please.

sounds like you're gonna raise a tory MP

[ChimpMaster]

Create SPV
Loan £ from your Ltd to the SPV
Sell your existing home to the SPV using the loan

Beneficiary of funds is you - so you have sold your home to the SPV and now have funds in your personal a/c.

Use these funds to buy your home in London, in your personal name.


Or better still, don't do it at all.

[diseasex]

Create SPV
Loan £ from your Ltd to the SPV
Sell your existing home to the SPV using the loan

Beneficiary of funds is you - so you have sold your home to the SPV and now have funds in your personal a/c.

Use these funds to buy your home in London, in your personal name.


Or better still, don't do it at all.

All good except: Because london's property would be my second, I would have to pay stamp duty (14000) and stamp duty on old home as its value is >125k

[diseasex]

OK bit of an update. The plan is tulip (to some extent)

apparently when buying a property on LTD you pay tax as if that was your second or more property.

No more BTL empire for contractors anymore. ;/

https://www.gov.uk/government/upload...Note_Final.pdf

ompanies and others non-individuals
5.1 The higher rates will apply to the purchase of major interests in one or more
dwellings by a company, if Conditions A and B are met in respect of at least one
of the dwellings53:
 Condition A - the dwelling purchased is worth £40,000 or more;
 Condition B - the dwelling is not subject to lease which has more than 21 years
to run on the date of purchase;
5.2 If none of the interests in dwellings meet both Conditions A and B then the higher
rates will not apply to the purchase.

[eek]

OK bit of an update. The plan is tulip (to some extent)

apparently when buying a property on LTD you pay tax as if that was your second or more property.

No more BTL empire for contractors anymore. ;/

https://www.gov.uk/government/upload...Note_Final.pdf

That's a bit of an assumption... It's only 3% so not that much in the scheme of things....

[diseasex]

That's a bit of an assumption... It's only 3% so not that much in the scheme of things....

For those that are rich - maybe it's not an issue . For someone that want to start building portfolio a 15000 tax for 300k property is a LOT
So 75000 for the deposit you have to pay 15000k from your pocket on the top . 20% of your deposit to the taxman

[WTFH]

SPV as second property or draw funds and pay hefty tax

For those that are rich - maybe it's not an issue . For someone that want to start building portfolio a 15000 tax for 300k property is a LOT
So 75000 for the deposit you have to pay 15000k from your pocket on the top . 20% of your deposit to the taxman

3% of 300k is not 15k, it's 9k, which is 12% of your deposit.

Maths doesn't seem to be a strong suit of yours.

As for being "a lot", it's your choice where you choose to put invest your money. If you can't afford it, maybe invest somewhere else.

[eek]

It's actually £14,000 for a property see https://www.tax.service.gov.uk/calcu...duty-land-tax/ - the standard stamp duty of £5,000 plus the 3% second property charge....

Purchase price bands (£)    Percentage rate (%)    SDLT due (£)
Up to 125,000    3    3,750
Above 125,000 and up to 250,000    5    6,250
Above 250,000 and up to 925,000    8    4,000 

And if you want to create a portfolio than you need to accept the new taxes - otherwise you'll never build that portfolio....

Its worth stating that the reason why some people are suggesting SPVs is not for any stamp duty saving (note that there isn't one) but to allow the company to continue to claim full interest tax relief as S24 comes into force from April 2017-2021....

Finally, you will still need a 25% deposit for a mortgage... So you need £89,000 to buy that home not £75,000.....

[diseasex]

It's actually £14,000 for a property see https://www.tax.service.gov.uk/calcu...duty-land-tax/ - the standard stamp duty of £5,000 plus the 3% second property charge....

Purchase price bands (£)    Percentage rate (%)    SDLT due (£)
Up to 125,000    3    3,750
Above 125,000 and up to 250,000    5    6,250
Above 250,000 and up to 925,000    8    4,000 

And if you want to create a portfolio than you need to accept the new taxes - otherwise you'll never build that portfolio....

Its worth stating that the reason why some people are suggesting SPVs is not for any stamp duty saving (note that there isn't one) but to allow the company to continue to claim full interest tax relief as S24 comes into force from April 2017-2021....

Finally, you will still need a 25% deposit for a mortgage... So you need £89,000 to buy that home not £75,000.....

thats what i said. I need 20% more on the top of the 25% deposit. Pretty expensive game for London tbh, I'll look at local , cheaper properties though.