SPV vs previous trading company for BTL

[contractingmonkey]

Hi CUK

Been reading the various articles and hoping for some advice.

I have a limited company which until recently was actively trading (moved to a permy role). At some point in the future I may return to contracting.

I have accrued profit reserves in my trading company I would like to invest in property. Initially this will be without a mortgage but may want a mortgage in future in order to release capital.

I read that an SPV is the recommended way forward for future mortgages, however I am wary of managing two Ltd companies (especially when one is not currently active).

? Would it be appropriate / possible to change my company SIC codes to become solely property investment (and satisfy the mortgage companies in future)

? If I did lend the cash from one company to the other, would that mean the trading company needs to be maintained for as long as the SPV is active?

Anyone else done similar?
Views and advice appreciated.

[northernladuk]

You mean like the thread right above yours at the moment??

[northernladuk]

OK it's moved.

This one...


http://forums.contractoruk.com/accou...-loan-spv.html

Plenty of other threads that might help here....

https://www.google.co.uk/search?q=SP...hrome&ie=UTF-8

[contractingmonkey]

Thanks northern lad,

I hace read most of those, I believe the difference in my scinareo is that I don't need to keep the trading company active.

Hence the question on converting a previous trading company to property SPV.

Or later closing the trading company that has loaned funds to an SPV.

[Maslins]

Why not close the trading company and invest personally?

One of the main reasons for people sometimes opting for the SPV is to avoid personal tax on extracting funds...but typically these people have an ongoing trading business, so personal taxes would be fairly high (as on a big dividend). You'll have the option of liquidating, so probably just suffering 10%.

Yeah you'll potentially still have the reduced tax relief for higher rate mortgage interest...but worth checking whether the benefits stack up for your situation.