Buy-to-let via subsidairy spv

[Neil@Intouch]

Thanks for the pointers Neil. Will discuss further with my accountant and see what he says.

One quick question - do you reckon giving a loan or franked investment income to the property company, would put the entrepreneur relief for the IT company in doubt? (i.e. is there a risk of the IT company being classified as investment company due to this loan or franked investment income?)

Many thanks.

This won't have any impact on whether you can get ER or not, but if the retained profit is moved to the investment company, it may be that when the trading company is closed you would be covered by the annual CGT allowance, so no personal tax on the closure of the company.

There is the legislation in place about continuing on the same trade or activity, which could mean that the funds taken from the company to close would need to be treated as dividend income, so having the investment company as a shareholder would be of benefit even further in this scenario.

[jmann]

Wouldn't this set up be bit risky? For example if there's a legal issue with the trading company then the investment company will be affected too right?

[elpato]

On this note, say I set up a subsidiary SPV to purchase rental property. What happens if I decide to pack in contracting a few years down the line?

[Neil@Intouch]

On this note, say I set up a subsidiary SPV to purchase rental property. What happens if I decide to pack in contracting a few years down the line?

Depends on the set up. If a loan to fund the rental property company, then this would need to be repaid before closing. If dividend income, no repayment is required and you could in fact pay a further dividend from any retained profit to the rental property company for future purchases and on-going costs.

[Darren at Fox-Bartfield]

Loan to Property SPV

On this note, say I set up a subsidiary SPV to purchase rental property. What happens if I decide to pack in contracting a few years down the line?

As Neil advises and also you could take the asset (i.e. loan from contracting company to SPV) as part of a final distribution and pay the tax on it accordingly. Should be reviewed as part of any tax planning. In effect the company then owes you instead of the other company so you have the right to receive the funds.

I'd suggest taking advice on this as early as possible.

[Maslins]

To me this just cements that people should either:
1) buy BTLs personally (ie not via a company), or
2) get advice from someone who really knows their stuff before pressing ahead.

I'm concerned that people hearing snippets on internet forums of clever things to do then either DIYing or getting their run of the mill contractor accountant to assist will end up making a big mistake that bites them in the bum further down the line.

Where it's £00'000s at stake (as is likely to be the case with BTL properties), skimping is a dangerous game.

[anton]

Loan to Property SPV

Hi Everyone,

I am also considering investing some funds I have available in my IT Co in a BTL property. The more I read about it the more it is clear that proper advise and planning is needed. However, my accountants said they are not able to provide advise on this.

Does anyone have the contact of any advisor/accountant with experience on this who could help in deciding the set up of the SPV, IT co and/or Holding Co (if required)?

Also, any idea of estimated costs in terms of the advise and the set up of the new companies structure?

Thanks and regards,
Anton

[hydraulicwave]

Buy-to-let via subsidairy spv

My accountants want £450 to advise me. I doubt they will tell me anything new

[LondonPM1]

My accountants want £450 to advise me. I doubt they will tell me anything new

Name them please

[northernladuk]

Name them please

Why?