Reply to: Buy-to-let via subsidairy spv

[hydraulicwave]

If I create a spreadsheet comparing personal and SPV - look at the figures over the next four years, as the mortgage interest is impacted by the new staggered in rule. And I grasp how to set up a SPV, what will the Accountant tell me?

The spreadsheet can assess the effect of mortgage interest rates, maintenance, accountancy fees, insurance, company running costs etc. And can tell me how much the rent would need to go up each year to balance out the staggering in of s24, if I hold them personally.

Can someone tell me the things an Accountant might provide in this sort of case, that I will find valuable, then that would help.

All in all the spreadsheet tells me it's best if I can remain a lower rate tax payer. So, if the costs were comparable I'd consider a SPV as I'm higher sometimes.

[Maslins]

My main concern is I’ll spend the money and not have any new knowledge. Most of the information required can be researched and understood, without paying someone £450 I’m thinking.

Not picking on the poster here, but I think this mindset is indicative of a lot of the problems in the professions. Information is always out there, but often it's hard to find and understand the information that's relevant to you. This doesn't just apply to accountancy, I "suffer" this when I'm trying to find the answer to a legal/HR/architectural/plumbing question.

One reason why accounting fixed price packages can work well is that there's a weird dichotomy (sweeping generalisation of course, but...):
- people are prepared to pay for the compliance stuff (preparation and submission of accounts/tax returns etc), but they don't really value it.
- people are not happy paying for advice, but do value it.
So you charge what's realistically an inflated price for form filling, and chuck in the advice for free, and everyone's happy...or at least they are until someone else comes along who's cheaper, superficially promises the same things, but the advice sucks.

Still, my view on SPVs hasn't changed. I still think buying personally makes more sense in the long run.

[northernladuk]

My main concern is I’ll spend the money and not have any new knowledge. Most of the information required can be researched and understood, without paying someone £450 I’m thinking.

Must admit I don't agree with that at all.

[hydraulicwave]

My main concern is I’ll spend the money and not have any new knowledge. Most of the information required can be researched and understood, without paying someone £450 I’m thinking.

[Alan @ BroomeAffinity]

Because I would not pay 450 for basic advice on setting up a SPV. I would expect a lot more

Doesn’t sound unreasonable for advice that could save you thousands in the long run.

[northernladuk]

Because I would not pay 450 for basic advice on setting up a SPV. I would expect a lot more

So what does naming them achieve?

[LondonPM1]

Why?

Because I would not pay 450 for basic advice on setting up a SPV. I would expect a lot more

[northernladuk]

Name them please

Why?

[LondonPM1]

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

Name them please

[hydraulicwave]

Buy-to-let via subsidairy spv

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

[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

[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.

[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.

[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.

[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?