LTD and SPV dilemma

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    LTD and SPV dilemma

    Hi all

    New to this forum and after some clarification. Hope some experts can help or point me in the right direction

    Looked up some old feeds relating to my question however wasn't able to establish what I was after so here I go. I am a HRT payer in my main job until I plan to go part time over the next few years. After doing considerable amount of research I have come to a conclusion that for now the LTD company is the best way forward as per my circumstances. My current BTL is in London and its value has gone up almost 50% since I got it so there is no question of transferring that to the company. I was however working on my future plans and got confused about the various elements involved in running a company and the know how. Before I engage and pay an accountant I wanted to see if I could get help with some basics;

    I would like to set up a LTD company to be able to undertake more than just BTL investments. If I come across a good JV or if I consider doing a flip I would like to do this under the LTD company structure. Now,

    1. For the lettings side of my business or to buy a straightforward BTL, I understand I got to have an SPV? Can this be linked to the LTD company, is it part of the LTD company or is it a new company altogether? This is my biggest confusion, in getting to know what the LTD company and SPV can/cannot undertake...

    2. Based on the above, would I havetwo company numbers and names? File corporation tax and returns twice? Two bank accounts?

    3. If I was to use a director's loan to fund my business and wanted to transfer funds from my personal account, would I be transferring it to the SPV or the LTD company?

    4. Do I need to open both in one go?

    In other words what is the best structure to be able to undertake lettings and as well as any development projects under one company?

    Yes I am fully aware a tax advisor/accountant is the right person to ask these questions and I will appoint one when I go ahead with it all however at this stage I am only trying to gain some knowledge from the experts and hopefully someone can shed some light.



    An SPV is simply a type of company.

    For a landlord an SPV is typically dedicated to one property, so if you wanted to do multiple things you wouldn't set up an spv.
    If you are using BTL finance, the lender will probably insist on the mortgagee being an SPV.

    1 - Each SPV is a separate company.

    2 - Yes to all of them (the bank account is probably something you could work round, but don't).

    3 - There's no difference.

    4 - No.
    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).



      Thanks for your response.

      Originally posted by jpkeates View Post
      An SPV is simply a type of company.

      For a landlord an SPV is typically dedicated to one property, so if you wanted to do multiple things you wouldn't set up an spv.
      If you are using BTL finance, the lender will probably insist on the mortgagee being an SPV.
      1. Just to clarify, say I open an SPV and then purchase a property using BTL finance, can I use the same SPV for future BTL purchases? I will be managing them through another LTD company that deals with various streams of property investment. Would that be ok?

      2. Also say the main LTD company is XYZ Homes, does the SPV need to be linked to XYZ Homes i.e. XYZ Properties t/a XYZ Homes or does it not matter and could well be ABC Properties totally separate from XYZ Homes?

      Hope I am making sense...


        The SPV can be used to own one or more Buy to Let Properties , a minority of investors choose to create separate SPV’s for each acquisition, I cannot fathom the logic given the associated costs involved.
        As I understand it , the SPV must not be linked to any other corporate entity as there is the possibility of any liability being cross charged against the other company and hence make it potentially vulnerable but this is where the expertise of a tax accountant comes to the fore.

        I have previously made mention and indeed JPkeates makes mention , Trading Companies are accepted by only a very small number of lenders , the primary lenders in this sector are the Joint Stock Banks and normally their terms are considered uncompetitive against the key BtL lenders particularly where they will operate a Fixed and floating charge against the company’s assets so in this quarter care should be excercised.


          The mortgage lender has to ensure it can repossess the BTL property and can recover its loan money if the borrower defaults on its monthly repayments. So the Lender registers a charge against the property title at Land Registry to ensure easy repossession and registers a charge against the SPV company at Companies House ( to permit taking possession of the bank accounts and other assets etc )..

          When the LTD Company is borrower for BTL property, the Company can also engage in other trading activity and take on huge amounts of debt for supply of goods . If it fails to pay for the goods, the supplier has to put the company into liquidation and even seize any property assets for settlement of debt.

          so you have operate using 2 or more separate companies and each company will have its own bank account.


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