Buying a Buy-To-Let through a SPV (Special Purpose Vehicle)/ Limited Company | The BASICS

Introduction

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In today’s video, we’ll be discussing how to save tax by owning a buy-to-let property through an SPV, also known as a Special Purpose Vehicle.

We’ll cover:

• The pros and cons of using an SPV
• How to set one up
• And why it might be worth considering if you’re buying a buy-to-let property

So let’s get into it!

What Is an SPV?

There are two main ways to invest in buy-to-let property:

• Purchasing in your own name
• Purchasing through a limited company SPV

When you purchase through an SPV:

• The company owns the property.
• The mortgage is taken out in the company’s name.

Benefits of Using an SPV

1. Tax Relief on Mortgage Interest

Before the 2020–21 tax year, landlords could deduct mortgage interest from their personal tax bill.

That rule changed, leaving landlords with higher taxable profits if properties were held in their own name.

With an SPV, mortgage interest can still be deducted against profits—helping to lower your tax bill.

2. Lower Corporation Tax Rate

Companies pay 19% corporation tax.

Individuals pay 20% basic rate and up to 40% at higher rate.

For higher-rate taxpayers, holding property in an SPV can lead to significant tax savings.

3. Stamp Duty Savings

If a property is bought by an individual who already owns a home, higher-rate stamp duty applies.

If it’s bought by a company, you’ll generally pay single property stamp duty.

4. Portfolio Landlords

Landlords with more than four properties are considered portfolio landlords, which makes borrowing more complex.

This restriction doesn’t apply to properties held in an SPV.

5. Dividend Tax Savings

If you transfer money from another company to your SPV for a deposit, you could also save on dividend tax.

Things to Consider When Setting Up an SPV

Registering the Company

You’ll need to register with Companies House, which costs £12.

You must choose the correct SIC code (industry classification) for property investment.

It’s possible to do this yourself, but we recommend using an accountant to get it right.

Solicitor Involvement

As this is still a property purchase, you’ll need a solicitor to handle the legal process.

Separate Bank Account

The SPV is a separate entity, so you must open a business bank account in the company’s name.

All income and expenses (rent, mortgage payments, maintenance, etc.) must go through this account.

Ongoing Administration

As with any company, you’ll need to maintain annual filings and accounts.

An accountant can help with compliance and tax planning.

Final Thoughts

Setting up an SPV can be a tax-efficient way to own a buy-to-let property, but it’s not right for everyone.

Always speak with an accountant before making a decision.

If you don’t have one, you can contact us at WIS—we have both an accountancy arm and a mortgage arm, so you can get all your advice in one place.

Thanks for watching, and we’ll see you in the next video!