Special Purpose Vehicle Companies (also known as SPV companies) are commonly used to to purchase Buy to Let (BTL) properties. There are many uses for an SPV company, for example, handling the transfer of any type of asset or even a loan to an existing business. In this article we will discuss the benefits of setting up an SPV Limited Company for Buy-to-Let purposes and the simple steps involved in setting up this special type of Limited Company.
Why use an SPV Company?
- Someone planning to let out the purchased property for commercial reasons, may find it more tax efficient to be a Limited Company taxed as a Company, as opposed to a sole trader who is taxed under self assessment.
- An SPV company can in some instances make the process of applying for a mortgage easier.
- If you are looking for investors for your commercial property venture, it is more likely that investors would find a Limited Company a lower risk investment.
- In certain situations, setting up an SPV Company can encourage more favourable finance terms
How to form an SPV Company for Buy to Let Properties?
If you are forming a new company
STEP 1: Choose a Company Name
Start with our Company Name Check to secure your preferred SPV Company name
STEP 2: Choose a Limited Company Package
We would recommend choosing either the Pine Package (with complete address privacy) OR the Oak Package ( which includes address privacy plus the use of a virtual office address) You can compare all our Limited Company Packages here.
STEP 3: Choose the right SIC Codes
During the application form you will be asked to select upto 4 SIC codes and these will specify your business activity.
You must use ALL 4 of the following SIC codes (Business Trading Activity):
- 68201 – Renting & operating of housing association real estate
- 68209 – Other letting & operating of own or leased real estate
- 68320 – Management of real estate on a fee or contract basis
- 68100 – Buying & sell own real estate
Need assistance? Get in touch with us today by sending us a message or contact a member of our team on live chat and they will guide you through the form.
If you already own a company
An existing company would already have specified SIC codes. If the existing SIC codes are not the 4 property-related SIC codes stated above than, you will need to file a Confirmation Statement (previously known as an Annual Return) to update those SIC codes.
You can file a confirmation statement on Seed Formation or we can assist you with this filing for just £29.99 + vat. Speak to a member of the team today to learn more.
Need Help?
At Seed Formations we have helped many customers set up their SPV Companies for Buy-To-Let. Let our friendly team can help you complete your application. The best ways to contact us is by LIVE CHAT and we can help you through the application OR by sending us an email.