Tanya WWW

Registered with Property118.com
Tuesday 17th May 2016

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Tanya WWW

15:39 PM, 24th October 2016, About 5 years ago

Start up advice please for a property business?

Hi Desi,

I'm also a contractor and I've just set up a property SPV. The new company took me about 15min to create at Companies House. I structured mine as a separate company and then drew up an intercompany loan agreement (templates can be googled) and transferred retained funds from my contracting company to my SPV in order to invest them in property - as corporation tax has already been paid, there's no further tax applicable. There's also some division on the internet as to whether your trading company and the SPV become "associated companies" and you lose the right to be in the Flat Rate Scheme - I would argue no, as the conditions are that there is an organisational link (true) financial link (true) AND economic link (false) - the definition of economic link if you drill into it is that one company benefits from the actions of the other. Basically the rule was set up to stop someone splitting a large company into 2 related companies to still access the FRS, and in this case the companies are separate and the SPV isn't even VAT-applicable.

I'm single so not an expert on marital tax breaks, but given that each individual gets £5K tax-free dividends, your other half should be getting £5K from one of your companies to take advantage of this.

If you do set up the new property SPV and then sell your current rental property to it (read up on the capital gains implications though) so long as you and your partner are 50/50 in the shares for that company, then the ownership would be split.... Read More