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Sunday 19th August 2018

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22:26 PM, 6th September 2019, About 2 years ago

Surely there must be a more tax efficient way?

When we decided to get into property seriously, we set up a holding company for the reasons given in the article. However, we found finance almost impossible. This was the last straw in the list of things that ruled out different lenders (think of a game of "guess who" where after 4 questions there is no-one left!).

We switched tactic and made the SPV standalone. We each have our own Ltd Co's and do inter-company loans to the SPV to provide finance for purchases.

Our Ltd Co's are low risk - they are very unlikely to go bust. The OP's circumstances may differ.

With regards to SASS's for property. I thought this would be a good way to go. However, I've now back out of this for diversity reasons.

We look to maximise SIPP contributions and deliberately do non property investments (100% equity funds) with retained profit in Ltd Co. being loaned to SPV for residential property.

As an aside, if you have no earnings other than the £12,500 salary (dividends don't count for this purpose), have you looked into the "Starting Rate Band"? https://www.gov.uk/apply-tax-free-interest-on-savings

If you were able to personally lend money as a director to any of your companies for legitimate reasons and charge a commercial rate of interest for a unsecured loan then you may need to declare less dividends.... Read More