Seed capital for Ltd company format

by Readers Question

11:13 AM, 3rd November 2015
About 3 years ago

Seed capital for Ltd company format

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Seed capital for Ltd company format

I already run my own company and am looking to venture for the first time into BTLs.seed

For a variety of reasons (including already being a higher rate taxpayer and the new Taxation circumstances) I am looking to start all of this up through a Ltd company.

In order to do this I am planning on setting up an SPV Ltd company and then loaning this new company money from the profits of my existing company as seed capital for deposits.

However – this will effectively show as a liability against this SPV company before the get go.

Will lenders have a problem with this? – if they will, are there any recommendations on how to pull seed capital into this new SPV company without first being subject to 40% taxation?

Thanks

Sam



Comments

Graham Bowcock

13:44 PM, 3rd November 2015
About 3 years ago

Sam

The answer will come really have to come from your lender but I have just set up a new SPV myself, owned by two other limited companies. The bank (Lloyds) have had no issue with lending the new company money to buy commercial property. The directors of the companies are, of course, guarantors and the loan is secured on the property so not really very risky but you do need an enlightened bank manager. Residential may be treated differently but the principles are the same.

Graham


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