10:50 AM, 11th October 2021, About 2 months ago
Hi Property118, I am interested in setting up a Smart property company structure with a holding company and SPVs (Single Purpose Vehicles) as subsidiaries and want to understand the set-up and annual maintenance costs involved, please.
Many Thanks, T
Answer From Mark Alexander: “You could set up a very basic company structure as outlined yourself and it would cost you less than £100. If you use an accountant it might cost you up to £500.
“However, a ‘Smart’ company structure is always bespoke to each clients requirements. It’s not just a group of companies with multiple share classes at Holding Company level.
“If the purpose of the SmartCo structure is business continuity, legacy planning and inheritance tax you will also need to have a shareholders agreement and Articles of Association professionally drafted to achieve you specific objectives and to assure your planning doesn’t fall foul of the Settlements Legislation.
“This is a ‘reserved legal activity’ for which highly specialist advice is required from a Barrister. Accountants are not trained, regulated, authorized or insured to take on work of this nature, so be very wary of any Accountants who purport to set up ‘Smart’ property company structures.
“You may also wish to dovetail your Wills, form a Discretionary Trust and have a Letter of Wishes drafted. The outcome of this form of intergenerational planning can save millions of pounds in inheritance tax for your children, grandchildren and great-grandchildren, but typically costs £15,000 to £20,000.
“If your goal is to create a legacy, this investment will save 40% inheritance tax on the future growth of your assets for many generations to come.
“As an aside, our Barristers are the market leaders and hence incredibly experienced in this form of planning. They also carry £10,000,000 of professional indemnity insurance.”
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