SPV and family home with Help to Buy?

by Readers Question

9:58 AM, 28th November 2018
About 2 weeks ago

SPV and family home with Help to Buy?

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SPV and family home with Help to Buy?

I have a rental property held in a SPV (Single Purpose Vehicle Ltd. Co.) with myself and my wife as directors. The rental property held in the SPV has no outstanding mortgage. There is no income currently generated by the rental property as a family member is living there at the moment. Our family home is owned by us outside of the SPV.

My wife is expecting and we are looking at a bigger family house. We were contemplating using Help to Buy as part of the purchase, but am unsure if this is even an option because of the other property held in the SPV. Is anyone able to advise on this?

Alternatively, I’m also thinking that we purchase the new family home through the SPV by raising capital against the rental property. The rental property will ultimately be generating income once the family member has left.

If anyone has any advice on thoughts on the best way of structuring this that would be great.

KP



Comments

Neil Patterson

10:04 AM, 28th November 2018
About 2 weeks ago

Hi Kevin,

Who would you anticipate owning the family home if you take money and capital out of the SPV. Do you have a Directors loan account that could offset this for tax?

To give tax advice that you act upon you need to be a) qualified and b) understand the entirety of you tax and income position.

De malsi ltd

10:11 AM, 29th November 2018
About 2 weeks ago

Hi Kevin,

I believe if the rental property is owned by a separate legal body (the SVP) and you decide to leave the property to someone without them paying rent, it might be deemed either embezzlement of company funds or hidden profit distribution (to you and your wife via the family member) My advice: Talk to a tax adviser.


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