Withdrawing re-financed debt from a property owning SPV?Make Text Bigger
I am a relatively new property investor with two investment properties which are owned personally. As I am a higher rate tax payer my strategy going forward is to acquire all future properties through a corporate wrapper (English limited company SPV).
My investment strategy is simple – I acquire 2 bed houses with 75% finance which are then refurbed and let to young professional tenants. A crucial part of this strategy is my ability to refinance the assets every two years or so to release cash to fund future purchases. My strategy is to buy and hold long term so am less concerned (at this stage) about dealing with sale proceeds.
I am trying to understand how I can remove the cash which could be released from a property on a re-financing without paying any tax or it being treated as a dividend. Would a inter-company loan work? I.e. SPV 1 loans SPV 2 the money released from Property 1 in order to fund the deposit for Property 2. Any advice would be much appreciated!
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