1 SPV per HMO?

J

Johan Nilsson

New Member
I was looking for input on the following question, I will of course take legal advice when it's time but wanted to a better understanding prior to that.

I have an SPV for my one HMO.
I was always thinking of buying the next one through the same SPV, however attending the youtube webinar today where Nick and Jim laid out their corporate structures I started to wonder whether I should introduce a separate SPV?

Would anyone be able to elaborate on the implications of owning 2 properties within the same SPV vs different SPVs?

If going for the 1 SPV per property, what are the implications of having a parent holding company owning each SPV vs not having it?

Hoping you Nick will see this message and elaborate further on your strategy as it was a bit quick in the video and over my head :)

Oh and for the people that didn't watch the video, I highly recommend catching up on it!

Thanks
All the best
Johan Nilsson
 
Nicholas Wallwork

Nicholas Wallwork

Editor-in-Chief
Staff member
Premium Member
Hi Johan,

Glad you managed to catch the Chat Show!

I personally now use a Ltd Co SPV for each purchase. Those SPV's are then owned by our header / group company.

This structure allows the individual SPV to be sold off if you just want to sell one property (thus not affecting the other). The sale of the SPV only attracs 0.5% SDLT currently for the incoming buyer (as a share purchase) rather than the higher rates of SDLT 2nd properties are now subject to! Ultimately it probably means you can sell the property for a higher amount...

Also separate SPVs just allow more flexibility and the dividends can flow tax free up to the header company (at least until you need to take the out of there). So if you re-invest the funds at the group company level then you'll only be paying the going corporation tax rate (circa 19%)...

Obviously this is just y personal situation and if you're wanting to flip properties and take all the profits out, a Ltd Co route probably isn't the best way so always take your own accounting advice before setting up an structure. If you'd like a referral to our tax advisors I can arrange that please just email or DM me...

Good luck investing and see you at the next Chat Show hopefully!
Nicholas
 
J

Johan Nilsson

New Member
Thanks Nicholas, yes I'll be catching tomorrows show!

As far as you are aware, is it possible introduce a header / group company when already having one SPV set up? Or would this be a header/spv setup for any future purchases leaving the existing one in it's separate?

Maybe this is a question for tomorrow perhaps?

I'd love a referral, as my current accountant isn't specialized in property laws.

All the best
 
L

lookinginvest

Member
Could I maybe add a little to that comment.

If each of your individual properties is in an SPV then you simply sell the shares in the SPV and avoid all of the additional costs and charges associated with selling an individual property. These can be significant cost savings!
 
J

Johan Nilsson

New Member
Oh thanks, that helps a lot!
I had never considered it from a share perspective.
 
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