Newbie Looking for Advice on SPV and Help to Buy

Discussion in 'General Property Investment Discussion' started by KRP, Nov 27, 2018.

  1. KRP

    KRP New Member

    Hi everyone

    I am after a bit of advice (isnt everyone!?) please feel free to move this if i’ve posted in the wrong group.

    I own a rental property which currently has no mortgage outstanding on it. The property currently generates no income as a family member is living there. When they leave (12 months or so) I will start to let it and as I am a higher rate tax payer it seems to make sense to transfer the property into a spv to reduce tax.

    So far so good.... however....

    My wife and I currently own our family home with an outstanding mortgage. She is expecting and we are looking to move to a bigger house. We want to use help to buy to fund part of the purchase but cant due to me owning the rental property. If the rental property was in a spv would that mean we could use help to buy as technically the spv would own it and show on any land registry search?

    All advice will be greatfully received!
     
  2. diyhelp

    diyhelp Active Member

    There are some interesting questions in this post. As an SPV would be treated as a “separate party” from a legal standpoint, you may be able to separate the properties and your ownership issues.

    It may be worthwhile looking down the route of raising a mortgage within the SPV to buy the property from you. As, in theory, the SPV would be able to offset mortgage interest against future income, you could personally receive a lump sum for the property and reduce the SPV tax liability going forward. It might be worth having a chat with your accountant.
     
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