Newbie Looking for Advice on SPV and Help to Buy

[KRP]

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!

 

[diyhelp]

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.