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  • Tax

    Company Deposit SPV - Buy to let

    Hi All

    We are purchasing Buy to let property through SPV Company.

    What is the best way for Directors to put Deposit money into SPV Company e.g. Buy Shares of SPV company or Director's Loan to company or any other ?

    Any advise be appreciated.

    Thanks

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    You should have that discussion with your accountant but so far the consensus has been that a "Directors Loan" is the most tax advantageous way to put money into a SPV in order to purchase property.

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    I'm doing similar, Director's loan to the ltd company. Some lenders are happy with this and some aren't so check what your lender is comfortable with. Director's loan is paid back without tax so the first £nnnk are drawn down from the company without tax liability (assuming you're not charging interest).

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    I believe Toby that before the directors loan can be paid back the company needs to pay corporation tax first 19%

    The director has no personal liability for tax as its just a return of the loan back to the director

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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.


    Absolutely, I meant draw it down without personal tax

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    yes your spot on there

    I have met Landlords who believe its all tax free which is not correct

    DL

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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.


    I agree with Adam Directors loan

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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.

    The Directors loan route is the best solution.  In the 80's lenders were concerned about Directors withdrawing their loans from company's and leaving them as the only support for the company.  I am not surprised we are seeing this return.  The solution we used was to get the director to give an undertaking not to withdraw the directors loan until a certain level of reserves had been achieved this usually satisfied the lender.

    Regards

    Nigel

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    Nigel Reynolds FCCA CMgr FCMI

    Property Tax Specialist

    Reynolds and Co

    http://www.reynoldsandco.co.uk