How does investing retained earnings through an SPV work?

How does investing retained earnings through an SPV work? Want to start growing your retained profits? Your solution could lie in a ‘special purpose vehicle’ or SPV – in property investment terms, a limited company established solely to hold and manage properties on behalf of its shareholders.

By setting up an SPV and loaning your retained earnings to the SPV company to invest in buy-to-let property purchases, you can start earning great returns on your RE – both through short-term lettings and long-term capital appreciation.

It’s a highly tax-efficient route to growing your money, since your new limited company will be able to offset 100% of your mortgage interest and lettings expenses from your taxable income – so you won’t lose your original company’s wealth to the new Section 24 tax rules.

And best of all profits are taxed at corporation rates (currently 19%), instead of your marginal rate of tax, making it great for higher and additional rate tax payers.

The team at LimitedCompanySPVMortgages.co.uk can help you set up your new limited company and secure additional funding for your BTL purchases via specialist SPV mortgage options.

Get in touch to find out more!

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