Taxwise Accountancy: Specialist Online Accountants for Limited Company Landlords SPV

For most landlords acquiring new properties, an SPV (Special Purpose Vehicle) limited company structure offers significant tax advantages over personal ownership. The key benefits include Corporation Tax at 19% versus personal income tax up to 45%, full mortgage interest relief as a deductible expense, and the ability to retain profits for portfolio growth.

SPVs work particularly well if you're a higher-rate taxpayer, planning to expand your portfolio, or want to retain rental profits within the company for reinvestment. However, transferring existing properties from personal ownership can trigger Capital Gains Tax and Stamp Duty Land Tax, so we recommend professional advice before restructuring your portfolio. We analyse your specific situation to determine whether an SPV structure makes financial sense for your circumstances.

An SPV (Special Purpose Vehicle) is a limited company created specifically to hold and manage property investments, keeping them separate from other business activities. The structure is identical to any UK limited company—registered at Companies House, subject to Corporation Tax, and requiring annual accounts and tax returns.

The term "SPV" simply describes its focused purpose: property investment only. Many landlords create multiple SPVs to hold different properties or property types, providing clearer separation, risk management, and potential tax benefits when selling individual properties or parts of their portfolio. This ring-fencing approach protects assets and simplifies accounting compared to holding multiple property types in one company.

Tax savings vary depending on your personal circumstances, but higher-rate taxpayers typically see substantial benefits. For example, if you're paying 40% income tax personally, the SPV structure saves you 21 percentage points immediately (40% personal vs 19% Corporation Tax). With full mortgage interest relief, savings compound further.

Consider a landlord with £50,000 rental profit and £20,000 mortgage interest: personally, they'd pay tax on the full £50,000 at 40% (£20,000 tax) and receive only a 20% tax credit on mortgage interest (£4,000), resulting in £16,000 net tax. In an SPV, they'd pay 19% Corporation Tax on £30,000 profit (after deducting full mortgage interest), which equals just £5,700 tax—a saving of over £10,000 annually.

We provide personalised calculations during your free consultation to show your exact potential savings based on your property portfolio, rental income, and mortgage costs.

Whilst any qualified accountant can technically handle SPV accounts and Corporation Tax returns, the complexity of property tax legislation—Section 24 restrictions, capital allowances on commercial properties, Stamp Duty Land Tax planning, mortgage interest optimisation, and strategic portfolio growth—requires specialist knowledge that general accountants often lack.

Online accountants for limited company landlords SPV like Taxwise Accountancy focus exclusively on property investment taxation. We stay current with changing property tax rules, understand mortgage lender requirements, and provide proactive tax-saving strategies that general accountants may miss. Our clients typically discover additional tax savings and efficiencies that more than cover our fees, making specialist SPV accountants a sound investment rather than an expense.

Running an SPV involves several costs: Companies House annual confirmation statement (£13), accountancy fees (typically £80-£150 per month depending on portfolio size and complexity), business bank account fees (£5-£15 monthly), and professional indemnity insurance if required by mortgage lenders (£200-£500 annually).

At Taxwise Accountancy, our fixed-fee packages include all compliance work—Corporation Tax returns, statutory accounts, confirmation statements, and unlimited advice—starting from £95 per month for single-property SPVs. When you consider the thousands in annual tax savings plus full mortgage interest relief, the running costs represent excellent value. We provide a complete cost-benefit analysis during your consultation so you can make an informed decision about whether the SPV structure suits your investment strategy.

Yes, there are several tax-efficient extraction strategies. The most common approach combines a small salary (up to the National Insurance threshold of £12,570 annually) with dividend payments from after-tax profits. Dividends are taxed at lower rates than employment income: 8.75% for basic-rate taxpayers, 33.75% for higher-rate, and 39.35% for additional-rate.

Many landlords leave profits within the SPV to reinvest in additional properties, benefiting from compounding growth without immediate personal tax liability. When you do need income, we time dividend declarations strategically to minimise your overall tax burden across tax years. Alternative extraction methods include pension contributions (Corporation Tax deductible), property expense reimbursements, and director's loan accounts for short-term cashflow needs. We design bespoke extraction strategies tailored to your income requirements, personal tax position, and long-term investment goals.

When selling properties held in an SPV, you have several options. You can sell individual properties with gains subject to Corporation Tax at 19% (significantly lower than the personal Capital Gains Tax rate of 24% on residential property for higher-rate taxpayers). Alternatively, you might sell the entire company with its property portfolio intact, potentially qualifying for Business Asset Disposal Relief (formerly Entrepreneurs' Relief), which could reduce your personal Capital Gains Tax to just 10% on qualifying gains up to £1 million.

For retirement planning, you can extract accumulated profits gradually through dividends, transfer shares to family members as part of succession planning, or retain the SPV as a pension-replacement income source. We work with you years before retirement to structure the most tax-efficient exit strategy, potentially involving spousal share transfers, phased property disposals, or company liquidation with Entrepreneurs' Relief. Early planning is crucial—we typically begin exit discussions 5-10 years before your planned retirement to maximise tax efficiency and wealth preservation.