Setting Up an SPV Limited Company for Buy-to-Let

A Special Purpose Vehicle limited company is the standard structure for a UK buy-to-let portfolio built after 2020. It exists to hold property, nothing else, and it satisfies lender requirements for that single purpose.

The setup

• Company name. Anything that is not restricted.
• SIC codes. Use one or more of 68100 (buying and selling of own real estate), 68201 (renting and operating of own or leased real estate), 68209 (other letting), 68320 (management of real estate on a fee or contract basis).
• Directors and shareholders. Keep it simple: one or two directors, matching shareholders. Complicated share classes create mortgage friction.
• Share capital. £1 ordinary shares are standard. Growth and dividend planning can be layered later with alphabet shares, but only after taking advice.
• Registered office. A residential address is fine but published on Companies House; a service address protects privacy.

Incorporation costs £50 via Companies House and takes 24 hours.

Why investors use an SPV

• Interest deductibility. A company deducts mortgage interest as a normal expense. Individuals get only a 20% tax credit under Section 24.
• Retained profit. Corporation tax on rental profit is 19% or 25% depending on threshold, versus 40%–45% for higher-rate individuals.
• Estate planning. Shares transfer more flexibly than property titles.
• Portfolio finance. Lenders like clean SPVs because they can register a floating charge over the assets.

The trade-offs

• Extraction. Getting money out means salary, dividend or a director's loan repayment. Dividends over £500 are taxed at 8.75%, 33.75% or 39.35% depending on band.
• Higher mortgage rates. SPV BTL rates typically sit 30–75 basis points above personal BTL, and product fees are often higher.
• Personal guarantees. Every director gives one on every loan. Limited liability is theoretical in this market.
• Accountancy. £600–£1,500 per year for a small portfolio, plus a confirmation statement, corporation tax return and, above the threshold, an audit.

Buying into an existing personal portfolio

Moving properties from personal to corporate ownership triggers SDLT on the market value and, usually, capital gains tax. Incorporation relief (Section 162) can defer the CGT if the portfolio genuinely operates as a business — a bar most portfolios of fewer than six properties do not meet. Take advice first.

Lender universe

The specialist BTL lender market — Paragon, LendInvest, Fleet, Landbay, Precise, Aldermore, Kensington and around 20 others — dominates SPV lending. Some high-street lenders now accept SPV applications from four properties upwards.

How EstateVera helps

Property records tag their owning entity so tax positions are grouped correctly. The AI assistant produces an incorporation memo that lays out SDLT and CGT exposure before you commit.