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SPV or LTD Please HELP!!!!

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Hi Everyone, I'm completely new to property and really hoping someone can give me some advice. Basically me and my sister are looking to go into property investment together, from the people we have spoken to they have said most people these days are setting themselves as a LTD company for Tax purposes. However no-one has given us any advice other than that and i'm wanting to know how i can work out if this is going to be the best route for us to go down. . . . Also someone has mentioned an SPV to me and that this is the better option than an LTD, 


Please can someone tell me which is the better option, or pro's & cons of these as i really dont want to get this wrong so early on and im not entirely sure whats right as so many people say different things. 


Thanks so much :-)


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SPV is a special purpose vehicle, which is basically a type of ltd company for a single purpose, so property investment in this case. So if you decide to go the ltd company route, you'll be setting up an SPV for it.

In terms of deciding whether to do it, that's a bit more complex and intimately comes down to what you're trying to achieve and how you plan to do it.

The main advantage is mortgage interest relief, so only relevant if you're using a mortgage (which you probably should). However, you'll have to pay corporation tax on any profits (19% currently) and then potentially tax when you take the money from the company. There are divided allowances and you can pay into a pension instead, otherwise you're looking at paying income tax, so that on top of the corporation tax means it's probably not worth doing if you want the money now. Unless you're already tax payers and you're only thinking of earning below the dividend allowance anyway. 

There's also a limited mortgage choice for SPVs and they're usually a bit more expensive, so maybe look into that when considering your options. A good broker will be able to explain the options available and related costs.

There's a lot of information about regarding SPV/Ltd Vs personal investment, both on here, other forums and on podcasts, so do a bit of research and see what you think is best. I'm sure you could get some decent suggestions (trying to avoid the word advice) on here, however, it would require you to provide more personal information than you'd probably want to for it to be worthwhile. I'd therefore recommend  discussing with an accountant - I knew we wanted to go down the SPV route, but ours gave us a handy sheet which explained both options which helped confirm it (for our circumstances and strategy).

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