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Tax implications of SPE

Tax implications of SPE

One of my client received the following email from the ban

I am meeting various lenders over the next couple of days regarding your proposition.  Lenders do not generally like to lend to trading limited companies, the best way forward is probably for you to create an SPV company purely to purchase the properties, we can help to do this for you. However could you ask your accountant what the tax position would be if you create the SPV and transfer the monies from your existing company to the SPV by means of an inter company loan, I believe the transfer would not be taxable but you should check with your accountant.

Can someone please advise what would be the tax implication of the loan to SPV?

Kind regards



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02nd Dec 2011 16:11

Re: Tax implications of SPE

IThe SPV company is neither a participator nor an employee, so I cannot see how the loan could be taxed under rules for these.  -  The director has a fiduciary duty towards the first company and should charge interest at commercial rates.

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03rd Dec 2011 07:15

why isnt the loan advanced directly to the spv by the lenders instead of via existing coy?

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05th Dec 2011 07:39

Thank you guys.

I think I agree with Novakova regarding the commercial interest thing.

The director is reluctant to pay directly into the SPV as the investment in his first company is from his family members and himself and they want to buy a property through the company.

Thanks for your feed back.



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05th Dec 2011 08:07

dont understand this

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