Can you change any LTD into an SPV at any time?

Is it possible to change a regular trading business to an SPV at any moment?

Didn't find your answer?

Hi everyone

I hope someone could help with an advise. I have a business which is not SPV. I plan to buy a property for buy to let on it, thus using cash excess and stabilizing income via rent.

If I decide to change the existing business to an SPV, can I do so at any moment? I would like to avoid setting up an SPV now, it's increasing costs (accountancy, forms, bank accounts etc).

The current activity is risk free in the meaning that I won't have creditors to chase potential properties.

So it's great for me to attract more income and spend it back on properties to let.

Can anyone help please?

 

Replies (36)

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By Wanderer
30th Jan 2020 00:57

Ramcri wrote:

Hi everyone

I hope someone could help with an advise. I have a business which is not SPV. I plan to buy a property for buy to let on it, thus using cash excess and stabilizing income via rent.

If I decide to change the existing business to an SPV, can I do so at any moment? I would like to avoid setting up an SPV now, it's increasing costs (accountancy, forms, bank accounts etc).

The current activity is risk free in the meaning that I won't have creditors to chase potential properties.

So it's great for me to attract more income and spend it back on properties to let.

Can anyone help please?

 

If you can afford an investment property surely you can afford to pay for advice which takes the particular circumstances of your situation into account?
There may well be greater consequences than the simple answer to your question as there are relevant questions that you haven't asked.
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Replying to Wanderer:
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By Ramcri
30th Jan 2020 09:27

...

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By Wanderer
30th Jan 2020 01:01

Oh look, seems like you were given much the same advice 18 months ago:-
https://www.accountingweb.co.uk/any-answers/what-can-i-invest-in

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Replying to Wanderer:
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By Tax Dragon
30th Jan 2020 06:56

The homework over the intervening period has not been altogether fruitful. (And, no, bfj, I am not being snide. Were I to go on and make some sneery comment about the OP having learned the acronym "SPV" in that period, then maybe I'd have to examine myself more. But though I thought it, I didn't say it.)

OP, SPV is a meaningless expression really. What a company can or can't do is governed by its constitution and external law. Your question as put is not something that should be answered in a forum about tax and accounts. Having said that, it would be extremely strange if your company could not, in principle, buy a property and very odd if it couldn't then let it out.

Assuming it is possible, is it sensible? Refer back to the previous thread for some comment on that. But above all refer back to your accountant. (You said you had one. Very sensible.)

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Replying to Wanderer:
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By Ramcri
30th Jan 2020 09:37

If you can't help with some valuable info then I would prefer not to receive any. Might as well close the blog if all we do is send people to advisors. I'm always doing a lot of research myself before I blind fold my eyes and follow a direction.

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Replying to Ramcri:
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By Tax Dragon
30th Jan 2020 10:01

This is not an advice forum.

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Replying to Ramcri:
By ireallyshouldknowthisbut
30th Jan 2020 10:03

Its an open forum, people will post what they want.

the advice you got above is actually spot on its just not what you want to hear as you don't appear to understand what you are doing, and are therefore not asking the right questions and going round in circles.

I spent £60 on a chiropractor on Tuesday. He stuck his thumb in a really painful place, and it was all done in 15 minutes and my problem is now resolved. I saw a different one 3 weeks ago who charged £50, spent an hour not doing very much, and the problem got worse. Its pays to pay a professional.

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By JCresswellTax
30th Jan 2020 09:27

SPV - a [***] made up term that really doesn't mean anything and just confuses people.

Annoys me even more than people who get advice and advise mixed up.

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Replying to JCresswellTax:
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By Tax Dragon
30th Jan 2020 09:37

Advices isn't a word.
Advises is.
"An advice"...?
What a wonderful world.

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Replying to JCresswellTax:
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By Ramcri
30th Jan 2020 09:40

This is the very bit that get's me. All I found is that it limits me to property management so I can't combine the activities under the same company. This is why I'm worried that if the property investment bit becomes a bigger source of income then can I change it all in SPV.

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Replying to Ramcri:
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By Tax Dragon
30th Jan 2020 10:02

"... it limits me..."

What is "it"?

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Replying to Ramcri:
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By The Dullard
30th Jan 2020 10:57

Is the property an HMO?

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Replying to The Dullard:
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By Ramcri
30th Jan 2020 17:40

It will be HMO yes

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Replying to The Dullard:
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By Ramcri
30th Jan 2020 17:40

It will be HMO yes

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Replying to The Dullard:
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By Ramcri
30th Jan 2020 17:40

It will be HMO yes

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By JCresswellTax
30th Jan 2020 09:27

Oh, have you filled out the SPV registration form?

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Replying to JCresswellTax:
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By Ramcri
30th Jan 2020 09:41

No, sorry, I'm looking into my options now.

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Replying to JCresswellTax:
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By Bobbo
30th Jan 2020 15:16

Comment of the day.

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RLI
By lionofludesch
30th Jan 2020 09:34

Where's Captain Black when you need him to explain what an SPV is ?

https://www.ebay.co.uk/i/254473639248?chn=ps&norover=1&mkevt=1&mkrid=710...

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Replying to lionofludesch:
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By Ramcri
30th Jan 2020 09:42

Hi, sorry, but the link is an Ebay toy?

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Replying to Ramcri:
paddle steamer
By DJKL
30th Jan 2020 09:50

A SPV stands for Special Purpose Vehicle, it is any vehicle used for a special(read particular) purpose by its owners, what that purpose is depends upon the will of said owners, it is nothing else, no special entity, no different form of Limited company or LLP etc, merely a vehicle used for a particular purpose.

In effect like my gardening jumper, it is a jumper , no different to other jumpers except I use it especially when gardening. (and other outdoor work)

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Replying to DJKL:
Red Leader
By Red Leader
30th Jan 2020 11:37

I think you mean an SPJ.

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Replying to Red Leader:
RLI
By lionofludesch
30th Jan 2020 11:57

Red Leader wrote:

I think you mean an SPJ.

SPJ is a different thing entirely.

https://gerryanderson.fandom.com/wiki/Spectrum_Passenger_Jet

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Replying to Red Leader:
paddle steamer
By DJKL
30th Jan 2020 12:03

I do rather like a Jane but dare not say that in front of my wife.

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Replying to lionofludesch:
Red Leader
By Red Leader
30th Jan 2020 10:37

lionofludesch wrote:

Where's Captain Black when you need him to explain what an SPV is ?

https://www.ebay.co.uk/i/254473639248?chn=ps&norover=1&mkevt=1&mkrid=710...

Oh come ye back, Captain Scarlet, we need you now!
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Replying to lionofludesch:
paddle steamer
By DJKL
30th Jan 2020 11:46

It's a Mysteron where he went; my hero back then was Captain Scarlet not Captain Black. (I vaguely recall having a toy SPV at some point, but with all my toys ruthless parents tended to give them away as I grew up- if they had foreseen E Bay I would be raking in the money now)

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By The Dullard
30th Jan 2020 10:55

What a waste of food.

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By Ramcri
30th Jan 2020 13:32

Since quite a lot of replies here are a waste of time, hopefully if someone else reads this, finds my research helpful. Following a few outside of this forum research (FREE OF CHARGE ): lenders don't like changing a normal trading company into an SPV. And though SPV is a limited company, if the purpose is to end up having more properties in time then its best to set it up as SPV for buy to let and property management. Lenders tend to apply higher rates if you're not an SPV thus buying via any other company is discouraged. So the problem for anyone with any other types of LTD except for SPV for buy to let is that there is not a lot of finance options available. Perfectly reasonable to do so though if no loans are needed.

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Replying to Ramcri:
RLI
By lionofludesch
30th Jan 2020 14:00

Unbelievable.

You complain about answers being a waste of time and then proudly tell us that you found everything you needed on the internet.

Well, well done you !!

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Replying to Ramcri:
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By Tax Dragon
30th Jan 2020 14:48

Unbelievable.

You talk as if an "SPV" is a specific legal form of something.

I also don't believe your findings. If you wanted to be helpful, as claimed, you'd post (links to) the source(s).

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Replying to Tax Dragon:
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By Ramcri
30th Jan 2020 17:54

Sorry to break your heart, but I actually talked to people who know what they talk about

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Replying to Ramcri:
paddle steamer
By DJKL
30th Jan 2020 16:01

You might consider two or more beasties there ,not one, a propco and a manco, often a devco or two is also useful and a construct co can also be handy.

Some developer/investors stuff each property into its own single beastie, others (like us) run portfolio positions in some beasts and have single asset beasties floating about, but as said before, a SPV is merely any beastie used for a purpose; we these days have our highest property borrowing amount in a partnership (though we no longer do residential)

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Replying to DJKL:
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By Ramcri
30th Jan 2020 17:56

Thank you. Yes, it always made sence that SPV is a type of limited company, namely a company with restricted SIC.

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Oaklea
By Chris.Mann
30th Jan 2020 17:28

I'm only seeing one thing that's "Special" on here and, it ain't the SPV

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Replying to Chris.Mann:
paddle steamer
By DJKL
30th Jan 2020 18:32

Radiohead?

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Replying to DJKL:
Oaklea
By Chris.Mann
31st Jan 2020 09:40

An unusual lyric

You're so (*****) special

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