SPV (Special Purpose Vehicle)

A Special Purpose Vehicle (SPV) is a limited company formed for a specific, defined purpose - in property investment, exclusively to hold and manage property assets. The SPV has no other business activities.

Using an SPV for BTL investment provides the tax advantages of corporate ownership (mortgage interest remains fully deductible, corporation tax rates on profits, no Section 24 restriction) while keeping the property portfolio legally separate from the investor's other activities.

A typical property investment SPV has: - A clear property-related name (e.g., "Smith Property Investments Ltd") - Standard Articles of Association - SIC code 68209 (other letting and operating of own or leased real estate) - One or more directors who may also be shareholders - A bank account used exclusively for property-related transactions

From a mortgage perspective, most BTL lenders who will lend to limited companies prefer SPVs over trading companies. Demonstrating that the company was set up purely for property and has no other liabilities makes the underwriting straightforward.

For couples or business partners, an SPV allows flexible ownership structure through different share classes and can be a useful vehicle for joint investment.