Limited Company SPVs purchasing property benefit from Corporation Tax rates on rental profits rather than the 40–45% personal income tax faced by higher
Limited Company SPVs purchasing property benefit from Corporation Tax rates on rental profits rather than the 40–45% personal income tax faced by higher-rate individual landlords.
Limited Company SPVs purchasing property benefit from Corporation Tax rates on rental profits rather than the 40–45% personal income tax faced by higher-rate individual landlords.
As of 2024, the UK Corporation Tax rate ranges from 19% (for profits under £50,000) up to 25% (for profits over £250,000). This is remarkably advantageous compared to the personal tax regime, where successful investors easily fall into the 40% higher or 45% additional tax brackets on their rental income.
By acquiring property through a Special Purpose Vehicle (SPV), investors legally shield their rental profits from these punitive personal rates. Instead of extracting the cash (which would trigger dividend tax), savvy investors leave the profits within the corporate structure to compound, using the retained capital as deposits for further acquisitions. This compounding effect makes the SPV the ultimate vehicle for rapid portfolio scaling in the UK.