Why the SPV Structure Has Become the Investor Default
Since Section 24 restricted personal mortgage interest relief, Special Purpose Vehicle (SPV) limited companies have become the standard holding structure for new buy-to-let acquisitions by higher-rate taxpayers.
An SPV is simply a limited company created solely to hold property. It files its own accounts, pays Corporation Tax on profits, and allows directors to extract income via salary and dividends. The key advantage: 100% of mortgage interest remains deductible against company profits, unlike the 20% tax credit restriction for individual landlords. The key disadvantage: buy-to-let mortgage rates for companies run 0.5–1% higher than personal rates, and dividend tax applies on extraction. A specialist broker and accountant should model both scenarios before committing.