12 Steps to Set Up an SPV Limited Company for Buy-to-Let Success

Avoid Costly Mistakes When Building Your Portfolio

If you’re planning to invest in buy-to-let properties through a limited company, setting up an SPV (Special Purpose Vehicle) is a smart move. It can make your portfolio more tax-efficient, simplify mortgage applications, and help separate personal and business finances. But setting it up properly is essential — and that’s where tailored SPV mortgage advice makes all the difference — (Click here to learn more).

Here’s a step-by-step guide to help you avoid common pitfalls and lay strong foundations for your SPV.

1. Decide if an SPV is right for your investment goals

SPVs are limited companies created solely for property investment. They’re especially useful for landlords building a portfolio or planning to expand in the future. Whether you’re just starting out or transitioning from personal ownership, it’s crucial to understand how lenders assess SPVs differently. That’s why seeking SPV mortgage advice early can save you both time and money.

👉 Outcome: Gain clarity and control over your property investments while laying the groundwork for long-term tax efficiency.

 2. Choose the correct SIC code 

Lenders expect your SPV to use a specific Standard Industrial Classification (SIC) code linked to property letting. The most commonly accepted codes include:

• 68100 – Buying and selling of own real estate

• 68209 – Other letting and operating of own or leased real estate

Stick with property-only codes. Don’t be tempted to include unrelated business activities like consulting, construction, or property development unless you’ve discussed this with your broker or accountant.

👉 Outcome: Avoid lender rejections by ensuring your company is properly classified for mortgage eligibility.

3. Common Mistakes to Avoid

Too many landlords rush through the SPV setup process — and it can cost them later in tax, lending issues, or compliance. Here are some of the most common (and costly) mistakes I see:

• ❌ Choosing the wrong SIC code – It confuses lenders and can result in declined applications.

• ❌ Mixing personal and business finances – This undermines the SPV’s legal structure and complicates tax.

• ❌ Using a trading company instead of a clean SPV – A company with other activities or trading history is far less attractive to lenders.

• ❌ Not taking tax advice upfront – Stamp duty, capital gains, or dividend planning can trip you up later.

• ❌ Naming the company poorly – Overly personal or vague names can appear unprofessional to lenders.

Lenders vary in their SPV requirements. Some require minimum ICRs (Interest Coverage Ratios), experience, or specific ownership structures. That’s why working with a specialist in mortgages for portfolio landlords helps keep your application on track — Click here to learn more

👉Outcome: Set yourself up for success and avoid the pitfalls that can stall mortgage applications or lead to compliance issues.

4. Pick a relevant company name

Choose a name that clearly reflects your property investment business. Lenders prefer straightforward names over overly creative ones. Including “Properties” or “Holdings” can be helpful.

👉 Outcome: Make your business appear credible and focused when applying for mortgages or dealing with accountants.

5. Appoint directors and shareholders

Most lenders prefer the directors and shareholders to be the same individuals – and ideally, you want minimal cross-ownership with other businesses. Keep the structure clean and simple to make mortgage applications easier.

👉 Outcome: Align your ownership with your long-term tax planning and estate strategy.

6. Open a dedicated business bank account

Once your company is registered, open a business bank account in the SPV’s name. This helps keep your finances separate, and you’ll need it when applying for mortgages or receiving rental income.

👉 Outcome: Stay compliant and make financial tracking easier come tax season.