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

Introduction

Frustrated by how much tax you might pay on your rental income? If you’re growing a property portfolio, using a limited company might be the smartest financial move you make — if you set it up right from day one.

Using a Special Purpose Vehicle (SPV) limited company can offer serious tax advantages, limited liability, and access to better mortgage options. But too many landlords rush into it without proper advice — choosing the wrong SIC code, mixing business and personal finances, or failing to meet lender criteria. These mistakes can cost you time, money, and mortgage approvals.

As a mortgage broker who specialises in SPV and limited company buy-to-let mortgages, I’ve helped landlords across the UK build their portfolios the smart way — avoiding pitfalls and securing better deals from day one.

In this blog, I’ll walk you through a straightforward 12-step guide to setting up your SPV the right way — so you can invest with confidence and clarity.

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

An SPV is a limited company used solely for buying and holding property. It’s ideal if you’re looking for tax advantages, limited liability, and easier access to certain mortgage products. However, it’s not always the best option for every investor, so weigh up the pros and cons with your accountant or advisor.

If you’re a first-time landlord, you may also want to explore whether an SPV is necessary right away or if starting with a buy-to-let mortgage is more suitable.

2. Choose the correct SIC code 

When setting up your SPV, choosing the right Standard Industrial Classification (SIC) code is vital. It tells lenders your company is used exclusively for property investment — which makes it easier to get buy-to-let mortgage approval.

The most common lender-approved SIC codes include:

• 68100 – Buying and selling of own real estate

• 68201 – Renting and operating of Housing Association real estate

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

• 68320 – Management of real estate on a fee or contract basis

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.

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.

By avoiding these errors from the start, you’ll set up a lender-friendly structure that supports your long-term goals — and saves time, money, and stress.

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4. Pick a relevant company name

Your SPV’s name should reflect its professional purpose and not appear overly personal or unrelated to property. Something simple and descriptive is best – like “Peniel Property Ltd” or “West Wales Property Investments Ltd”.

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.

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.

7. Set up your accounting and tax structure

Appoint an accountant who understands property investment through SPVs. They’ll help you manage:

• Corporation Tax
• Annual returns
• Dividend structure
• Mortgage interest relief

Keeping your books clean is crucial for both compliance and funding.

8.Notify your accountant early

Before buying any property, run your plans past your accountant. They can help you make tax-efficient decisions, and flag any issues early on – particularly around stamp duty, capital gains tax, or ownership splits.

9. Understand lender requirements for SPVs

Many buy-to-let lenders offer limited company mortgages, but they prefer SPVs with no trading history or unrelated business activity.

If your portfolio doesn’t meet the required rental income coverage, you could face ICR (Interest Coverage Ratio) failures, which can lead to declined applications. Understanding lender expectations upfront is key to avoiding these pitfalls.

10. Secure a mortgage with a specialist broker

Don’t assume your usual high street lender will help – most SPV buy-to-let mortgages are accessed through specialist brokers. I work with over 170 lenders, including those who cater specifically to SPVs, portfolio landlords, and limited companies.

If you’re unsure how lenders assess your affordability, read my mortgage stress testing guide to see how your application might be scrutinised.

11. Keep your SPV compliant

Once up and running, your SPV must submit:

• Annual accounts to Companies House
• Corporation Tax returns to HMRC
• Confirmation statements
  Failure to keep up with admin can affect your credit profile and mortgage eligibility.

12. Keep personal and business finances separate

Never mix SPV income with personal finances. All rental income, expenses, and mortgage payments should flow through the company’s bank account. It’s cleaner, simpler, and keeps your liability limited.

Thoughts: Build your portfolio the smart way

Setting up an SPV is more than just ticking a few boxes — it’s about creating a tax-efficient, lender-friendly structure that supports your long-term property goals.

I provide personalised services, so when you work with me, you’ll have direct access to specialist advice with a human touch. From SPV setup to securing the right mortgage, I’ll guide you every step of the way.

📞 Call me directly on 0808 503 4714 or 07508 147884
📩 Email me at lyndsey@westwalesmoney.co.uk
🌐 Visit westwalesmoney.co.uk

With expert advice and a personalised approach, you’ll have direct access to someone who listens, understands, and finds the right solution—without the stress.

#SPVMortgage #BuyToLet #PropertyInvestment #LimitedCompanyLandlord #SPVSetup #WestWalesMoney 

➡️ Want help setting up your SPV or exploring your buy-to-let options? Book a complimentary call today.