A guide to buying UK property via an SPV
This guide is for property professionals, property lawyers and investors who are considering the purchase of a property SPV. It is based on over 20 years’ experience of advising on these types of transaction.
The guide includes materials contributed by LCN Legal to a practice note published by Lexis Nexis as part of Lexis PSL, the information service for practising lawyers in the UK. That practice note is available only to LexisPSL subscribers, but we have negotiated the ability to make it available to LCN Legal’s clients and contacts free of charge.
Property SPV transactions have different risk profiles and require a different approach
Buying the shares in a property SPV can appear to be attractive because of the possible savings in transaction taxes, notably Stamp Duty Land Tax. It may also be an appropriate approach when dealing with the purchase of a portfolio of properties.
However, these transactions have a completely different risk profile when compared to a direct property purchase. This is essentially because the prospective buyer “inherits” any hidden liabilities in the SPV itself, and is far more reliant on recourse against the seller to protect against those issues. This all represents risks for the buyer – in terms of wasted costs if the transaction aborts at a late stage, and unexpected liabilities if the transaction does proceed. It also represents risks for advisers if they fail to manage those risks and the transaction appropriately.
What you can expect from this guide
The aim of this guide is very simple – it is to answer the most common questions that our clients ask when they are starting out on this kind of project.
The guide outlines is in the form of a 16-page, 3,195 word report, and outlines some of the key legal differences between property SPV transactions and direct property purchases. It also sets out some practical issues which practitioners should be aware of when advising on a transaction of this nature.
We hope that this will help you get your project off on the right foot, and completed on time and on budget.
Download your free copy of our guide to buying UK property via an SPVGuide Download (.pdf)
Acknowledgements and important notice
Special thanks go to Paul Smith, a tax partner at Blick Rothenberg LLP, who very kindly provided comments on the tax content of this guide.
This guide is provided on an “as is” basis. Readers should take their own professional advice, and this document should not be relied upon as a substitute for advice. No responsibility is accepted by LCN Legal Limited or any other contributors, or any of their respective directors, partners, employees, agents or representatives for any cost, loss or liability, however caused, incurred by any person by reliance on it.
I had extremely valuable assistance and advice from Paul, not only as regards general corporate law matters, but across a wide spectrum of legal aspects of SEWS-E Ltd group transfer pricing policies, implementation, inter-group agreements and legal compliance."
Martin L Kinsey, Group Tax Manager - Sumitomo Electric Wiring Systems (Europe)