Best Property Investment Structure For your Property Portfolio

It is normal for the property investors to wonder what investment structure is best for their investment properties for ownership, i.e. whose name should be on the title. Should you purchase properties in your personal name, through a trust, or under a company structure?

The two main investment structures that are generally used are through personal ownership, or via a Property SPV. And the decision to choose an ownership structure usually feels a bit overwhelming- here are few key considerations you need to factor in your decision too, including:

• Asset Protection
• Tax Implications
• Costs & Complexity of the Ownership Structure

Owning Property in Your Personal Name

Personal Ownership is the general way of owning property on your own. You are liable for your finances and face the risks of being personally liable for any debts and loans.

When you choose to own an investment property in your personal name, the income and capital gains generated by the property are subject to taxation based on your personal marginal tax rate. It is a fairly straightforward and prevalent approach.

This ownership structure is often easiest to set up and manage, but it is important to understand its advantages and drawbacks to ensure it aligns with your investment goals.

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Pros:

• Simplicity – Owning a property in your name is straightforward and simple which would require minimal setup and ongoing administration.
• Easy to Understand – Personal Ownership is a familiar and easily understandable structure, with clear tax implications.
• Control – You have complete control over the property and investment decisions.

Cons:

• Unlimited Liability – Your personal assets, including your family home, are at risk if you are sued or incur debt related to the investment property.
• No Asset Protection – Your personal assets are exposed to risks related to the investment property.
• No Tax Efficiency – The property’s income is taxed at your personal marginal rate, which may be higher than other structures like trusts or companies

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Owning Property through SPV

A SPV is a distinct entity established by a company to isolate financial risk and minimise the negative impact on the parent company and its investors. It serves various purposes, such as managing risk, securitising debt, or consolidating capital for startup investments by venture capitalist.

Some SPVs hold a single property, while others manage a portfolio. For those managing multiple properties, a series LLC may be used. Joint ventures and co-ownership structures are often used in large development projects requiring significant capital.

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Pros:

• Risk Management – Managers can better handle investment risk by separating the assets and liabilities, of the parent company, limiting exposure and reducing potential losses.
• Tax Efficiency – SPVs could provide tax benefits, as they can be established in a tax efficient jurisdiction to reduce taxed on income and capital gains.
• Operation Flexibility – SPV can be structured in various ways based on clients’ needs and goals because they can be formed as debt, equity or hybrid vehicles.

Cons

• Lack of Transparency – One of the main problems with SPVs, although not always is lack of transparency.
• Leverage – Moreover, many special purpose vehicles may be highly leveraged to achieve greater benefits, which could result in significant losses if debt is not managed by professionals.
• High Complexity – Creating and managing an SPV is not a simple and inexpensive task. Investors or entrepreneurs must carefully analyse the benefits of incorporating such a vehicle into their strategy, as it may entail administrative and legal costs for adding separate records, financial statements.

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Factors to Consider While Making Investment Decision

Tax Position & Income Bracket

Your tax rate plays an important role in determining the most tax-efficient investment structure.

Personal Ownership – Your rental income is taxed as part of your overall income. If you are a basic-rate taxpayer (20%), the tax impact is moderate. But if you are a higher-rate (40%) or additional rate (45%) taxpayer, your rentals profits are heavily taxed.

SPV – Profits are taxed under Corporation Tax (19-25%). If you reinvest profits, your effective tax rate can be much lower than personal Income Tax.

Mortgage Interest Deductibility

Mortgage interest deductibility will also play crucial role.

Personal Ownership – Individuals cannot fully deduct mortgage interest as an expense. Instead, they get a flat 20% tax credit- which reduces tax relief for high-rate taxpayers.

SPV – 100% of mortgage interest is deductible as a business expense before profits are taxed. This can significantly reduce your tax liability, especially with high leverage investments.

Administrative Burden

Personal Ownership – There will be minimal paperwork as just declaration of rental income on your Self Assessment Tax Return is required. Similarly, no corporate accounting or annual filings are required.

SPV – You must incorporate a limited company usually via Companies House. Similarly annual company accounts should be filed, Corporation Tax Returns are to be submitted, and accounting records should be maintained.

Capital Gains Tax (CGT) & Inheritance Tax (IHT)

Personal Ownership – You get an annual CGT exemption (£3000 per person for 2025/26). The CGT on property is currently at 18% (basic rate) and 28% (higher rate). On death, property value forms part of your estate and is subject to 40% IHT (after the nil-rate band).

SPV – There is no CGT allowance for companies and capital gains are taxed via Corporation Tax when the company sells. Similarly, shares in the company can be gifted, sold, or passed to heirs, offering more flexible IHT planning.

Legal & Financial Liability

Personal Ownership – You will be personally liable for property damage, tenant disputes and mortgage defaults. Your personal assets could be at risk if something goes wrong.

SPV – The company owns the property so the limited liability will protect your personal finances.

Conclusion

The choice between SPV and personal ownership as your preferred investment structure will ultimately depend on your investment goals, tax position and how you plan to manage and scale your property portfolio.

Each structure offers distinct advantages and trade-offs—SPVs provide corporate tax benefits and limited liability, while personal ownership offers simplicity and direct access to income.

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FAQs

• What is an SPV in property investment?

An SPV (Special Purpose Vehicle) is a legal entity, typically a limited company, created specifically for owning and managing one or more properties.

• What are the main benefits of personal property ownership?

Personal ownership is simpler and less costly to set up. It is ideal for those with 1-2 properties and those seeking to access rental income directly.

• What are the risks of using an SPV?

The risks of an SPV include higher set up costs, administrative burden and potentially higher mortgage rates compared to personal ownership.

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