InterCompany Loan Structure for a Property Investment Group
£1,750,000 · 25 years · 5.59% fixed 5 yrs. A sophisticated property investor operated two limited companies - a trading company and a property SPV.
The Client
Sophisticated property investor
The Challenge
A sophisticated property investor operated two limited companies - a trading company and a property SPV. He wanted to fund property purchases through an inter-company loan from the trading company into the SPV, with the SPV taking the mortgages. The lender needed to be comfortable with the inter-company loan as part of the equity stack.
Our Solution
Doulton identified a limited company BTL lender experienced in group structures who could assess the inter-company loan within the equity analysis. The trading company's accounts evidenced the source of funds. A specialist property solicitor documented the inter-company loan agreement to the lender's requirements.
The Outcome
Four properties purchased through the SPV using the inter-company loan as equity. The structure enabled tax-efficient capital deployment from the trading company into property without personal withdrawal. Accountant confirmed material tax efficiency versus personal equity injection. Key highlights: Inter-company loan structure accepted by specialist lender; Source of funds fully documented - clean underwrite; Tax-efficient capital deployment confirmed by accountant.
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