Over 330 rental properties have been incorporated into a single company - thought to be the largest single incorporation in the UK.
It was undertaken by SPF Private Clients, took over a year to arrange and had to be executed on a single day to qualify for business rollover relief and avoid significant Capital Gains Tax.
“Incorporating on any scale, but particularly this one, is a specialist area that needs advisers who know what they are doing. The client has hundreds of properties with mortgages with various lenders – the objective was to create a company with sufficient funding to purchase the portfolio from him, and to complete every new mortgage on the same day” explains Howard Levy, director of buy to let finance at SPF Private Clients and the man who engineered the incorporation.
He continues: “I brokered the new finance to six lenders, with each of those having a number of staff specifically assigned to liaise with me to get the transaction completed.
“Just as we got going, the world changed. Everyone was working from home on laptops. Some valuers were taking bookings but tenants didn’t want to let strangers into their homes. I was dealing with 13 lenders to redeem the former finance, five legal firms – each with a number of solicitors to cope with the sheer volume of paperwork – and I lost count of the number of valuers.
“Timing was paramount as each valuation has a finite life, and subsequently many of these had to be extended. Covid-19 made everything more difficult. Obtaining responses from freeholders, service charge statements, ground rents and other legal requirements takes time in the normal run of things but everything was much slower.”
Two of the lenders involved in the deal have also commented.
“The sheer scale of this transaction meant the client needed the sure-footed guidance of a broker and lender with deep subject matter expertise. The result achieved is an outstanding example of what can be done with the right advice and right choice of lender” explains John Eastgate, managing director of property finance at Shawbrook Bank.
And Alan Cleary, group managing director of Kent Reliance for Intermediaries, adds: “We have done quite a few of these large-scale incorporations, although this is the largest we have seen from an individual to a limited company.”
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