Special purpose vehicle (SPV) meaning

The Tower One St George Wharf Ltd v HMRC [2022] UKFTT 154 (TC) A corporate group was progressing a site for residential use as a development project. The concluding phase involved a 50‑storey tower, which they planned to place into a special purpose vehicle (SPV) to ring‑fence exposure to risk and potential liabilities, and to secure greater financial flexibility for the project as a whole. After consulting their tax advisers, the group executed a sequence of transactions on the very same day intended to step up the tax cost of the scheme, so the SPV would be treated as acquiring it at market value, with no tax liabilities arising along the chain overall. In outline, the company that owned the property granted a 999‑year lease to another group entity, B64. The shares in B64 were then purchased by...

The Tower One St George Wharf Ltd v HMRC [2025] EWCA Civ 1588 A corporate group developed a residential scheme, with the concluding phase being the transfer of a 50‑storey tower block to a special purpose vehicle (SPV) to ring‑fence risks, contain potential liabilities and improve financial flexibility. After consulting tax advisers, the group executed a set of same‑day steps intended to ‘step up’ the tax cost of the project, so the SPV would be treated as acquiring it at market value without tax charges arising en route. In broad terms, the property‑owning company granted a 999‑year lease to another group entity, B64. The appellant, incorporated to serve as the SPV, then acquired the shares in B64, and the lease was subsequently transferred to it by way of distribution. After an HMRC enquiry, the appellant accepted the planning had not produced the anticipated tax advantage. HMRC then assessed the appellant to SDLT on the lease’s market value at the residential rate. The company appealed on the basis that it...

Types of special purpose vehicle and orphan trust The deployment of special purpose vehicle structures is widespread in aviation finance. They offer lenders several advantages, including tax benefits and a bankruptcy-remote platform for the financing. A special purpose vehicle (SPV), also known as a single purpose company (SPC), is a legal entity established for a limited aim; in aviation finance this is commonly to own an aircraft for a particular transaction. There are numerous forms of SPV used in aviation finance, with the principal categories being: subsidiary companies orphan trusts limited partnerships Each of these is considered below. The type of SPV selected will vary on a transaction-by-transaction basis. Subsidiary companies Subsidiary companies are typically limited liability companies incorporated in a tax-friendly jurisdiction...

Tax is a key consideration when selecting an appropriate structure for holding UK commercial property. The prevailing route for investing in UK commercial property is typically a UK‑incorporated, tax‑resident limited company. Non‑UK investors have also gravitated towards offshore ownership for investment, commonly via a non‑UK resident special purpose vehicle (SPV). Following reforms to the taxation of gains realised by non‑UK residents on UK immovable property from 6 April 2019, and to the taxation of property income of non‑UK resident companies from 6 April 2020, non‑UK resident companies that hold UK commercial assets now fall within UK corporation tax on gains (subject to certain exemptions) and on rental income. As a consequence, a number of the core tax attractions of using non‑UK resident SPVs to own UK commercial property have been curtailed. Nevertheless, acquiring UK commercial property through an offshore SPV remains a widely used and popular structure for many investors. It can still continue to provide a saving in stamp duty land tax when compared with purchasing the underlying...

Rationale Securitisation is the transfer of sizeable portfolios of income‑generating assets to a special purpose vehicle (SPV). The SPV finances the purchase price by issuing interest‑bearing securities—commonly termed ‘bonds’ or ‘notes’—into the capital markets. These securities benefit from security over the assets and/or the cashflows they produce (the ‘receivables’). Cashflows from the receivables are applied to pay interest and to repay principal on the securities. Types of receivables that can be securitised include: mortgage payments bank loan repayments lease/rental payments credit card repayments insurance premium payments Benefits of securitisation include: cheaper borrowing—the SPV may achieve a higher credit rating than the debtor company (originator). Either the obligors for the receivables carry a stronger rating than the originator, or credit rating agencies may find it simpler to rate a single asset (the receivables) rather than the originator, which presents more variables...