For UK property investors, one of the most important decisions is whether to invest in rental property as an individual (Buy-to-Let) or through a Setting Up a Special Purpose Vehicle for Property Investment. Both approaches have particular financial, tax, and operating benefits, and as such it is important to examine which structure best suits your investment strategy.
This article compares and contrasts Buy-to-Let and SPVs, noting the advantages, tax treatment, and key points in order to facilitate an informed choice for the investor.
Taxation: Personal Liability vs. Corporate Liability
One of the most marked differences between Buy-to-Let and SPVs is taxation:
- Buy-to-Let: Rental income is taxed as individual income. Higher-rate taxpayers pay 40% or even 45%.
- SPV: Rental receipts are subject to corporation tax, which is likely lower than personal high-rate tax.
In addition, Buy-to-Let landlords have been subjected to reduced mortgage interest relief under Section 24, but SPVs can offset all mortgage interest as a business expense, reducing taxable profits.
Financing and Mortgage Issues
Mortgage availability and affordability are varied in these two structures:
- Buy-to-Let: Standard mortgages are readily available, although lenders may apply tighter affordability tests.
- SPV: While mortgage products are more niche, lenders prefer SPVs due to the structured nature of property ownership.
SPV mortgages may involve personal director guarantees, which may raise personal financial exposure.
Administrative and Compliance Obligations
Both investment types involve some administrative work, but SPVs carry additional regulation:
- Buy-to-Let: Rental income is accounted for on the individual landlord’s personal tax return but involves little administrative work.
- SPV: Company accounts must be filed by investors, corporation tax paid, and Companies House requirements followed.
Whilst an SPV is more demanding in terms of management, it offers flexibility to investors who plan to diversify their portfolios.
Exit Strategy and Inheritance Planning
Long-term planning must be part of the decision between Buy-to-Let and SPVs:
- Buy-to-Let: Selling properties can lead to Capital Gains Tax (CGT) of 28% or more for taxpayers on higher incomes.
- SPV: Selling shares of an SPV instead of the property itself can reduce tax and ease estate planning.
SPVs introduce other succession planning options, allowing investors to pass shares on to beneficiaries more efficiently than the passing of individual properties.
Accounting firms rely on a variety of software tools to manage clients, track deadlines, and stay compliant. But when those tools don’t work well together, things can get messy—leading to duplicate work, missed updates, and frustrated staff. One of the most important (and often overlooked) areas for integration is engagement letter software.
Engagement letters are the foundation of a solid client relationship, setting clear expectations and protecting both parties. But if your engagement letter software isn’t properly integrated with the rest of your tech stack, you might end up spending more time than necessary chasing signatures, manually inputting client details, or hunting down documents.
So how can you make engagement letter software work seamlessly with your existing systems? Here’s a practical guide to getting it right.
Step 1: Take Stock of Your Current Tech Stack
Before you start integrating anything, it’s worth mapping out the software you already use. Most accounting firms rely on a combination of:
- Practice Management Software (PMS) – Platforms like Xero Practice Manager, Karbon, or AccountancyManager help manage client records, deadlines, and tasks.
- Accounting Software – Cloud-based systems such as Xero, QuickBooks, or Sage handle financials, tax returns, and reporting.
- Document Management Systems (DMS) – Tools like Google Drive, SharePoint, or dedicated accounting portals store client documents securely.
- E-Signature Software – Solutions like DocuSign or Adobe Sign allow clients to sign documents digitally.
Knowing how these tools interact will help you figure out the best way to integrate engagement letter software into your workflow.
Step 2: Choose the Right Engagement Letter Software
Not all engagement letter software is created equal. Some tools are designed to work smoothly with other accounting software, while others operate in isolation. When selecting engagement letter software for accountants, look for:
- Seamless Integration – Does it connect easily with your PMS, accounting software, and e-signature tools?
- Automation Features – Can it auto-fill client details, send reminders, and track engagement letter status?
- Regulatory Compliance – Does it meet industry standards like GDPR and ICAEW/ACCA requirements?
- Ease of Use – Is it intuitive for your team, or will it require extensive training?
Getting the right software from the start will save you a lot of headaches later.
Step 3: Sync It with Your Practice Management System
Your PMS is the heart of your accounting firm, keeping track of all client interactions. Integrating engagement letter software with your PMS can:
- Pull client information directly into engagement letter templates, reducing manual entry.
- Automatically send engagement letters when a new client is added.
- Track whether a client has signed their engagement letter, so nothing falls through the cracks.
This eliminates repetitive admin work and keeps everything in one place.
Step 4: Set Up Automation Triggers
The best integrations don’t just connect systems—they automate tasks. Here are a few ways automation can help:
- When a new client is added to your PMS, an engagement letter is generated automatically.
- If an engagement letter remains unsigned for a set period, a reminder email is sent.
- When an engagement letter is signed, the status updates in your PMS, and the document is stored in your DMS.
These small automation steps can save hours of admin work each week.
Step 5: Train Your Team and Test Everything
Even the best integration won’t be useful if your team doesn’t know how to use it. Before rolling out new engagement letter software, make sure your staff understand:
- How to generate and send engagement letters.
- How data flows between different systems.
- How to troubleshoot common issues.
Run a few test cases to ensure that information syncs properly before fully launching the new process.
