Purchasing BTL property under a SPV

Milly_123

Hi all, 
I intend to sell my current property and purchase a larger property with the equity; however I am considering whether setting up an SPV and purchasing my current property as a BTL is a viable option. I have done a lot of googling and think I have a good idea of what it would involve, but would be grateful if you could point out anything you think I have not considered or have misunderstood! 
- I have lived in my current property (I was a first time buyer) since 2013. Value is £130,000.
- My intention was to sell my current property this year and buy a larger property nearby. 
- I have discovered that the metrolink is being extended to very near my current property within the next few years, which is expected to increase property prices in the area, and I started to wonder whether I was missing an investment opportunity. 
- My idea is to set up an SPV and take out a BTL mortgage, leaving 20% equity in the property and taking the remaining equity for the deposit towards my new home.
- I understand that I (well, the SPV) would need to pay stamp duty, but that no capital gains tax is payable as it's been my main residence. I am hoping that I will be able to arrange the mortgage etc prior to the end of March 2021 so I would only need to pay 3% stamp duty - this may be wishful thinking / complete naivety as I understand that there is currently a backlog with everybody trying to complete by this date! However I was hoping it may be quicker as I don't need to do searches, queries etc as I already own the house - I only need a mortgage. 
- I would then ideally stay in the property for a couple of months whilst I purchase my new home, paying 'rent' to the SPV to cover the mortgage; then find a permanent tenant and grant an AST once I move out. I'm not sure if me staying here for a couple of months would be an issue - if so, I could either get a tenant straight away and move out and stay with family temporarily, or otherwise delay the SPV purchase (but miss the stamp duty window). 
- I have calculated that after paying the mortgage, landlord insurance, corporation tax and general upkeep / maintenance, there would be less than £100 profit per month - but as above, I am thinking more about the long-term equity.
- I know I could keep the property in my name and still take out a BTL mortgage but this would cause a major issue for me - I intend to complete the process for adopting 2 siblings next year - I would be reliant on UC to help me pay 2 x sets of nursery fees for the first few years (yes I work full time but am a single adopter) - however with the property in my name, I wouldn't be entitled to UC as it's classed as capital and I simply cant afford the nursery fees without it. 

In summary, my questions are: 
1. Is there any chance I would be able to complete this by the end of March? Or are there delays at mortgage companies too? 
2. Would it cause an issue if I were to stay in the property for the first few months and rent it from the SPV? 
3. Does anybody know how directors loans work? I understand that the 20% equity would be classified as a 'directors loan'. Would the SPV still need to pay corporation tax on the monthly rent income, then use the remainder to repay the loan to me - or is the monthly rental income not classed as profit until the loan has been repaid? 
4 Is there any other potential issues / implications that i haven't thought of? 

Apologies for the length of this - I have tried to summarise as much as possible! Thank you in advance for any advice. 

AdrianC

Milly_123 said:

- I would then ideally stay in the property for a couple of months whilst I purchase my new home, paying 'rent' to the SPV to cover the mortgage

This bit alone is a showstopper - it'd count as "sale and rent back" (SARB), and the company would need to be FCA regulated to do it.

That apart, most BtL mortgages are 75% LtV max, and you want 80%. Also, the SPV Ltd would need to be the borrower.

You would be the 100% shareholder of the SPV, right? So you would still be the ultimate beneficial owner of the property for universal credit...

Just sell the place now. If the public transport improvements are already public, then the area will start to benefit in expectation of the better links.

Milly_123

AdrianC said:

Milly_123 said:

- I would then ideally stay in the property for a couple of months whilst I purchase my new home, paying 'rent' to the SPV to cover the mortgage

This bit alone is a showstopper - it'd count as "sale and rent back" (SARB), and the company would need to be FCA regulated to do it.

That apart, most BtL mortgages are 75% LtV max, and you want 80%. Also, the SPV Ltd would need to be the borrower.

You would be the 100% shareholder of the SPV, right? So you would still be the ultimate beneficial owner of the property for universal credit...

Just sell the place now. If the public transport improvements are already public, then the area will start to benefit in expectation of the better links.

Thanks Adrian, I appreciate your quick response. 
Hmm I wouldn't need to stay in the property afterwards (this was mainly just a convenience), I could keep 25% equity in if needed and am happy to have the SPV as the borrower. 
However the sticking point is the UC - I didn't know that I would be considered the beneficial owner so it would still be taken into consideration - so I guess I need to forget the idea!