Detailed guide comparing share sales and property sales when selling an SPV property company, covering tax, SDLT, SSE and key legal risks.

Selling an SPV Property Company: Should You Sell the Shares or the Property?

Jonathan Lea January 16, 2026

Owners of property held within a special purpose vehicle (SPV) often assume that a sale will involve disposing of the property itself. In practice, there is usually an alternative, and often more tax-efficient, route: selling the shares in the company that owns the property.

The decision between a share sale and an asset sale is rarely straightforward. While selling the SPV can deliver significant tax savings and a cleaner exit, it also introduces additional legal complexity and risk. Understanding how these transactions work, and structuring them properly from the outset, is critical.

Buying a property SPV vs buying the property itself

A property SPV is typically a limited company established solely to own a specific property or portfolio, with no other trading activities. When the shares in the SPV are sold, the legal ownership of the property does not change; instead, control of the company transfers to the buyer.

This distinction has important tax consequences. A direct property sale attracts Stamp Duty Land Tax (SDLT) at residential or non-residential rates, often with additional surcharges for corporate or overseas buyers. For higher-value assets, SDLT can materially impact pricing and deal viability.

By contrast, a buyer acquiring the shares in an SPV will usually pay Stamp Duty at 0.5% of the consideration paid for the shares. On a £5m property, SDLT on a direct acquisition could exceed £250,000, whereas Stamp Duty on the share purchase would typically be £25,000. This differential often underpins buyer demand for SPV acquisitions.

Key advantages of selling or acquiring an SPV

Although SDLT efficiency is often the headline driver, SPV transactions offer a range of commercial benefits when properly structured:

Stamp Duty efficiency and pricing flexibility
The SDLT saving available to buyers can translate into a higher headline price for sellers. In competitive processes, buyers are often prepared to share part of their tax saving, improving the seller’s net outcome while still delivering value to the buyer.
Continuity of income and arrangements
Because the property remains vested in the same legal entity, leases, licences, planning permissions, supplier contracts and managing agent arrangements usually continue without interruption. This is particularly attractive where tenant consent would otherwise be required or where maintaining rental continuity is critical.
Potential for a smoother and quicker transaction
Share sales can involve fewer third-party consents than property transfers, reducing the risk of delay. While corporate due diligence can be extensive, the absence of landlord or tenant approvals can help streamline completion.

Substantial Shareholding Exemption: a key driver for sellers

For corporate sellers, one of the most significant advantages of selling an SPV can be the availability of the Substantial Shareholding Exemption (SSE). Where it applies, SSE can result in no corporation tax being payable on the gain arising from the sale of shares.

In broad terms, SSE may apply where:

the seller has held at least 10% of the ordinary share capital in the SPV;
that shareholding has been held for a continuous period of at least 12 months within the six years prior to disposal; and
both the seller and the SPV meet the relevant trading or investment company conditions at the appropriate times.

In a property context, SSE is frequently available where a corporate group holds SPVs as long-term investment vehicles. However, qualification should never be assumed. The conditions are technical, and seemingly minor changes to group structure, shareholdings or activity can affect eligibility.

Early tax advice is essential. In some cases, advance planning — such as restructuring shareholdings or ensuring the correct classification of the SPV — can be the difference between a tax-free disposal and a significant corporation tax charge.

Risks and common pitfalls in SPV sales

Despite the benefits, SPV transactions are not without risk, particularly for buyers:

Inherited liabilities within the company
A buyer acquiring shares steps into the company’s entire history. This includes historic tax exposure, regulatory non-compliance, unresolved disputes and contractual liabilities. Issues that are not apparent at completion can emerge long afterwards.
Reliance on warranties and disclosures
Warranties and indemnities are central to risk allocation in a share sale, but they are not a substitute for proper due diligence. Poorly drafted warranties, incomplete disclosures or a seller with limited covenant strength can significantly undermine their value.
Funding and lender constraints
Some lenders are cautious about funding share purchases, particularly where they cannot take direct security over the property. Buyers should engage with funders early to confirm whether a share acquisition is acceptable and what additional requirements may apply.

Structuring the transaction to protect both parties

A well-run SPV sale will usually begin with detailed Heads of Terms, addressing price, debt, cash extraction, and the proposed approach to warranties and tax protection.

Legal due diligence is carried out on both the company and the property, covering corporate records, accounts and tax filings, alongside leases, licences, planning and service contracts. The share purchase agreement then allocates risk through warranties, tax covenants and liability limitations, supported by detailed disclosure.

Ancillary documents — including board minutes, director resignations and appointments, and stock transfer forms — ensure that the transfer of ownership is implemented cleanly. Where finance is involved, solicitors will also liaise closely with lenders to satisfy all conditions prior to completion.

Conclusion

Selling an SPV property company can deliver substantial tax and commercial advantages, particularly where SDLT savings and the Substantial Shareholding Exemption are available. However, these benefits come with increased complexity and risk, especially around inherited liabilities and funding.

Our solicitors combine corporate and real estate expertise to manage SPV transactions from start to finish, working closely with tax advisers and lenders to structure deals efficiently and protect your position at every stage.

If you are considering selling a property SPV, or acquiring one, speak to our specialist team for tailored, pragmatic advice. We usually offer a no-cost, no-obligation 20-minute introductory call as a starting point or, in some cases, if you would just like some initial advice and guidance, we will instead offer a one-hour fixed fee appointment (charged from £250 plus VAT depending on the complexity of the issues and seniority of the fee earner).

Please email wewillhelp@jonathanlea.net providing us with any relevant information or call us on 01444 708640. After this call, we can then email you a scope of work, fee estimate (or fixed fee quote if possible), and confirmation of any other points or information mentioned on the call.

Questions and answers: more technical issues in SPV property sales

Does SDLT ever apply to a share purchase?: In most straightforward SPV transactions, Stamp Duty at 0.5% applies. However, complex structures involving partnerships, trusts or linked transactions can trigger SDLT or anti-avoidance rules. Specialist tax input is essential in non-standard structures.
What happens to capital allowances on a share sale?: Capital allowances remain within the SPV and transfer to the buyer. Buyers should confirm that allowances have been properly claimed and documented, as historic errors can materially affect post-completion tax efficiency.
How are historic VAT risks dealt with?: VAT is a frequent risk area in SPV transactions. Issues with option-to-tax elections, VAT on rents or service charges, or historic non-compliance can result in significant liabilities. These are typically addressed through detailed due diligence, warranties and, where appropriate, specific indemnities.
Is SSE guaranteed if the shareholding threshold is met?: No. Meeting the 10% shareholding test is only one element of SSE. Holding periods, group structure and the nature of the company’s activities all matter. Sellers should not assume SSE applies without detailed analysis.
Do building safety or environmental liabilities transfer in a share sale?: Yes. Because the SPV remains the property owner, any historic or future liabilities — including cladding remediation or environmental obligations — remain within the company and pass to the buyer. These risks must be carefully investigated and addressed contractually.

* VAT is charged at 20%

This article is intended for general information only, applies to the law at the time of publication, is not specific to the facts of your case and is not intended to be a replacement for legal advice. It is recommended that specific professional advice is sought before relying on any of the information given. © Jonathan Lea Limited.