My mother is in debt

The selection of either option depends on several tax, legal and business factors and as such is an interesting issue. However, below we shall focus on the simple opportunity for tax optimization upon the acquisition of a company owning real estate. At the same time, to acquire a company owning real estate and with clear commercial potential generally requires the employment of considerable funds. Investors usually decide to fund the acquisition using both capital and debt, whereas such debt may be internal (a loan granted within the investor’s group) or external (a bank loan to purchase the shares), or a combination of the two options. Thus, the above acquisition scheme is ineffective. However, it could be modified so as to combine interest costs related to funding the SPV acquisition and the income generated from the real estate.The tax group solution is commonly applied in other European countries. Hence, the income and costs of the SPV and the Holding Company can be combined.