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“Should I move my buy-to-let properties into a limited company?” is one of the most common questions landlords ask, and there isn’t a single right answer. For some landlords, a property company — usually called an SPV, or Special Purpose Vehicle — produces real long-term tax savings and makes it easier to build a portfolio. For others, moving existing properties into a company triggers Capital Gains Tax and Stamp Duty Land Tax bills that outweigh anything it saves. The right answer depends on your existing portfolio, your future plans, and what you’re actually trying to achieve.
Personal ownership vs a property company
Owning personally means the property sits in your own name and rental profits are taxed through your Self Assessment return — simple to run, with lower ongoing costs and easier access to mortgage products, but profits are taxed at Income Tax rates of up to 45% and mortgage interest relief is restricted (Section 24).
An SPV is simply a limited company set up to hold investment property. Finance costs, including mortgage interest, are generally deductible in full when working out the company’s taxable profits, and Corporation Tax rates can be lower than higher rates of Income Tax — which is why SPVs suit landlords building larger portfolios or reinvesting profits rather than drawing them out. Set against that: company accounts and a Corporation Tax return every year, a more limited mortgage market, and further tax if you want to take the money out personally.
Buying a new property is a different decision from moving an existing one
This is where a lot of online advice blurs two separate questions together. Buying a brand-new investment property is simply a choice of who the purchaser is — you personally, or your company — and because no transfer takes place, there’s normally no Capital Gains Tax issue, no Stamp Duty Land Tax on a transfer, and no refinancing of an existing mortgage to arrange. Moving a property you already own into a company is a different matter entirely: HMRC treats it as though you’d sold the property to an unconnected buyer at market value, which can crystallise a Capital Gains Tax bill on any increase in value, and the company is treated as buying the property — so Stamp Duty Land Tax, often at the higher residential rates, generally applies even though no money has actually changed hands between you and it. Existing mortgages usually can’t simply be transferred either, so the company will typically need to arrange its own borrowing, with the valuation, legal and arrangement costs that come with it.
Most landlords also won’t qualify for Incorporation Relief just because they let property — whether the letting activity counts as a qualifying business depends on the nature and extent of the work involved, and it’s a complex, fact-specific area where specialist advice matters before assuming any relief applies.
Things that catch people out
- Assuming a company always saves tax, without checking the actual numbers for your situation
- Moving existing properties into a company without first working out the Capital Gains Tax cost
- Forgetting Stamp Duty Land Tax applies to the transfer even though no cash changes hands
- Focusing only on this year’s tax bill instead of the long-term plan for the portfolio
- Deciding on structure before speaking to a mortgage adviser about what’s actually available
For many landlords, the answer isn’t personal ownership or a company — it’s keeping existing properties where they are and buying future ones through an SPV, which avoids an immediate Capital Gains Tax and Stamp Duty Land Tax hit while still allowing the portfolio to grow inside a company structure. If you’d like help working out which structure fits your situation, get in touch — or take a look at how we support landlords & property.
John is the founder of Summed Up Accountancy Services. He qualified as a Chartered Certified Accountant (ACCA) in 2006, worked in practice and then in industry as a Head of Finance, and set up Summed Up in 2019 to give growing businesses and directors straightforward, jargon-free advice.