Moving Your Buy-to-Let from Personal to Limited Company Ownership
Is it worth transferring your rental property into a limited company? Here’s what every landlord should know before they do it.
Many landlords are now considering transferring their buy-to-let portfolios from personal ownership into a limited company. It can unlock tax advantages, but it’s not always straightforward. Here’s what to weigh before you make the move.
💡 Why Landlords Are Making the Switch
Since Section 24 of the Finance Act 2015 began restricting mortgage interest relief, landlords have been feeling the tax squeeze.
In 2025, more investors than ever are exploring Special Purpose Vehicles (SPVs) — limited companies set up purely to hold property investments.
It’s not just about saving tax.
Owning through a company structure can simplify long-term growth, succession planning, and portfolio finance, but it also comes with costs and complexity.
Let’s break it down.
1. The Potential Tax Advantages
Full Mortgage Interest Deductibility
In a limited company, you can still deduct all mortgage interest as a business expense before calculating profit.
That means your company pays Corporation Tax (currently 25% for most landlords), not income tax on the full rental income — a major difference for higher-rate taxpayers.
Example:
£20,000 in rental profit with £10,000 in mortgage interest.Personal name: You might pay 40% income tax on £20,000 = £8,000.
SPV company: You pay 25% Corporation Tax on £10,000 = £2,500.
That’s a £5,500 tax saving on the same property.
Flexible Profit Extraction
Company structures let you choose how and when to take profit - through dividends, director’s loans, or retained earnings.
This flexibility allows landlords to control when they pay personal tax and reinvest profits efficiently.
Estate & Inheritance Planning
Holding properties in a company can make succession planning cleaner.
Shares in the company can be transferred gradually, or trusts can hold them, which is often simpler than transferring physical property titles.
Learn more about protecting assets on our Protection Hub →
⚠️ 2. The Drawbacks & Hidden Costs
Capital Gains Tax (CGT) on Transfer
When you sell or “transfer” a property from your personal name to your company, HMRC treats it as if you sold it to someone else - even if you own both.
That triggers Capital Gains Tax on the property’s increase in value since you bought it.
CGT rates for residential property are 18% (basic rate) or 28% (higher rate) after allowances.
Stamp Duty Land Tax (SDLT)
Your company must pay SDLT on the full market value, not just the remaining mortgage.
This includes the 3% additional property surcharge — since companies are always considered additional property owners.
| Property Value | SDLT Rate (Company Purchase) | SDLT Due |
|---|---|---|
| £150,000 | 3% | £4,500 |
| £250,000 | 5% | £12,500 |
| £500,000 | 8% | £40,000 |
📘 Note: Mixed-use or semi-commercial properties are taxed differently — see our guide on Stamp Duty Loopholes →
Mortgage Refinance Required
You can’t simply “assign” your personal buy-to-let mortgage to a company.
You’ll need to repay your existing mortgage and set up a new SPV mortgage with a limited company lender.
This can mean:
Paying early repayment charges (if still in a fixed period).
Legal and valuation fees.
A new company credit profile (lenders assess both you and the SPV directors).
See our Buy-to-Let Hub → for specialist SPV mortgage options.
3. Situations Where It Can Work Well
✅ Growing portfolio landlords (3+ properties) who plan to reinvest profits.
✅ Higher-rate taxpayers whose rental income is being eroded by Section 24.
✅ Long-term investors focused on succession, not short-term cashflow.
✅ Partnerships that can evidence business-level activity (may qualify for Incorporation Relief).
💬 4. When to Think Twice
🚫 Small-scale landlords with only one or two properties may find the costs outweigh the benefits.
🚫 High capital gain properties could trigger large CGT bills.
🚫 Mortgages in fixed-rate periods could face hefty redemption penalties.
Next Steps – Getting the Structure Right
If you’re considering the switch:
Speak to a tax adviser or accountant about CGT and SDLT exposure.
Check your current mortgage terms for exit fees.
Speak with one of our mortgage broker who understands SPV lending.
Set up your limited company with clear SIC codes (e.g. 68209 – “Letting and operating of own or leased real estate”).
Then we’ll source the right SPV mortgage to refinance the property under the new structure.
Ready to Explore It or have any question?
We’ll show you exactly how transferring your properties into an SPV could impact your tax position, borrowing capacity, and long-term returns.
Manchester Independent Mortgages Ltd is authorised and regulated by the Financial Conduct Authority (FCA 431647).
The information above is for guidance only and does not constitute personal advice.
Tax treatment depends on individual circumstances and may change in future.
Your home may be repossessed if you do not keep up repayments on your mortgage.