The shift toward limited company property investment is one of the most significant structural changes in UK landlord behaviour since the 2016 stamp duty surcharge. Section 24 — the restriction of mortgage interest relief to the basic rate for personal-name landlords — has made higher-rate taxpayer landlords materially worse off holding property in their own name. For new acquisitions, a limited company SPV is now the default structure for most investors expanding beyond a small portfolio. But the company structure is not automatically right for everyone — the decision depends on your tax position, whether you want income now or later, and whether you are buying new or transferring existing properties.
Section 24 — why this changed everything
Rental income £14,400/yr. Mortgage interest £8,400/yr. Same property, same finances — completely different tax treatment depending on ownership structure.
The same property generating £14,400/year in rent with £8,400/year in mortgage interest leaves a higher-rate taxpayer with £1,920 in personal name versus £4,860 in a company — a difference of £2,940/year, before considering the long-term compounding of retained profits. For a portfolio of five such properties, that gap is nearly £15,000/year.
Personal vs company tax rates — 2026
Tax comparison calculator — personal vs limited company
Personal vs limited company tax comparison
See the annual after-tax income difference for your rental portfolio in each structure.
Setting up a property SPV — how it works
Register a private limited company at Companies House (companieshouse.gov.uk). Costs £50 online. Use SIC code 68209 (Other letting and operating of own or leased real estate) for a general BTL portfolio, or 68100 (Buying and selling of own real estate) if flipping is part of the strategy. The company name should be neutral — not advertising rental activity publicly.
Most property SPVs have one or two directors (typically a couple). Share structure should reflect how you want income and eventual capital gains to be distributed. A specialist accountant can advise on whether an alphabet share structure (different classes for income vs capital distribution) is appropriate. Issue shares at £1 nominal value initially.
A dedicated business bank account is required — rental income and mortgage payments must flow through the company account, not personal accounts. Accounts are available from Starling Business, Tide, Monzo Business, or mainstream banks. Some BTL lenders require a specific bank account as a condition of the mortgage.
BTL mortgages for limited companies are available from around 40 lenders in 2026 — fewer than for personal-name BTL, but a growing market. Rates are typically 0.2–0.5% higher than personal-name equivalent products. A whole-of-market BTL broker is essential — not all brokers have access to the full company BTL market.
Limited companies must file annual accounts at Companies House and a corporation tax return with HMRC. A property-specialist accountant typically charges £750–£1,500/year for a small SPV. This is a real cost to model — it reduces (but rarely eliminates) the tax advantage for smaller portfolios.
Advantages and disadvantages — honestly
Selling a property you own personally into your own limited company is treated as a market-value sale for both SDLT and CGT purposes. On a property worth £250,000 with a £100,000 gain, you would pay CGT on £100,000 (at 24% = £24,000) and SDLT on £250,000 at the investment property rate (approximately £12,500 including the 5% surcharge). Total transfer cost: approximately £36,500 — before legal and professional fees. This cost is prohibitive in most cases.
The practical approach: leave existing properties in personal name and use a limited company for all new acquisitions going forward. Run both structures in parallel — a hybrid portfolio approach that is now common among mid-sized landlords.
Frequently asked questions
Is a limited company right for a basic rate taxpayer landlord?
Probably not — at least not primarily for the Section 24 tax reason. A basic rate taxpayer receives the same 20% mortgage interest credit in personal name as they would receive in an equivalent after-tax position from a company deducting the full interest. The advantage of the company structure for a basic rate taxpayer is primarily: income deferral (retain profits in the company and delay the dividend tax until a lower-income year), succession planning, and portfolio building reinvestment. These are real but less immediately impactful than for higher-rate taxpayers. The accounting costs and higher mortgage rates can outweigh the marginal benefit for a single-property basic rate taxpayer. Run the calculator above with your specific numbers and discuss with a property accountant before deciding.
Can I use a limited company for an HMO?
Yes — and many HMO investors do. The higher rental yields from HMOs amplify the Section 24 impact (more rent, more mortgage interest, bigger personal-name tax hit) making the company structure more compelling. HMO BTL mortgages in company names are available from specialist lenders, though the product range is smaller than for standard BTL. The HMO licence must typically be held by the company director personally or by the company itself — check with the local authority whether they licence the company or the individual.
What happens to the company's properties when I die?
The company continues — shares pass according to your will or intestacy rules. This is one of the inheritance planning advantages of the structure. Shares in a property investment SPV can potentially qualify for Business Property Relief (BPR) from Inheritance Tax — but HMRC scrutinises property investment companies carefully and BPR eligibility is not guaranteed for passive rental portfolios. Specialist estate planning advice is essential before relying on BPR for IHT purposes. A well-structured share arrangement can also facilitate lifetime gifting of shares to children while retaining voting control.
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