Why the company route became popular
The turning point was Section 24. Individual landlords used to deduct mortgage interest from rental profit; now they only get a 20% tax credit, which hits higher-rate taxpayers hard — some pay tax on rent that barely covers the mortgage. A limited company deducts interest in full against its profits, paying Corporation Tax (19–25%) on what’s left. For a geared portfolio owned by a higher-rate taxpayer, that difference is the whole argument.
What an SPV is (and why lenders like it)
A Special Purpose Vehicle is a company set up purely to hold property, with property-specific SIC codes. Buy-to-let lenders often prefer or require an SPV over a general trading company because it’s cleaner to underwrite. Getting the SIC codes, share structure and registrations right at formation avoids remortgage headaches later.
The trade-offs to weigh
- Two layers of tax — Corporation Tax on profit, then tax again when you take money out
- No CGT annual exemption — companies don’t get the personal allowance on gains
- Higher SPV mortgage rates and fewer products than personal buy-to-let
- Stamp Duty surcharge on company purchases, plus possible ATED on high-value homes
- Moving existing property in usually triggers SDLT and CGT — rarely done lightly
- Extra admin — company accounts, CT600 and confirmation statement each year
What a property company files
The full company set: annual accounts and a confirmation statement at Companies House, and a CT600 Corporation Tax return with HMRC. Note that property companies are outside Making Tax Digital for Income Tax (that’s for individual landlords) — but MTD may apply to any property you still hold personally.
Should you incorporate your property?
It’s a genuine calculation, not a default — driven by your income, borrowing, number of properties and plans for the future. We model company vs personal ownership for real landlords and handle the accounts either way. Call 0114 327 1480.