Moving your rental property into a limited company in 2025/26: the complete guide for UK landlords

If you’re a UK landlord, you’ve probably heard some version of this advice:

“Just put the properties into a Ltd company, you’ll pay less tax.”

In 2025/26 that advice is dangerous if you don’t understand what really happens when you “move” a buy-to-let from your own name into a company:

  • For tax, it’s treated as if you’ve sold the property at full market value to your own company.
  • That can trigger Capital Gains Tax (CGT) and Stamp Duty Land Tax (SDLT) on the same day.
  • On top of that, there are mortgage, legal and structure issues that can make or break the move.

This guide answers the questions landlords actually type into Google and ask on calls, with numbers, not just theory:

  1. Should I put my rental properties into a limited company in 2025/26?
  2. Will I pay CGT and SDLT if I move my buy-to-let into a Ltd company?
  3. How does incorporation relief work for landlords – and who actually qualifies?
  4. Is it too late to set up a partnership and save SDLT?
  5. What are the non-tax traps when I transfer properties into my company?
  6. What does “do nothing vs incorporate” look like over 10–15 years?

Along the way, I’ll reference:

1. Should I put my rental properties into a limited company in 2025/26?

The big picture

Landlords normally look at a company for three reasons:

  • You’re paying higher-rate Income Tax on rental profits, hit by the restriction on finance cost relief (Section 24), so mortgage interest only gets a 20% tax credit rather than full deduction.GOV.UK
  • You’ve built a proper rental operation (multiple properties, systems, time spent) rather than a single accidental rental.
  • You want to grow, refinance and plan for succession (family, trusts, eventual exit).

At the same time, you’re dealing with:

So the “company vs personal name” question is completely valid.

When a Ltd company tends to make sense

A company is often worth modelling if:

  • You’re a higher- or additional-rate taxpayer with meaningful mortgage debt.
  • You plan to hold and grow the portfolio long-term (10+ years).
  • You don’t need to extract every pound of profit immediately, you’re happy to build value in the company or repay a director’s loan first.
  • You want clearer separation between your personal finances and the property business, often using a property SPV or group (see “Setting Up a Ltd Company for Properties: Holding Company, Group Structure & SPV Explained”).

When staying in your own name may be better (for now)

Keeping properties personally might be better if:

  • You only have one small rental and very little mortgage.
  • You’re basic rate now and expect income to fall (e.g. approaching retirement).
  • You might sell up or move in within the next few years (no point triggering CGT/SDLT if your horizon is short).
  • You would struggle with the up-front tax bill of incorporation (CGT, SDLT and fees).

In other words: incorporation is a strategic move, not a quick tax trick. The rest of this guide shows what actually happens when you do it.

2. Will I pay CGT and SDLT if I move my buy-to-let into a Ltd company?

Short answer: usually yes, unless specific reliefs apply.

2.1 Capital Gains Tax (CGT) – the “deemed sale” to your company

For CGT, HMRC treats a transfer to your own company as if you’d sold the property at full market value to a connected company.GOV.UK

The gain is:

Market value at transfer
minus original purchase price
minus purchase/disposal costs and allowable improvement costs

Key rules for 2025/26:

  • CGT annual exempt amount: £3,000 per individual from 2024/25 onwards.GOV.UK
  • Residential property CGT rates: for individuals, 18% (basic rate band) and 24% (above that), from 6 April 2024.GOV.UK
  • You must report and pay CGT on UK residential property within 60 days of completion.GOV.UK

Worked example 1 one buy-to-let, no CGT relief

  • Current market value: £300,000
  • Original purchase price: £180,000
  • Allowable costs/improvements: £10,000

Gain before allowance = £300,000 − £180,000 − £10,000 = £110,000
Less annual CGT allowance £3,000 → £107,000 taxable gain GOV.UK

Assume you’re a higher-rate taxpayer, so 24% CGT on residential gains above the basic rate band. GOV.UK

  • CGT bill ≈ 24% × £107,000 = £25,680

And remember: you must file and pay within 60 days, or HMRC can charge interest and penalties, they’ve significantly ramped up enforcement in this area. GOV.UK

2.2 SDLT – your company “buys” the property at market value

For SDLT, the company is treated as the purchaser.

Because the company is connected to you, Section 53 Finance Act 2003 says SDLT is charged on market value even if no money actually changes hands.GOV.UK

From 31 October 2024 onwards:

  • Additional dwellings attract a 5% surcharge above the standard residential SDLT rates.GOV.UK
  • From 1 April 2025, the higher-rate (additional property) bands are broadly:
    • 5% on the first £125,000
    • 7% on £125,001–£250,000
    • 10% on £250,001–£925,000
    • 15% on £925,001–£1.5m
    • 17% above £1.5m

Worked example 1 continued – SDLT on the same £300,000 property

Using the post-1 April 2025 higher-rate bands:

  • 5% on first £125,000 → £6,250
  • 7% on next £125,000 (to £250,000) → £8,750
  • 10% on remaining £50,000 (to £300,000) → £5,000

Total SDLT at higher rates ≈ £20,000

So just to “move” this one buy-to-let into a company, you’re looking at:

  • CGT: ~£25,680
  • SDLT: ~£20,000

Total headline tax cost: ~£45,680, before legal fees, valuation, mortgage fees and professional costs.

That’s why incorporation should never be done on a whim.

3. How does incorporation relief work for landlords and who actually qualifies?

Now for the good news: many serious landlords don’t actually pay the CGT upfront, because they qualify for Incorporation Relief.

3.1 What incorporation relief does

Section 162 Taxation of Chargeable Gains Act 1992 (“s162”) allows you to roll the gain into the value of the shares you receive when you transfer a business to a company as a going concern.

If the conditions are met:

  • You transfer the whole business, including all its assets (other than cash), to a company.
  • In return, you receive shares in the company (not mainly cash).

Then:

  • The CGT gain is not taxed now.
  • Instead, your base cost in the shares is reduced by the deferred gain.
  • CGT only crystallises if/when you sell those shares or wind the company up.GOV.UK

Importantly, the company’s base cost for the properties is their market value at incorporation, which matters for future disposals.

3.2 When a rental portfolio counts as a “business”

The tricky bit is the word “business”.

The landmark case Elisabeth Moyne Ramsay v HMRC confirmed that a rental portfolio can be a business for s162 relief, if there’s enough activity.

HMRC’s Capital Gains Manual then gives a practical rule of thumb:

“You should accept that incorporation relief will be available where an individual spends 20 hours or more a week personally undertaking the sort of activities that are indicative of a business.” GOV.UK

That doesn’t mean you must hit 20 hours, but:

  • 1–2 fully-managed buy-to-lets with minimal involvement will usually not qualify.
  • A hands-on landlord managing multiple properties, doing viewings, repairs, tenant handling, advertising, inspections and bookkeeping can often argue they run a business, not just a passive investment.

3.3 Worked example 2 – 3-property portfolio with incorporation relief

Assume:

  • 3 properties, each now worth £250,000 → total £750,000
  • Combined original cost + improvements: £480,000

Total gain = £750,000 − £480,000 = £270,000
Less annual CGT allowance (£3,000) = £267,000 taxable gain (ignoring band splits).GOV.UK

If you didn’t get incorporation relief and are largely in the higher-rate band, CGT at 24% would be ≈ £64,080.GOV.UK

With incorporation relief:

  • CGT due now: £0
  • The £270,000 gain is rolled into the share base cost.
  • The company’s base cost for the properties is £750,000 (their market value).GOV.UK

You still have SDLT (see next section), but you’ve avoided writing a £60k+ cheque to HMRC today.

This is where serious landlords can get a huge win, but only if the business test and structuring are tight enough to stand up to HMRC enquiry.

4. Is it too late to set up a partnership and save SDLT?

You’ve probably heard that you can:

“Create a partnership, then incorporate it and pay little or no SDLT.”

There are genuine cases where a long-standing property partnership can incorporate with very little SDLT, thanks to the partnership provisions in Schedule 15 FA 2003. GOV.UK

Broadly:

  • SDLT is based on how much of the underlying economic interest actually changes hands.
  • If a husband-and-wife partnership transfers the business to a company they own in the same proportions, the formula can produce very low – even nil – SDLT in some cases.

However, there are two big catches:

  1. The partnership must be real and long-standing
    • You’d normally expect a proper partnership agreement, joint business bank account, profit-sharing, and potentially a partnership tax return.
    • Simply putting both names on the Land Registry doesn’t automatically create an SDLT partnership.GOV.UK
  2. HMRC is heavily targeting “overnight partnership then incorporation” schemes
    • Anti-avoidance rules (including paragraph 17A of Sch 15 and s75A FA 2003) let HMRC ignore contrived steps designed purely to dodge SDLT.GOV.UK
    • HMRC’s Spotlight 69 specifically warns against marketed property business incorporation schemes using partnerships/LLPs, with a clear intention to pursue tax, interest and penalties.

Worked comparison – SDLT with vs without partnership

Take the £750,000 portfolio from example 2:

  • If you incorporate directly, your company pays higher-rate SDLT of roughly £65,000 (using the 5%/7%/10%/15%/17% bands from April 2025).

If that portfolio had been run for years as a genuine partnership, and you structure the company so each partner keeps the same economic interest, the Schedule 15 formula can massively reduce, sometimes eliminate, the SDLT bill.

But this only works if the partnership and incorporation are commercial, documented and defensible. Anything that looks like a last-minute paper exercise to avoid the 5% surcharge is asking for trouble.

5. What are the non-tax traps when I transfer properties into my company?

Even if the tax case stacks up on paper, plenty of incorporations fall over on the practicalities.

5.1 Mortgages and lender consent

You generally cannot just “move” a mortgaged property into a company:

  • Most lenders require a refinance onto a limited company buy-to-let product.
  • That means:
    • Possible early repayment charges on current mortgages.
    • New valuation and arrangement fees.
    • Legal fees and broker costs.
  • Lenders usually also want personal guarantees from the directors/shareholders of the property company.

If refinancing is on your mind, it’s worth reading this alongside your funding strategy, our “Lender Readiness Checklist” and “Setting Up a Ltd Company for Properties: Holding Company, Group Structure & SPV Explained” work well together here.

5.2 Tenancies, deposits and registrations

When the company becomes the legal owner:

  • Your ASTs may need to be re-issued in the company’s name.
  • Deposit protection details must match the new landlord.
  • If you’re in a licensing scheme (selective, additional, HMO), you may need to update or reapply as the company.

These aren’t optional admin jobs, they go to the heart of your legal landlord status.

5.3 SPV vs trading company (and groups)

Dropping properties into your existing trading company (consultancy, agency, etc.) is almost always a bad idea:

  • It mixes trading risk and property risk.
  • It complicates any future sale of the trade (buyers hate embedded property).
  • It muddies the waters for Business Asset Disposal Relief and other planning.

Instead, most landlords use a dedicated property SPV, sometimes under a holding company if there’s a wider group. That’s exactly what we cover in “Setting Up a Ltd Company for Properties: Holding Company, Group Structure & SPV Explained” and “Should You Hold Property in an SPV or Your Own Name? (UK, 2025/26)”.

5.4 Director’s loan account and getting money back out

When you incorporate, the company normally:

  • Takes on the mortgage liabilities, and
  • Records the equity as a credit to your director’s loan account (DLA).

That DLA can then be repaid tax-free over time from company profits, extremely useful if you’ve built up significant equity.

Pitfalls:

  • If the bookkeeping is wrong and your DLA ends up overdrawn, the company can face a s455 charge (currently 33.75% of the overdrawn balance) and benefit-in-kind issues on you as director.GOV.UK
  • If you rush the transaction without clear valuations and documentation, it’s much harder to defend the numbers if HMRC ever asks questions.

5.5 ATED and other edge cases

If your company holds high-value residential property that isn’t let commercially, you may be caught by Annual Tax on Enveloped Dwellings (ATED) and extra reporting, another reason to plan carefully rather than blanket-incorporating everything.

6. “Do nothing” vs incorporate – a 10–15 year worked example

Let’s put all this into a simple cashflow comparison for one higher-rate landlord.

Assumptions

  • One rental property: £300,000
  • Annual rent: £18,000
  • Non-finance costs (repairs, insurance, etc.): £3,000
  • Mortgage interest: £9,000
  • You’re a higher-rate taxpayer (40% band).
  • Post-1 April 2025 SDLT and current CGT rules.

Scenario A – keep property in your own name

Taxable rental profit (because of finance cost restriction):

  • Rental income: £18,000
  • Less allowable expenses (no interest): £3,000
  • Taxable profit: £15,000

Income Tax at 40% on £15,000 = £6,000
Less basic-rate tax credit (20% of £9,000 interest) = £1,800 GOV.UK

  • Net tax: £6,000 − £1,800 = £4,200

Cash position:

  • Cash profit after interest = £18,000 − £3,000 − £9,000 = £6,000
  • Less tax £4,200 → £1,800 net cash per year after tax.

Scenario B – property in a small-profits company, profits used to repay director’s loan

Company profit:

  • Rental income: £18,000
  • Less expenses: £3,000
  • Less mortgage interest: £9,000
  • Company profit: £6,000

Corporation Tax at 19% small profits rate (profits under £50,000). GOV.UK

  • CT: 19% × £6,000 = £1,140
  • Post-tax profit in company: £4,860

Assume all £4,860 goes to repay your director’s loan each year (tax-free extraction):

  • Net cash to you: £4,860 per year.

Comparing the two

  • Personal ownership: £1,800/year net cash
  • Company + director’s loan: £4,860/year net cash

Difference: £3,060 per year in favour of the company.

Now bring in the up-front tax from example 1:

  • CGT ≈ £25,680
  • SDLT ≈ £20,000
  • Total ≈ £45,680

At an extra £3,060 per year, it takes roughly 15 years to claw back that initial £45,680 purely via tax-efficient cashflow and that’s assuming stable interest rates, rents and tax rules.

That’s why, in real life, we:

  • Model 5–10+ years,
  • Factor in capital growth, refinancing, future sales and succession, and
  • Consider how much profit you actually need to draw personally vs keep in the company.

It’s not always a slam-dunk either way, but you need these numbers before you move a single property.

7. How we typically help landlords through this decision

This is exactly the kind of work we do day-to-day with landlords who’ve outgrown the “accidental landlord” stage.

A typical process looks like this:

  1. Discovery & modelling (5–10 year view)
  2. Structure & eligibility checks
  3. Co-ordinating the team
    • Work with your broker on company mortgage terms and any early repayment charges.
    • Work with your solicitor on the transfer, Land Registry update, tenancies and deposit protection.
    • Make sure the company accounts and director’s loan are set up properly from day one.
  4. Implementation & ongoing support
    • Handle the CGT calculations and 60-day reports (where needed).GOV.UK
    • Ensure SDLT returns reflect the correct higher rates and any reliefs.GOV.UK
    • Provide ongoing support so your new property company structure works with your wider tax and wealth plan, not against it.

Call to action

If you’re thinking about moving one or more properties into a limited company and want a plain-English, numbers-first view of whether it actually pays off for you:

Book a 20-minute property incorporation planning call.

We’ll walk through your portfolio, sketch both scenarios, and tell you honestly whether the move is worth pursuing or whether you’re better off staying put for now.

FAQ – moving property from your own name into a Ltd company (UK landlords)

1. Can I just gift my rental property to my company to avoid CGT and SDLT?

No. Because your company is connected to you, CGT and SDLT both work on market value even if no money changes hands.GOV.UK

The only way to avoid an immediate CGT charge is to qualify for incorporation relief and SDLT still usually applies unless specific partnership rules apply and are met.

2. Does incorporation relief mean I never pay CGT?

No. Incorporation relief defers CGT by rolling the gain into the base cost of your shares.

You’ll usually pay CGT later if you:

  • Sell the shares, or
  • Wind up the company and extract assets.

It buys you time and can allow you to plan disposals more tax-efficiently, but it doesn’t erase the gain.

3. Is it worth setting up a partnership now just to save SDLT?

In most cases, no, at least not purely for SDLT reasons.

HMRC’s partnership rules can reduce SDLT for genuine, long-standing partnerships, but anti-avoidance provisions allow them to ignore contrived “overnight partnerships” set up solely to dodge SDLT.

Any partnership planning has to make sense commercially, not just for tax.

4. Do the new 5% SDLT higher rates apply when a company buys from me?

Yes. From 31 October 2024, higher rates for additional dwellings are 5 percentage points above the standard residential SDLT rates and they apply to most company purchases of residential property, regardless of whether it’s your first property in the company.

That’s why company acquisitions (including incorporations) now carry a much heavier SDLT cost than a few years ago.

5. Can I move my own home into a company to save tax?

Generally no, and it’s usually a very bad idea.

You’d typically:

  • Lose Principal Private Residence Relief (no CGT exemption for the company),
  • Face SDLT on the transfer, and
  • Create complications for mortgage and future sale.

Companies are usually used for rental / investment properties, not main homes.

6. Is HMRC really looking at landlord incorporations?

Yes. HMRC has:

  • Increased penalties and investigations around CGT on property and 60-day reporting.
  • Published Spotlight 69 targeting marketed property business incorporation schemes using partnerships/LLPs.

That doesn’t mean genuine incorporations are off the table, but it does mean your case needs to be well-evidenced, commercial and properly documented.