Landlord | Incorporation
Should I Incorporate My Buy-to-Let Portfolio in 2026?
Once Section 24 started biting, "should I put my buy-to-lets in a limited company?" became the most common question landlords ask. The honest answer is: sometimes, and far less often than property forums suggest. Incorporation can save a heavily-mortgaged higher-rate landlord real money, but the costs of getting property into a company are large and immediate, while the savings are gradual. The decision is arithmetic, not ideology.
Why a company can help
A company deducts mortgage interest in full before paying Corporation Tax, so the Section 24 restriction simply does not apply. Corporation Tax rates are also lower than higher-rate income tax, and profits left inside the company can be reinvested before any personal tax is triggered. For a landlord buying and growing a portfolio with leverage, that combination is powerful.
The costs people underestimate
- Capital Gains Tax on transfer. Moving a let you already own into a company is a disposal at market value. If it has gained in value, CGT is due, even though no cash changes hands.
- Stamp Duty Land Tax. The company "buys" the property, so SDLT applies, including the additional-dwelling surcharge. On a valuable property this alone can run to tens of thousands.
- Mortgage repricing. Company buy-to-let mortgages usually carry higher rates and fees than personal ones, eroding part of the interest advantage.
- Extraction tax. Money is not yours until it leaves the company. Dividends and salaries are taxed again personally, so the headline Corporation Tax saving is not the full picture.
When it tends to make sense
- New purchases. Buying fresh in a company avoids the CGT and SDLT cost of transferring something you already own. This is the cleanest case by far.
- Higher-rate landlords with real leverage. The more mortgage interest you carry and the higher your personal rate, the more Section 24 costs you, and the more a company helps.
- Long horizons and reinvestment. If you intend to retain and recycle profits into more property rather than draw them out, the company structure compounds well.
- Succession planning. Shares can be easier to pass down gradually than property itself, which can improve the inheritance position.
When it usually does not
A basic-rate landlord, a lightly-mortgaged or unmortgaged portfolio, or someone who needs the rental income to live on, generally gains little and pays a lot to incorporate. The transfer taxes can wipe out a decade of savings before they start.
The three-year breakeven
A higher-rate landlord with four mortgaged flats faced around £40,000 of combined CGT and SDLT to incorporate. Against that, full interest deductibility plus Corporation Tax rates saved roughly £14,000 a year. Breakeven landed just under three years, and with a fifteen-year horizon and plans to keep buying, incorporation was the right call. For a landlord planning to sell within five years, the same numbers said stay personal.
Local service: landlord accountant. Related: how Section 24 works and company versus personal name.
Frequently Asked Questions
Will I pay tax just to move my own property into my company?
Usually yes. Transferring a let you own to a company is a disposal at market value, so CGT can arise on the gain, and the company pays SDLT to acquire it. No cash moves, but the tax is real.
Is there any relief from CGT on incorporation?
Incorporation relief can defer the gain where you transfer a genuine property business as a going concern, but it has strict conditions and is not automatic for passive landlords. It needs checking against your specific activity.
Are company mortgage rates really worse?
Generally company buy-to-let mortgages price higher and carry bigger fees than personal ones. The gap has narrowed but still eats into the interest-deductibility advantage, so it belongs in the calculation.
How is money taken out of a property company taxed?
Profits are taxed at Corporation Tax inside the company, then dividends or salary you draw are taxed again personally. The structure suits retaining and reinvesting profit more than drawing it to live on.
Does incorporation help with inheritance tax?
It can, because shares are easier to gift gradually than property and certain planning becomes available, but property companies do not automatically get business reliefs. It is a planning conversation, not a guarantee.
Should I move my whole portfolio or just buy new in a company?
Buying new in a company is the cleanest route because it avoids transfer taxes. Moving an existing portfolio only pays off with strong leverage, higher-rate exposure and a long horizon.
What is a rough breakeven period?
It depends entirely on your numbers, but where incorporation makes sense at all the upfront transfer taxes are often recovered in three to five years. Beyond that you save; before it you are still paying it off.
Can you just tell me whether to do it?
We model your real figures, the transfer costs against the projected annual saving, and give you a breakeven and a recommendation. It is the only way to answer it honestly, because the right call genuinely differs landlord to landlord.
Wondering whether to incorporate?
Free 15-minute call: we model the transfer costs against the annual saving and give you a breakeven and a straight recommendation.
Or email info@yourtaxhelp.co.uk
General guidance only. Not personal tax advice. Contact us for advice specific to your situation. Figures relate to the 2025/26 tax year unless otherwise stated.