Personal vs limited company ownership
How holding property personally compares to a limited company, and why Section 24 has shifted the calculus for higher-rate taxpayers.
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Personal name or limited company?
The honest answer: it depends on your tax band, your leverage, and what the portfolio is for. A company deducts mortgage interest in full and pays Corporation Tax at rates below higher-rate Income Tax — but taking the money out personally costs a second layer of tax, mortgage rates run higher, and compliance costs are real.
For a basic-rate taxpayer with modest borrowing, personal ownership usually stays simpler and cheaper. For a higher-rate taxpayer building a leveraged portfolio for the long term, the company case gets strong. The mistake is copying someone else's answer to a different question.
Why Section 24 drives the conversation
Companies escape Section 24 entirely: mortgage interest is a normal deductible expense inside a company, where an individual gets only a basic-rate credit. The more leveraged the portfolio and the higher your personal tax band, the bigger that difference becomes.
That is the pull. The push-backs are extraction (dividends and salary are taxed when you take them), financing (fewer lenders, higher rates for company buy-to-lets), and friction (accounts, CT600, confirmation statement — a company is a compliance commitment, not just a tax rate).
What an SPV actually is
A special purpose vehicle is simply a limited company whose only activity is holding property, usually registered under the property SIC codes lenders look for. Lenders prefer SPVs to trading companies because the risk is clean — nothing about the label changes the tax.
Most new company landlords incorporate an SPV, buy through it from day one, and leave existing personal properties where they are.
Moving existing properties: the expensive road
Transferring a personally held property into your own company is a sale at market value: Capital Gains Tax on the gain and Stamp Duty for the company on the purchase, plus lender consent. For established portfolios with large built-in gains, the cost of moving often exceeds the Section 24 saving for years.
Incorporation relief can defer the CGT where the letting genuinely operates as a business — a facts-based test, not a form to tick. This is precisely the decision to price properly before acting: we model both structures with your actual numbers as part of advisory work, not opinion.
Frequently asked questions
Should I put my rental properties in a limited company?
Only if the numbers say so for your case. The company wins on interest relief and retained profits; personal wins on simplicity, financing, and extraction. It turns on your tax band, gearing, and time horizon — model it before moving anything, because unwinding is expensive.
Can I transfer my existing buy-to-let into my company?
Yes, but it is treated as a market-value sale: CGT for you, Stamp Duty for the company, and the mortgage rewritten. Incorporation relief can defer the CGT where the portfolio genuinely runs as a business. Cost it fully first — this move rarely pays for one or two properties.
What does buying through an SPV cost in practice?
Company formation is cheap; the running costs are not nothing — annual accounts, a CT600, a confirmation statement, and typically higher mortgage rates than a personal buy-to-let. Budget for real compliance costs per year and price that into the comparison.
Does a company protect me if a tenant sues?
Limited liability helps ring-fence the property business from your personal assets, but lenders routinely require personal guarantees on SPV mortgages, which hands much of that protection back. Insurance, not structure, remains the first line of defence.