Figures: 2026/27 tax year. Reviewed by Noman Abbasi, ACCA. This is a genuinely complex decision, please treat the result as a starting point, not advice.
Since Section 24 restricted mortgage-interest relief for individual landlords, many have asked whether to move their buy-to-let portfolio into a limited company. A company still deducts mortgage interest in full, which can cut the annual tax bill. But transferring property into a company is not free, it can trigger Capital Gains Tax and Stamp Duty. This calculator shows both sides honestly: the annual tax each way, and the one-off entry costs most free tools leave out.
Personally vs through a company: the annual picture
Held personally, your rental profit is taxed at your marginal rate and mortgage interest only gets the 20% Section 24 tax reduction, painful if you are a higher-rate taxpayer. Held in a company, the company pays Corporation Tax on its profit after deducting the interest in full, and you are then taxed again when you take the money out as dividends. Whether the company wins on the annual numbers depends on your interest costs, your other income and whether you actually need to draw the profit out.
The entry costs everyone forgets
Moving property into a company is treated as a sale to the company at market value. That means:
- Capital Gains Tax on the gain since you bought, at residential rates of 18% or 24%, after the £3,000 annual exempt amount. s162 incorporation relief can defer this CGT where your portfolio is run as a genuine business and is transferred in exchange for shares. It is not automatic: for transfers on or after 6 April 2026 you must claim it in your tax return for the year of transfer (the s162A opt-out has been repealed), so it needs to be got right.
- Stamp Duty Land Tax on the transfer, including the 5% additional-property surcharge, because the company is buying a residential property.
These one-off costs can run to tens of thousands of pounds, which is exactly why incorporating is not automatically worth it. The calculator estimates them and shows how many years of annual saving it would take to earn them back.
Worked example
A higher-rate landlord with £30,000 of rent, £10,000 of mortgage interest and a £400,000 portfolio bought for £250,000 might save only a few hundred pounds a year in a company, while facing roughly £35,000 of CGT and £30,000 of SDLT to transfer in. On those numbers the payback runs to decades, so staying personal is the better call. Change the leverage, the portfolio size or the growth plans and the answer can flip the other way. That is the point: it depends on your numbers.
So should you incorporate?
There is no one-size answer. For a leveraged, higher-rate landlord with a growing portfolio, a company may be worth looking at, but only if profits stay in the company: the entry costs are certain and up-front while the saving builds up over years and shrinks as soon as you draw the profits out as dividends. For a smaller or low-geared landlord, the entry costs often outweigh the saving. Because a wrong call here can cost five figures, use this as a first look and then speak to a landlord accountant before you do anything. You can also see the cost of the current rules with our Section 24 calculator, and the transfer stamp duty with the buy-to-let SDLT calculator.
Frequently asked questions
Should I put my property portfolio into a limited company?
It depends on your numbers. A company deducts mortgage interest in full (unlike an individual under Section 24), which can lower the annual tax, especially for higher-rate, leveraged landlords. But transferring property in can trigger Capital Gains Tax and the 5% SDLT surcharge, which can cost tens of thousands. For small or low-geared portfolios the entry costs often outweigh the saving. Model both and get advice before deciding.
What are the costs of transferring property into a company?
Two main one-off costs. First, Capital Gains Tax on the gain since purchase, at 18% or 24% for residential property after the £3,000 annual exempt amount, though s162 incorporation relief can defer this for a genuine property business transferred for shares. Second, Stamp Duty Land Tax on the transfer at market value, including the 5% additional-property surcharge. There can also be mortgage redemption and refinancing costs.
What is s162 incorporation relief?
s162 incorporation relief can defer the Capital Gains Tax that would otherwise arise when you transfer a property business into a company, provided the business is a genuine business (not just passive investment) and is transferred as a going concern in exchange for shares. It defers rather than cancels the gain. Note that it is no longer automatic: for transfers on or after 6 April 2026 you must claim the relief in your tax return for the year of transfer, and the old s162A opt-out has been repealed, so missing the claim means the CGT becomes payable. Whether it applies is fact-specific, so it needs professional advice.
Does a limited company avoid Section 24?
Yes, Section 24 only applies to individuals. A company deducts mortgage interest in full before Corporation Tax. That is the main annual tax attraction of incorporating. The trade-off is the tax on extracting profits as dividends, the one-off costs of transferring in, and the extra running costs of a company.