How to Set Up a Property Investment Company: Step-by-Step UK SPV Guide

More and more UK landlords are choosing to set up a property investment company to hold their rental portfolios. With the Section 24 mortgage interest restriction now fully in force for individual landlords, and separate, higher rates of income tax on personal property income arriving in 2027, a company can be a more tax-efficient home for a growing portfolio that is being reinvested rather than drawn down.

This guide walks through exactly how to set up a property investment company in the UK from scratch: choosing the right structure, picking the SIC codes that buy-to-let lenders look for, deciding your share structure, registering with Companies House, dealing with the current Corporation Tax process, and what to consider if you already own properties personally. It is written for someone forming a brand-new company, often called a special purpose vehicle (SPV), rather than for someone transferring an existing portfolio, which is a separate decision we link out to.

Should you set up a property investment company at all?

Before any paperwork, work out whether incorporation is right for your situation, because a company is not automatically better. The case for setting up a property investment company is strongest when:

• You are a higher-rate or additional-rate taxpayer and the Section 24 restriction is costing you relief. Individual landlords no longer deduct mortgage interest from rental profit; they receive only a 20 percent basic-rate tax reducer instead. A company deducts mortgage interest in full as a business expense, so geared portfolios are hit harder personally than inside a company. Our Section 24 complete guide explains the restriction in detail.
• You are reinvesting profits rather than living off them. A company pays Corporation Tax on rental profit and you only pay a second layer of personal tax when you extract money. If profits stay in the company to buy the next property, that deferral is valuable. If you need every pound of rent as income, the double layer can wipe out the benefit.
• You are building for the long term or for the next generation. Shares are far easier to gift or restructure than legal title to property, which makes succession planning more flexible.

The case is weaker for a small, low-geared, or already-mostly-paid-off portfolio, or where you are a basic-rate taxpayer who is not affected by Section 24. For a side-by-side of the personal versus company position, see our guide to whether Section 24 or incorporation saves more tax, and our complete guide to buy-to-let limited companies for the wider operating picture.

How a property company is taxed, in brief

A property company pays Corporation Tax on its rental profit. The headline figures for 2026/27 are:

• 19 percent small profits rate on profits up to GBP 50,000;
• 25 percent main rate on profits above GBP 250,000;
• 26.5 percent effective marginal rate on the slice of profit between GBP 50,000 and GBP 250,000, where marginal relief tapers the two rates together.

One trap to plan for at formation: those GBP 50,000 and GBP 250,000 thresholds are divided by the number of associated companies. If you set up five SPVs, each one gets roughly GBP 10,000 of the small-profits band, not the full GBP 50,000, so the marginal rate bites much sooner. That single point often decides whether you run one company or several. When you take money out, dividends are taxed personally at 10.75 percent (basic), 35.75 percent (higher) and 39.35 percent (additional). We do not re-run the extraction maths here; see our guides to salary versus dividends in a property SPV and extracting cash from a property SPV.

The personal-versus-company gap is set to widen. From 6 April 2027, individual property income is taxed at separate, higher rates of 22 percent, 42 percent and 47 percent, enacted by Finance Act 2026, applying across England, Wales and Northern Ireland (Scotland sets its own income tax rates). The Section 24 tax reducer rises to 22 percent in step, so no new wedge opens for basic-rate landlords, but for higher and additional-rate landlords the rates on personal rental profit climb. Company profits are unaffected by these personal rates, which is part of why landlords reinvesting profit are looking again at incorporation.

Step 1: Choose your structure and decide on an SPV

Almost all property investors use a standard private company limited by shares. It gives limited liability, and the ongoing compliance is well understood. The more important decision is whether to set it up as a clean special purpose vehicle (SPV), and for buy-to-let the answer is almost always yes.

An SPV is simply a company set up to do one thing: hold and let property. It carries no unrelated trading activity. This matters because limited-company buy-to-let lenders strongly prefer, and many require, an SPV. A company whose only purpose is property is far easier for a lender to underwrite and to take security over than a general trading company with mixed activities. If you think you will ever borrow against the portfolio, set up an SPV from day one; converting a trading company into a lender-friendly SPV later is awkward and sometimes impossible. For the conceptual detail, see our SPV property investment guide.

Key decisions at this stage:

• Company name: must be unique and must not contain restricted or sensitive words. Check availability on the Companies House name-availability checker before you commit to branding or a domain.
• Directors and shareholders: you need at least one director aged 16 or over and at least one shareholder. These can be the same person. You also need to identify anyone with significant control (broadly, anyone holding more than 25 percent of the shares or voting rights).
• Registered office: this becomes public record. Many landlords use their accountant's address to keep their home address off the public register.

Choosing the right SIC codes for a property company

When you incorporate you must give at least one SIC code describing what the company does. For a property company this is not a box-ticking detail: lenders read the SIC codes to confirm the company is a genuine single-purpose property vehicle. The codes most commonly used and expected are:

SIC code	Description	Typical use for a property company
68100	Buying and selling of own real estate	Companies that may buy and sell property
68209	Other letting and operating of own or leased real estate	The core buy-to-let letting code most SPVs use
68201	Renting and operating of Housing Association real estate	Social or affordable housing letting
68320	Management of real estate on a fee or contract basis	If the company manages property for others

You can enter more than one code. For a straightforward buy-to-let SPV, 68100 and 68209 are the usual pairing. Avoid mixing in unrelated trading codes, because that is exactly what makes a lender treat the company as something other than a clean SPV.

Step 2: Decide your share structure before you incorporate

Share structure is far easier to set correctly at formation than to change afterwards. For a single owner, a small number of ordinary shares is fine. Where there is a spouse or family involved, many landlords issue separate share classes, often called alphabet shares (A ordinary, B ordinary and so on), so that dividends can later be voted in different amounts to different shareholders without having to re-paper the company.

Two points to get right at the outset:

• Match the share classes to your plan. If you want flexibility to split income between you and a spouse, build the share classes in now. Retrofitting them later means a share reorganisation.
• Mind the settlements legislation. Gifting shares to a spouse is generally protected by the spouse exception, but gifting income-only rights or shares to minor children can be caught by the settlements rules and the income taxed back on you. Take this seriously at the planning stage.

The detailed dividend-splitting mechanics and the family-planning angle are covered in our guide to alphabet shares for dividend splitting. If you are weighing a single company against a group or holding-company structure, our property company structure planning guide walks through that choice.

Step 3: Register your property company with Companies House

To form the company you file an application (the online equivalent of the paper form IN01) with Companies House, either directly through their online service or through an agent such as your accountant.

What you need to register a property company

• Company name ending in Limited or Ltd.
• Registered office address (public record) and a registered email address.
• Directors' details: full names, dates of birth, nationalities, occupations and service addresses.
• People with significant control (PSCs) and initial shareholders.
• Statement of capital: the number, class and value of shares being issued.
• Articles of association (the standard model articles are usually fine) and the relevant SIC codes.

Identity verification is now mandatory

Under the Economic Crime and Corporate Transparency Act 2023, every director and PSC must verify their identity with Companies House. Identity verification is mandatory for new appointments, and existing directors must verify within the transition window, typically by their next confirmation statement. You verify once, either directly or through an authorised agent, and that verification then carries across every company you are involved with. If you plan to run several SPVs, you do not re-verify for each one.

The Companies House registration fee

The statutory incorporation fee charged by Companies House is:

Route	Statutory fee	Typical processing time
Online (recommended)	GBP 100	Usually within 24 hours
By post (paper IN01)	GBP 124	8 to 10 working days

This is the government filing fee for forming the company itself, payable to Companies House, and it rose from the old lower fee in 2024, so older guides quoting GBP 12 are out of date. Whatever else you choose to spend depends entirely on your own circumstances, which is why this guide does not quote service costs.

Step 4: Open a business bank account

Once Companies House approves the application you receive your certificate of incorporation. You can then open a dedicated company bank account. Banks typically ask for:

• the certificate of incorporation;
• the company's articles of association;
• proof of the registered office address;
• directors' identification documents;
• details of expected turnover and transaction volumes.

Open the account before any rent or property money flows, and never run property income through a personal account. Mixing company and personal money is one of the most common and most damaging mistakes new property-company owners make, and it undermines the limited-liability protection you incorporated for.

Step 5: Activate Corporation Tax (CT41G is no longer used)

This is the step where most older guides are wrong. You do not file form CT41G any more. When you incorporate at Companies House, HMRC sets up your Corporation Tax record automatically and issues a Corporation Tax reference. From there you:

• add Corporation Tax to your business tax account online (you often get the option to set this up at the same time as the Companies House registration); and
• tell HMRC the company is active within three months of starting to trade or receive income, which for a property company means within three months of the first rent or property activity.

From then on, your Corporation Tax return is due 12 months after the end of your accounting period, and any Corporation Tax due is payable 9 months and one day after the period end. Note the gap: the payment deadline falls before the filing deadline, so plan cash flow accordingly.

Step 6: VAT, PAYE and employer obligations

Most residential rental income is exempt from VAT, so a new property company usually does not register for VAT at the outset. You only need to consider VAT registration if:

• you opt to tax commercial property;
• you provide standard-rated services (such as serviced accommodation extras) above the threshold; or
• you develop property for sale.

The VAT registration threshold is GBP 90,000 of taxable turnover. Separately, if you or other directors are paid a salary, the company must register as an employer for PAYE and operate payroll, including auto-enrolment pension duties where they apply. Whether a salary is worthwhile alongside dividends is an extraction decision covered in our salary versus dividends guide.

Step 7: Set up bookkeeping and a compliance calendar

A company faces stricter record-keeping than an individual landlord, and the filing deadlines are unforgiving. Put a system in place from day one:

• Bookkeeping: cloud software such as Xero or QuickBooks, tracking all income, expenses, assets and liabilities, with company transactions kept entirely separate from personal ones.
• Annual accounts: filed with Companies House within 9 months of the year end.
• Confirmation statement: filed annually to confirm the company's details, now including a lawful-purposes statement.
• Corporation Tax return: filed within 12 months of the accounting period end, with tax paid 9 months and one day after.

What about properties you already own personally?

Forming a new company to buy future properties is one decision. Moving properties you already own personally into a company is an entirely different and much more costly one, because it is treated as a sale at market value from you to the company. That can trigger two charges:

Charge on transfer	What applies
Capital Gains Tax	18 percent or 24 percent on the gain on each residential property, with the annual exempt amount of GBP 3,000 available against gains
Stamp Duty Land Tax	The company pays SDLT on the market value, including the 5 percent additional-dwellings surcharge on the whole price (the surcharge rose from 3 percent to 5 percent for transactions on or after 31 October 2024)

In some cases incorporation relief under section 162 TCGA 1992 can defer the CGT, where you transfer a genuine property business as a going concern wholly or partly in exchange for shares. There are real conditions and a claim is required. This is a specialist decision in its own right, so we do not re-run the section 162 tests or the phased-versus-single-day mechanics here. If you already own a portfolio personally, read our dedicated guide to incorporating a property portfolio and take advice before transferring anything. For many landlords the practical answer is to keep existing properties personally owned and buy new ones through the company.

Higher-value properties: the ATED point most new owners miss

If your company holds a single UK residential dwelling worth more than GBP 500,000, it falls within the Annual Tax on Enveloped Dwellings (ATED). Ordinary buy-to-let companies usually qualify for relief because they let to unconnected tenants, but the relief is not automatic. You must still file an ATED return by 30 April each year to claim it. Miss the filing and you face penalties even though no tax was due. If any one property is worth over GBP 500,000, add the 30 April ATED return to your compliance calendar now.

Does Making Tax Digital apply to a property company?

No. Limited companies are outside Making Tax Digital for Income Tax entirely; they file Corporation Tax returns. Making Tax Digital for Income Tax applies to your personal property and self-employment income, and it is now being phased in from 6 April 2026 for qualifying income over GBP 50,000, from 6 April 2027 over GBP 30,000, and from 6 April 2028 over GBP 20,000. So if you keep some properties personally and hold others through the company, the personal ones may be in MTD while the company is not. Our Making Tax Digital for property income guide covers the personal side.

Common mistakes when setting up a property company

• Incorporating before modelling the numbers. A company is not automatically better. Model your specific position, including how you intend to take income, first.
• Using the wrong SIC codes or a trading-company structure. This can block buy-to-let lending. Set up a clean SPV with property SIC codes.
• Ignoring the associated-companies rule. Multiple SPVs split the small-profits band, pushing more profit into the 26.5 percent marginal zone.
• Forgetting to tell HMRC the company is active within three months of receiving rent.
• Mixing personal and company money. Keep them completely separate from the first transaction.
• Overlooking the ATED return on a property worth more than GBP 500,000, even when relief applies.

Getting your property company set up correctly

To summarise the route from decision to a working company:

1. Model whether a company suits your situation, and how you will take income.
2. Choose a unique name and the right property SIC codes.
3. Decide your share structure, including any alphabet shares, before you file.
4. Register online with Companies House (the statutory fee is GBP 100 online or GBP 124 by post), with every director and PSC verifying their identity.
5. Open a dedicated business bank account.
6. Activate Corporation Tax via your business tax account and tell HMRC the company is active within three months of starting to receive rent.
7. Put bookkeeping and a compliance calendar in place.

Incorporating adds genuine tax flexibility for the right landlord, but it also adds compliance, cost and complexity, and getting the structure, SIC codes and share classes right at formation is far easier than fixing them later. If you are weighing it up, our guides to what a property accountant does and how to choose a property accountant are a good next step, and the enquiry form on this page will connect you with a specialist who can review your plan before you file.