Transferring a buy-to-let into a limited company is not a change of name on the deed. It is a sale of the property from you to a separate legal person, your company, and the tax system treats it exactly like any other sale. That single fact drives everything else: two taxes can bite at once, and the headline benefit (full mortgage interest relief inside a company) only pays off once you have absorbed the upfront cost of getting the property in.
This guide explains how to transfer property into a limited company in the UK: the stamp duty the company pays, the capital gains tax you pay, when incorporation relief can defer the gain, and the steps from valuation to completion. The aim is to let you work out whether the move makes sense before you spend anything on it.
Free Incorporation and company structures tool
See the real cost and saving of incorporating
Our interactive tool is built for a larger screen. Tell us your numbers and a specialist will send your figure and the next sensible step, with no obligation.
Why landlords look at incorporation in the first place
The pressure point is Section 24. Since the restriction came fully into force, individual landlords can no longer deduct mortgage interest as an expense. Instead they get a basic-rate tax reducer worth 20% of the finance cost. For a higher-rate landlord that leaves a wedge: the rent is taxed at 40% or 45% but the interest only relieves at 20%. On a heavily mortgaged portfolio that can turn a real-world profit into a tax loss.
A company is outside Section 24. It deducts mortgage interest in full against rental profit before paying corporation tax. For a leveraged higher-rate landlord intending to hold and reinvest, that difference compounds year after year, which is why incorporation moved from a niche idea to a mainstream question.
The catch is that you cannot get a portfolio into a company for free. The rest of this guide is about the price of entry and the reliefs that can reduce it.
The two taxes that bite on transfer
Whichever method you use, two charges sit at the centre of the decision. Getting these right is the whole game.
| Tax | Who pays it | What it is charged on | Can it be relieved? |
|---|---|---|---|
| Stamp duty (SDLT in England and NI, LBTT in Scotland, LTT in Wales) | The company (the buyer) | Market value of the property, plus the additional-dwelling surcharge | Only via narrow partnership relief or the six-dwellings rule. Incorporation relief does NOT touch it. |
| Capital gains tax | You (the seller) | Growth in value since you bought, at 18% or 24% | Deferred by incorporation relief (s.162) where you transfer a genuine whole business for shares |
Stamp duty: the company always pays on market value
Because you and your company are connected persons, the stamp duty is charged on the open market value of the property, not on whatever figure appears on the transfer, and not reduced to nil just because no cash changes hands. The company is acquiring a dwelling while it already counts as a property owner, so the additional-dwelling surcharge applies.
In England and Northern Ireland the surcharge is an extra 5% on every band, in force for transactions on or after 31 October 2024. The combined rates the company faces on a residential transfer are set out below.
| Property value band | Standard SDLT | Company rate (with 5% surcharge) |
|---|---|---|
| Up to £125,000 | 0% | 5% |
| £125,001 to £250,000 | 2% | 7% |
| £250,001 to £925,000 | 5% | 10% |
| £925,001 to £1,500,000 | 10% | 15% |
| Above £1,500,000 | 12% | 17% |
The devolved positions differ and must be used in the right jurisdiction. In Scotland, Land and Buildings Transaction Tax applies through Revenue Scotland, and the Additional Dwelling Supplement is 8% (raised from 6% on 5 December 2024). In Wales, Land Transaction Tax applies through the Welsh Revenue Authority with its own bands and higher rates for additional properties. Multiple Dwellings Relief, which used to soften portfolio purchases, was abolished for transactions on or after 1 June 2024 and cannot be used to cut the bill on incorporation.
Capital gains tax: a disposal at market value
On the same connected-party logic, you are treated as disposing of each property at its market value for capital gains tax. The gain is that value less what you paid, less buying and selling costs and any capital improvements. Residential property gains are taxed at 18% to the extent they sit within your unused basic-rate band and 24% above it (the rates in force from 30 October 2024 under TCGA 1992 s.1H), after deducting the annual exempt amount of £3,000 for 2026/27. There is more detail in our guide to current CGT rates on property.
A worked example: the cost of entry
Take Priya, a higher-rate landlord who bought a buy-to-let for £200,000 and is transferring it to her company when it is worth £320,000.
- Stamp duty (company, England): on £320,000 with the 5% surcharge, the company pays 5% on the first £125,000, 7% on the slice to £250,000, and 10% on the slice to £320,000. That is £6,250 + £8,750 + £7,000, a total of £22,000 in SDLT.
- Capital gains tax (Priya): the gain is £320,000 less £200,000, so £120,000, less the £3,000 annual exempt amount, giving £117,000. As a higher-rate taxpayer she pays 24%, which is £28,080. If incorporation relief applies, this is deferred into the base cost of her shares instead of being paid now.
That is roughly £50,000 of upfront cost before relief, against an annual Section 24 saving that might be a few thousand pounds a year. The arithmetic is why incorporation is rarely worthwhile for a single low-geared property and can be compelling for a larger leveraged portfolio held for the long term. The point of modelling is to find where your own numbers fall.
The three ways to move a property into a company
There are three routes. They are taxed very differently, and choosing the wrong one is the most expensive mistake in this area.
| Route | How it works | CGT on transfer | Stamp duty | Best for |
|---|---|---|---|---|
| Sale at market value | You sell the property to the company at full value | Charged in full now (unless covered by PRR) | Full, with surcharge | A single property, or where CGT is small or sheltered |
| Business incorporation with s.162 relief | You transfer the whole letting business for shares | Deferred into the base cost of the shares | Full, with surcharge (relief does not help here) | A genuine portfolio business moving as a going concern |
| Partnership incorporation | A pre-existing letting partnership transfers into a company | Deferred via s.162 | Can be reduced, in some cases to nil, under partnership relief | Established partnerships with real substance and history |
1. Sale at market value
The simplest route. The company buys the property for its market value, you bank a CGT disposal, and the company pays full SDLT. It gives a clean break and a clear paper trail, and it is often the only realistic route for a single property because the relief routes need a whole business. Where the property has been your own home throughout, private residence relief may remove the CGT entirely, which makes selling a former home into a company more attractive than it first looks.
2. Incorporation relief under TCGA 1992 s.162
Incorporation relief defers the capital gains tax where an individual transfers a business as a going concern, with the whole of its assets other than cash, to a company wholly or partly in exchange for shares. The gain is not charged on transfer; it is rolled into the base cost of the shares and surfaces only when you sell them. The conditions matter:
- You must transfer the whole business, not a cherry-picked property.
- You must take shares, not cash, for at least part of the consideration (the relief is proportionate to the share element).
- The activity must amount to a business. Following Ramsay v HMRC [2013], a property letting operation can qualify where there is genuine, active management (typically a portfolio rather than one passive let).
One change catches people out. From 18 March 2026, Finance Act 2026 made s.162 relief a claim rather than an automatic relief. You must claim it, with the information HMRC requires, by the first anniversary of the 31 January following the tax year in which the business was transferred. Miss the deadline and the deferral is lost even though the transfer qualified. Our deeper guide on how to incorporate without triggering CGT walks through the claim and the going-concern evidence in full.
3. Transfer at undervalue
Transferring the property to the company for less than it is worth, or for nothing, does not reduce the tax. Connected-party rules deem the disposal and the SDLT charge to happen at market value anyway, so you get the full tax exposure with none of the cash, and the undervalue can create a separate benefit charge. It is almost never the right answer and is included here only because it is a frequent misunderstanding.
What about the stamp duty: is there any way to reduce it?
This is where the most expensive myth lives. Incorporation relief is a capital gains tax relief. It does nothing for stamp duty. The company pays SDLT, LBTT or LTT on market value with the surcharge whether or not the CGT is deferred.
The only genuine route to reduce the stamp duty is partnership relief (FA 2003 Sch 15 in England and Northern Ireland, with separate frameworks under LTTA 2017 in Wales and LBTT(S)A 2013 in Scotland). Where a real, pre-existing letting partnership transfers its property business into a connected company, a connected-party formula can reduce the chargeable consideration, in some cases to nil. The bar is high. HMRC expects a partnership that has genuinely operated, with its own partnership tax returns, partnership accounts and joint borrowing, usually for a couple of years before transfer. A partnership stitched together shortly before incorporation to access the relief is exactly what the general anti-avoidance rule is designed to ignore. Treat any scheme that promises stamp-duty-free incorporation for an ordinary husband-and-wife portfolio with deep suspicion.
See the real cost and saving of incorporating
Skip the spreadsheet. Tell us about your situation and a specialist will review your position and the next sensible step, with no obligation.
Step-by-step: how the transfer actually happens
Assuming you have decided incorporation is right, here is the order of work.
Step 1: model the lifetime position first
Run the numbers before you set anything up. Compare the upfront SDLT and CGT against the annual Section 24 saving and the ongoing cost of running a company, over the period you actually intend to hold. The incorporation cost framework shows what to feed into that calculation.
Step 2: set up the company
Register the company at Companies House and fix the share structure now, not later. A sole shareholder is simplest; alphabet shares let you split dividends with a spouse or adult children, subject to the settlements rules. Identity verification at Companies House is now part of the process, so allow time for it.
Step 3: get RICS valuations
Because the transfer is connected-party at market value, the valuations carry both the SDLT and the CGT. Use qualified surveyors familiar with the local market. Unrealistic valuations are the single most common trigger for an HMRC challenge on incorporation.
Step 4: calculate the taxes
Work out the company's SDLT, LBTT or LTT including the surcharge, and your CGT on each property, then confirm whether incorporation relief or partnership relief is in point. This is the figure that decides whether the move proceeds.
Step 5: sort the finance
Personal buy-to-let mortgages do not follow the property into a company. The company refinances onto a limited-company buy-to-let mortgage, typically with personal guarantees from the directors, and you should hold an agreement in principle before committing. Many personal residential mortgages prohibit transfer to a company outright, which can force early repayment.
Step 6: complete the legal transfer
A conveyancing solicitor transfers title at the Land Registry, files the stamp duty return and pays the duty within the deadline (14 days for SDLT). Where a relief applies, the s.162 claim and the partnership-relief evidence are prepared at this point.
Step 7: tidy up the ongoing obligations
Switch buildings insurance to commercial landlord cover in the company name, notify tenants of the change of landlord, register the company for corporation tax, and set up bookkeeping for company accounts and corporation tax returns.
Living inside a company afterwards
The day the property is in, a new set of running considerations starts. The company pays corporation tax on its rental profit, and getting money back out to you is a second taxable event: usually a tax-free repayment of any director's loan created on incorporation first, then dividends, then salary or pension. A pure property-investment company that holds only let property is generally not caught as a close investment-holding company, so it keeps access to the lower small-profits corporation tax rate, but the position should be checked per company.
You also inherit company filing: annual accounts, a corporation tax return, and confirmation statements. And the regime is moving. Making Tax Digital for Income Tax is now live for individual landlords, with the threshold stepping down from £50,000 of qualifying income from 6 April 2026, to £30,000 from 6 April 2027, and to £20,000 from 6 April 2028. A company's rental income is outside MTD for Income Tax, but if you keep properties in your own name alongside the company, those personal lettings can still be in scope.
A note on the 2027 rate change
Landlords weighing incorporation often ask whether the announced 2027 changes alter the calculation. From 6 April 2027, property income for individuals will be taxed at separate rates of 22% basic, 42% higher and 47% additional. These rates were enacted by Finance Act 2026 and apply in England, Wales and Northern Ireland; only Scotland is carved out for 2027/28. Importantly, the Section 24 finance-cost reducer rises in step to 22%, so no new wedge opens for a basic-rate landlord, and the existing gap for higher and additional-rate landlords does not widen. The change nudges the personal-versus-company comparison rather than transforming it; our guide to the 2027 property income tax rates covers it in detail.
When incorporation is not the answer
Moving an existing property in often does not pay. Think hard before proceeding if:
- You are a basic-rate taxpayer whose interest already relieves at your marginal rate.
- The upfront SDLT and CGT exceed the tax you would save over your realistic holding period.
- You expect to sell within a few years, so there is little time to recover the entry cost.
- Your mortgage terms prohibit company ownership or the refinancing rates wipe out the benefit.
In those cases the better moves are usually to buy future properties through a company from the outset, to consider a spouse transfer to use both basic-rate bands first, or simply to keep the property personally. Our complete guide to buy-to-let limited companies compares holding personally against incorporating across the lifecycle.
Getting it modelled before you commit
Incorporation is one of the few property tax decisions where the upfront cost is large, the benefit is gradual, and the reliefs are easy to get wrong. The difference between a sale at market value, a s.162 business incorporation and a partnership incorporation can be tens of thousands of pounds on the same portfolio, and the new claim deadline means even a qualifying transfer can lose its relief through a missed filing.
If you are weighing the move, the most useful first step is to model your specific portfolio: the stamp duty the company would pay, the CGT exposure and whether it can be deferred, and the lifetime saving against the running cost. Talk to a property tax specialist before you set up the company, not after the property has already moved.