Incorporation Cost Calculator

Moving a personally-held rental into a limited company is a sale to the company at market value. That triggers two upfront taxes: Capital Gains Tax on the gain (18% within the basic-rate band and 24% above, for residential property) and Stamp Duty Land Tax, because the company is acquiring an additional dwelling, so the 5% surcharge applies on top of the standard SDLT bands.

Against those costs, a company deducts mortgage interest in full (Section 24 does not apply to companies) and pays Corporation Tax (19% on profits up to £50,000, rising toward 25%) rather than income tax. The annual tax saving versus personal ownership is what eventually repays the upfront cost. This calculator estimates that break-even point.

Two reliefs can reduce the upfront cost for the right landlords: incorporation relief (TCGA 1992 s.162) can defer the CGT where a genuine property business is transferred as a going concern, and partnership SDLT relief (FA 2003 Sch 15) can reduce the SDLT where a genuine, pre-existing letting partnership incorporates. Both are tightly conditioned and HMRC scrutinises them closely.

Tax is not the whole bill. A real transfer also carries professional fees (conveyancing solicitor, valuation, and lender or broker fees if you refinance into the company), and the company itself costs money to run each year. The optional fee fields in the calculator add those to the upfront total, and the annual running cost is shown as its own line, kept deliberately separate from the tax-saving comparison. For the full year-by-year budget of running a property company, see our guide to property company running costs.

This is a directional estimate. The SDLT figure here uses the headline surcharge; your actual SDLT depends on the full banded rates, and reliefs such as s.162 and Sch 15 can change the picture entirely. We model your exact position before you commit.