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.

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.