Should you incorporate your buy-to-let portfolio?
Whether you are buying your next property or moving a portfolio you already own, a free consultation models the Capital Gains Tax and Stamp Duty against your own figures, and says so when it is not worth doing.
The question
Nobody incorporates for the paperwork
They do it because Section 24 has made a geared portfolio expensive to hold personally. Whether a company actually fixes that depends on your numbers, and for plenty of landlords the honest answer is no.
If one of these is the sentence going round your head, the modelling is worth doing properly.
Book a consultationThe case for
When incorporation makes sense
You're a higher-rate taxpayer
Section 24 hits hardest at 40% and 45%. If your rental profit (after expenses but before mortgage interest) pushes you into higher-rate territory, incorporation can reduce your effective tax rate significantly.
You have significant mortgage interest
The more mortgage interest you pay, the bigger the Section 24 impact. If mortgage interest represents 40%+ of your rental income, incorporation may be worth the upfront cost.
You're holding long-term
Incorporation has high upfront costs (CGT + SDLT). If you plan to hold the properties for 10+ years, you have time to recover those costs through annual tax savings. Short-term holds rarely justify incorporation.
You're building a portfolio
If you're acquiring new properties, buying them in a limited company from the start avoids the CGT/SDLT hit on transfer. Existing properties can stay personal, new ones go into the company.
The case against
When it doesn't make sense
Low mortgage levels
If you own properties outright or have small mortgages, Section 24 doesn't hurt much. The upfront cost of incorporation (CGT + SDLT) may never be recovered.
Planning to sell soon
If you're selling within 5 years, the upfront incorporation costs likely exceed any tax savings. Better to stay personal and pay the Section 24 tax.
You're a basic-rate taxpayer
Section 24 has minimal impact at 20%. Corporation tax (19%) + dividend tax may not save you much, and the upfront costs are the same regardless of tax bracket.
You need to extract all profit
If you rely on rental income to live, extracting profit as dividends triggers personal tax. The company structure only saves tax if you can leave profit in the company.
Recognise yourself on either list? The answer is in the numbers, not the list.
Book a consultationTestimonials
What landlords say
Anonymised feedback from landlords and investors we have worked with, including on this decision.
“They modelled our Section 24 position properly for the first time and showed us exactly where incorporation did and did not make sense. No hard sell, just the numbers.”
“We were weeks from missing the 60-day capital gains deadline on a sale. They turned the computation around and filed on time. Worth the fee on that alone.”
“Getting ready for Making Tax Digital felt overwhelming. They set up the software, mapped every property, and now the quarterly filing just happens.”
Free calculator
Calculate your incorporation costs
Get a quick estimate of upfront costs (CGT + SDLT) and break-even timeline.
Calculator
Incorporation Cost Calculator
Calculate the upfront cost (CGT + SDLT) and break-even timeline for incorporating your rental property.
Your result
Your figure is ready. Confirm it with a specialist, or skip straight to the numbers.
Deliverables
What you get
- Full CGT and SDLT cost calculation based on your actual property values and purchase prices
- Annual tax saving comparison: personal vs. company structure
- Break-even timeline showing when you recover the upfront costs
- Clear recommendation: incorporate now, wait, or don't incorporate at all
- Written report you can share with your solicitor or mortgage broker
No charge for the initial conversation, and no obligation.
The upfront cost
Stamp duty when you incorporate
Stamp duty is the cost landlords underestimate most, because no money has to change hands for it to be due.
The surcharge rose from 3% to 5% on 31 October 2024, and the residential nil-rate band returned to £125,000 on 1 April 2025, so a mid-sized portfolio transfer costs a good deal more than most landlords remember. Run the stamp duty calculator property by property, then set the total against the annual saving in the incorporation cost calculator.
SDLT is charged on market value, not on what you paid
You and your company are connected persons, so the transfer is treated as taking place at market value whatever the paperwork says the consideration was.
- What you paid for it
- £180,000
- What it is worth now, and what SDLT is charged on
- £310,000
A company gets no first-property exemption, so the surcharge applies to its first purchase as much as its tenth.
Note: Example figures displayed
Multiple Dwellings Relief and the six-dwellings rule
Multiple Dwellings Relief was abolished for transactions completing on or after 1 June 2024, so there is nothing left to plan around there. What survives is the six-dwellings rule: acquire six or more separate dwellings in one transaction, or in linked transactions, and the purchase can be treated as non-residential for SDLT, which brings in the non-residential rates and removes the surcharge. Useful for moving a large portfolio in one go, irrelevant for two or three.
Partnership relief under Schedule 15 FA 2003
Partnership relief under Schedule 15 FA 2003 can cut the SDLT charge to nil where a genuine partnership incorporates. It needs the old partners and the new shareholders to be the same people in the same proportions, and a real partnership behind it: a partnership agreement, a partnership tax return, joint working and shared control, not a property held in joint names. HMRC looks closely at partnerships formed shortly before an incorporation, and anti-avoidance rules can claw the relief back if shares are shuffled afterwards.
Scotland (LBTT) and Wales (LTT)
Scotland charges LBTT plus the 8% Additional Dwelling Supplement, levied on the entire purchase price rather than a slice, which makes a Scottish portfolio the most expensive version of this exercise. Wales charges Land Transaction Tax, with additional properties on a separate higher-rates table running from 5% up to 17% rather than main rates plus a surcharge. The connected-party market-value rule applies across all three.
The relief
Connected-party and clearance points
The Capital Gains Tax side turns on Section 162 TCGA 1992, incorporation relief. For transfers on or after 6 April 2026 it is no longer automatic. Finance Act 2026 made it a relief you have to claim, by the first anniversary of the 31 January following the tax year of the transfer, and there is no longer an election to disapply it. Miss the claim and the relief is simply not given, however comfortably you met the conditions.
Three conditions, and all three have to hold
Fail any one of them and Section 162 gives you nothing: the gain is simply taxed on transfer.
A business transferred as a going concern
This is where most landlord claims fail
Holding property and collecting rent is an investment activity, not a business, unless the scale of what you do takes it further. Advisers work from Ramsay v HMRC, where roughly 20 hours a week of hands-on management across a property of 10 flats was accepted as a business: repairs organised personally, tenant management, viewings, maintenance and accounts. A portfolio run entirely through a letting agent, on a few hours a month of oversight, generally does not qualify however large it is. The evidence has to exist before the transfer, not be reconstructed afterwards.
All of the assets of that business, other than cash
The whole business has to move, not a selected part of it. Cash is the one asset you are allowed to keep back.
Wholly or partly in exchange for shares
Only the share element qualifies for relief, so taking a director loan account out of the transfer reduces the relief proportionately.
All three hold: the gain is deferred, not forgiven
The gain on the properties is not taxed on transfer. It is rolled into the base cost of the shares you receive, so the tax is deferred until you dispose of those shares.
Running alongside all threeconnected-party rules
Because you control the company, market value is substituted for whatever price you set, for CGT as well as SDLT, so undervaluing the transfer buys nothing except a valuation argument later. Get a defensible valuation at the point of transfer and keep it. The same connection is why the mortgage matters: lenders normally require the personal borrowing to be redeemed and replaced with company buy-to-let lending, with its own arrangement fees and early repayment charges.
There is no statutory clearance for Section 162. A non-statutory clearance does not bind HMRC the way a statutory one would, and they will often decline to say whether an activity amounts to a business. The practical answer is a documented analysis of your own facts, prepared before you transfer anything. Where the CGT and SDLT at stake run to five or six figures, that is worth paying for: our property tax advice work covers this ground, and our property accountant service picks up the company filings afterwards. Still weighing whether the structure is right at all? Start with the landlord tax position in your own name.
How it works
Our incorporation process
- 01
Initial feasibility call
We discuss your portfolio, income, tax position, and plans. This is a short conversation to understand whether incorporation is even worth modelling.
- 02
Full financial modelling
We calculate upfront costs (CGT + SDLT), annual tax savings, break-even timeline, and cash flow impact. You get a written report with clear recommendations.
- 03
Decision and implementation
If you decide to proceed, we coordinate with your solicitor, set up the company, handle the property transfer, and ensure all filings are correct. If you decide not to proceed, that's fine, and you have the analysis for future reference.
Free consultation
Get your incorporation feasibility analysis
Tell us what you hold and where you are heading. We will model the numbers and give you a clear recommendation, including when that recommendation is to leave things alone.
- The full cost, modelledCGT and SDLT on your actual values, not a rule of thumb
- Fixed fees, quoted upfrontYou approve the fee before any work starts
- 24-hour responseUsually the same working day
No obligation and no hard sell. If incorporation is not worth it for you, we will say so.
Book your free consultation
FAQs