If you own the rental property personally and want to maximise profits while minimising taxes, transferring your property income to a Limited Company could be game-changing.
Many UK landlords now operate through Limited Companies, attracted by tax savings, asset protection, and streamlined financial management. In this guide, we’ll walk you through the whole process—the benefits, the potential costs, and how to do it smartly.
Why Move Property Income to a Limited Company?
There are several strong reasons landlords and property investors consider moving their properties into a Limited Company:
- Tax Efficiency: Corporation Tax rates (historically 19%, now rising to 25%) are still lower than personal income tax rates for high earners.
- Mortgage Interest Relief: Since April 2021, individual landlords can no longer deduct full mortgage interest from rental income. Companies, however, still can.
- Limited Liability Protection: When operating through a company, your assets are shielded from business risks.
- Professional Image: A Limited Company structure can improve credibility with lenders, partners, and clients.
- Succession Planning: Passing on company shares to family members can be simpler than transferring physical property.
However, while the benefits are significant, there are important costs and implications.
The Key Costs You Must Know
1. Stamp Duty Land Tax (SDLT)
When you transfer property to a Limited Company, the company must pay Stamp Duty Land Tax. The company’s purchase is treated as a new transaction even if you own the property personally. An extra 3% SDLT surcharge applies if it’s a second property.
2. Capital Gains Tax (CGT)
You are effectively “selling” the property to your company at market value, even if no money changes hands. If the property has increased in value since you bought it, you may face a Capital Gains Tax bill.
3. Mortgage Arrangements
You cannot simply transfer your mortgage to the company. Instead, the company must apply for a new commercial or Buy-to-Let mortgage, often at higher interest rates.
4. Running Costs
Operating a Limited Company brings extra responsibilities: accounting fees, company admin, filing annual accounts, Corporation Tax returns, and more. While these costs are manageable, they are ongoing.
At LDN Financial Limited, we help property owners understand these costs clearly and build tax-efficient strategies around them. Our expert advisors can help you decide whether incorporation is proper for you.
Step-by-Step: How to Transfer Your Property to a Limited Company
1. Set Up Your Limited Company
If you don’t have one yet, your first step is to register a Limited Company with Companies House. Choose a company name and registered address, appoint directors, and issue shares to the owners.
You’ll also need a dedicated business bank account to separate your company finances from your personal ones.
2. Get a Professional Property Valuation
A qualified surveyor (preferably RICS-accredited) should provide a current market valuation of your property. This valuation will be crucial for SDLT and CGT calculations.
3. Review Mortgage Options
If you have an existing mortgage, speak to your lender. Some lenders may allow you to “port” the loan, but a brand-new company mortgage will often be required. Expect stricter criteria and slightly higher rates.
4. Complete the Sale
Legally, you are selling the property to your company. A conveyancing solicitor will handle the transaction paperwork, transfer ownership at the Land Registry, and ensure SDLT is filed and paid.
5. Set Up Proper Accounting
Your company must keep meticulous records of all income, expenses, and profits. Annual filing to HMRC and Companies House is mandatory.
Not sure where to start? LDN Financial Limited offers landlords complete company formation, accounting, and tax planning services. We’ll handle everything for you — making the transition smooth, compliant, and tax-efficient.
Should You Move Your Property to a Limited Company?
Moving your property income to a Limited Company isn’t for everyone. Here’s when it could make the most sense:
- You are a higher-rate taxpayer (paying 40%+ income tax)
- Do you own multiple rental properties, or are you building a portfolio
- You are planning long-term investments rather than short-term selling
- You want to pass properties to families in a structured way
However, if you own only one or two properties and are a basic-rate taxpayer, the costs of transferring might outweigh the benefits.
That’s why personalised advice is crucial. At LDN Financial Limited, we offer bespoke consultations tailored to your situation. Our team will analyse your portfolio, tax position, and plans to give you a clear, strategic recommendation — not just generic advice.
Final Thoughts
Transferring your property income to a Limited Company can unlock powerful tax benefits and asset protection, but it comes with upfront costs and ongoing responsibilities.
The decision must be based on your long-term property strategy, tax bracket, and financial goals.
Expert support can make all the difference if you’re considering taking the leap.
Contact LDN Financial Limited today for a free initial consultation. Now proudly partnering with Twelve Wealth Management for even stronger financial support, LDN Financial offers over 30 expert services and has successfully served 2,000+ clients across the UK. Let’s work together to ensure your property investments work harder and smarter for you.
